January is here and with it comes the making and breaking of new year's resolutions, new starts, clean slates and ... changes to provincial and federal legislation.
Although I've written about changes to OHIP and the new Ontario drug coverage plan that provides free access to 4,400 prescription drugs for those 24 and under, I thought it might be an important time for a refresher. Related to this provincial change is the development of OHIP+, a mobile-friendly tool to help you find out what is covered at no cost for children and youth aged 24 and under.
This is such an exciting change and the first of its kind in Canada. Free for those with a Ontario health care or health card number are: diabetes test strips, oral contraceptives, medications to treat some childhood cancers, asthma inhalers, drugs to treat depression, anxiety, epilepsy, ADHD, antibiotics, EpiPens, and other conditions.
Ontario Drug Benefit (ODB) Eligibility requirements
If you are looking to provide an update or a reminder to employees or for your own purposes, remember that to be ODB eligible, you need:
- to be a child or youth, age 24 or younger,
- age 65 or older;
- living in a long-term care home or a home for special care;
- receiving professional home and community care services;
- enrolled in the Trillium Drug Program, Ontario Works or Ontario Disability Support Program. More info about eligible can be found here.
Have your Ontario health card or health card number handy.
More great news -- enrolment is automatic with no co-payment or annual deductible and eligible prescriptions will be filled at no charge at any Ontario pharmacy. Just be sure to show an Ontario health card or health card number.
Changes to parental and maternity leave in Canada.
Back in April 2017, I wrote about the pending changes to the parental and maternity leave in Canada. At that time, nothing had been cast in stone. With the updated rules recently communicated, parents have more choices. They can opt for either 12 months or 18 months of combined maternity and parental leave. This legislative change was effective Dec. 3, 2017 and applies to any expectant Canadian parent outside of Quebec -- which has its own parental and maternity benefits.
December 3 is a key date.
If you started receiving parental or maternity benefits before December 3, the government doesn't offer you the option to switch to the 18-month system. This means that you can't choose to claim extend parental benefits if your child was born or placed with you for the purpose of adoption before December 3, 2017.
The 18-month system has locked in job security for workers in federally regulated workplaces such as transport companies, public service, telecoms and banks. The Canada Labour Code has been updated for this change in legislation already.
Those in provincially regulated jobs (the majority of working Canadians) can choose the 18-month system as of December 3, but may not have the same peace of mind for job security as their federal counterparts quite yet as changes to individual labour codes related to job protection have yet to be amended.
Standard versus Extended Parental benefits - what is the difference?
Standard parental benefits can be paid for a maximum of 35 weeks and must be claimed within a 52 week or 12 month period after the week the child was born or placed for the purpose of adoption. The weekly benefit rate is 55% of the claimant's average weekly insurable earnings up to a maximum amount. The two parents can share 35 weeks of standard benefits.
Extended parental benefits can be paid for a maximum of 61 weeks and must be claimed within a 78-week period or 18 months after the week the child was born or placed for the purpose of adoption. The benefit rate is 33% of the claimant's average weekly insurable earnings up to a maximum amount. The two parents can share 61 weeks of extended parental benefits.
Other legislative updates
For some employers, January may be a busier time as changes to existing policies and collective agreements are updated and/or communicated.
Canada Pension Plan Contribution Rates, Maximums and Exemptions. Each year, the government communicates the information specific to payroll deductions, employer and employee contribution rates.
Specific to the Canada Pension Plan (CPP), the 2018 yearly maximum pensionable earnings is $55,900 and the employee and employer contribution rate is 4.95%
Information related to registered plans such as money purchase, defined benefit, RRSPs, deferred profit sharing plans, and tax-free savings accounts limits as well as the year's maximum pensionable earnings (YMPE) is available here.
Employment Insurance (EI) premium rates and maximums -- Federal EI premium rates and maximums for 2018 are: $51,700 is the maximum annual insurable earnings for 2018. The maximum annual employee premium is $858.22 and the maximum annual employer premium is $1,201.51 with a rate of 1.66%
Especially at this time of year, employers are faced with knowing about legislative changes affecting their workplace and sometimes keeping track of all the changes may seem like a bit of a moving target. A knowledgeable third party perspective can foster the confidence that you've applied changes correctly to your specific work arrangements.
We invite you to contact us.
With over 3 decades of industry experience, we have the skills, experience and resources to help you implement policy and plan changes to meet legislative requirements as well as your program needs. As always, we're here to help so that you can focus on what you do best.
There was a time not that long ago when parental leave in Canada was no more than 6 months in duration. Fast-forward from 2003 to March 2017 and we are looking at changes that allow parents to choose to receive employment insurance parental benefits over an extended period of up to 18 months.
Options for parents.
The good news for parents -- they have choices. With the proposed changes in the 2017 Federal budget, parents can elect to take no more than a period of 12 months in order to receive parental benefits at the existing rate of 55 per cent of average weekly earnings or extend the parental leave to 18 months at a rate of 33 per cent of the weekly average wage.
Longer window to secure childcare arrangements.
This extension of parental leave over a longer period of time was a federal election promise made repeatedly throughout the Liberal campaign. With expecting and new parents struggling to secure suitable childcare arrangements, it is promising position especially for parents finding it challenging to secure suitable childcare arrangements.
Keeping parents in the workforce.
The extension also provides a buffer for the parent who was on leave to return to workplace hopefully with less stress and with a greater sense of ease through the transition from primary caregiver to working parent. In the past, it wasn't uncommon for a parent to decide not to return to the workforce or attempt a return on a part-time basis and the extension will hopefully allow parents to embrace a full-time return to work instead.
What does this change means for employers?
1) To top up or not to top up? For larger employers where parental leave top up provisions were part of the employee benefits package, an important decision is necessary. Employers may decide to either top up in alignment with the new parental leave extension or to take no additional action. In reality, there are a number of combinations of a top up scenario that could implemented.
2) Policy Statement review? If employer top up provisions during the parental leave are going to be changed, wording in HR policies will need to follow suit. In addition, vacation accruals, which generally are allocated annually, will need to be reviewed for the parental leave extension.
3) Productivity and filling parental leave vacancies. There are different ways to consider the parental leave extension.
A) It might be easier to secure a top-talent contract replacement when the extended leave duration affords a longer contract position;
B) The extended leave might help ensure that the employee on leave feels ready mentally and physically to return to work on a full-time basis.
C) On the flip side, an extended absence may make it more challenging to reintegrate a worker after an 18-month leave. The employer may find it more work to keep the absent employee updated on changes in the workplace and to ensure they remain engaged and committed to returning.
D) Should the employee's position not be backfilled during the leave, employees might feel the pressure and strain of the work they might be responsible for covering during their colleague's extended absence. A consistent focus on employee engagement initiatives and keeping a pulse on productivity, goals and outcomes will be more important than ever.
If you're looking to make changes to your benefit program as a result of the Federal Budget announcement regarding the proposed extended parental leave or otherwise, we have the experience to recommend and navigate effective solutions to meet your needs. We invite you to contact us. We're here to help so that you can focus on what you do best.
Employment Insurance Program waiting period reduction: What can a one week change mean to employers?
The Liberal government has taken action to make sweeping changes to our Employment Insurance (EI) Program where the combined total cost is estimated at $1.45 billion for 2017.
While several of the EI program changes have already taken effect, one that is more complex won't kick in until January 1, 2017. The Budget Implementation Act 2016, No. 1, received Royal Assent on June 22, 2016 and reduces the EI disability coverage from two weeks to one week.
What is the EI waiting period?
The EI waiting period is a period of time that must be served before a claimant can begin to receive EI benefits and it has been set at two weeks since 1971.
What is the EI payment period?
The EI payment period is 17 weeks and includes a 2-week waiting period where no benefit is paid. A total of 15 weeks of paid benefits is factored into the 17 weeks.
What changes happen to the EI Program on January 1, 2017?
The January 1, 2017 changes mean that the payment period will include only a 1 week waiting period where no benefit is paid followed by a 15 week period of paid benefits. This change results in only a one week period of no paid benefits.
Of note, the number of weeks of benefit is not changing and there are no plans to change the timeframes that employers need to issue records of employment.
What could a one week difference represent for employers and service providers as well as Canadians in need of this benefit?
According to The Honourable MaryAnn Mihychuk, Minister of Employment, Workforce Development and Labour, reducing the two-week waiting time is "a systemic change. It impacts skills programs. It impacts other associated support. That's very complicated." This complex change is good news for claimants who will be without income for a shorter period of time if they apply for EI, but the change require additional work on behalf of employers and service providers who need to consider the impact to employee communications, handbooks, existing disability plans and collective agreements. It could mean that insurers will ask for an LTD premium adjustment for employers opting to shorten the LTD elimination period from 119 to 112 days . Employers face the question of whether or not they wish to absorb a potential cost increase.
What if you have a registered plan with the EI Premium Reduction Program?
If you have a plan registered with the Employment Insurance Premium Reduction Program you will need to reduce the waiting period for Weekly Indemnity (WI ) and/or Short-Term Disability (STD) benefits from 2 weeks to 1 week in order to ensure the preservation of EI premium reductions. This change may represent a cost increase and will depend on the benefit plan design and use.
What about insured STD or self-insured salary continuance plans?
If you have a plan with a waiting period of 7 or fewer days there is no impact to you and no action that needs to be taken.
If you have a plan with a waiting period of more than 7 days, please contact us to discuss the implications.
What about requirements for Supplementary Unemployment Benefit (SUB) Plans?
SUB plans -- also known as EI top-up plans -- are tied to EI claims linked to layoffs, EI sickness benefits, maternity and parental leave and compassionate care. For existing SUB plans, this change may reduce costs as employees will be able to access EI benefits earlier during their leave period. It depends on the duration of the SUB plan benefit payments and utilization. If you have specific questions about your SUB plan, please contact us.
What does this mean for employer-sponsored Long Term Disability (LTD) Benefits?
Many employers structure their LTD program with benefits beginning only after a claimant uses up EI sickness benefits or after the 17 week elimination period or 119 days. This means that sickness benefits will run out at 16 weeks or 112 days. If you offer LTD benefits that starts after the 17 week of EI, consider if an amendment to the plan is warranted given that employees will have 1 week where no benefit is paid.
As 2016 draws to a close, employers will need to consider if the change impacts their current benefit program. Good news for employees comes from Service Canada who advises that the Canadian Life and Health Insurance Association (CLHIA) will give impacted employers a transition period to make the necessary amendments to their plans AND they will continue to qualify for the EI Premium Reduction Program during the transition period.
We are keeping a close watch for any EI Program updates so we remain well positioned to offer timely support regarding the implications to employer-sponsored salary continuance and disability benefit plans. We want to ensure your program runs smoothly and we invite you to contact us if you have any questions. We're here to help so that you can focus on what you do best.
On May 13, the Minister of Health, the Honourable Rona Ambrose, along with the Minister of State for Social Development, the Honourable Candice Bergen, highlighted the increased support proposed from Canadians taking care of family members facing a significant risk of death.
Effective January 3, 2015, the Government of Canada plans to enhance Compassionate Care benefits as part of Canada's Economic Action Plan 2015. They will pump an additional $37 million annually to extend Employment Insurance (EI) compassionate care benefits from 6 weeks to 6 months.
These benefits are available to eligible individuals who are temporarily away from work to care for a sick family member with a significant risk of death. It is estimated that 6,900 claimants will make use of this benefit per year.
The plan for these enhanced benefits creates an scenario where the claimant may be eligible to collect up to 26 weeks of benefits. In addition, these benefits can be taken within an expanded period of 52 weeks (up from 26 weeks) and can be shared between family members.
There are no changes to the eligibility criteria for pending claimants -- a medical certificate signed by a doctor attesting to the family member's condition is still required.
If registered for access to the EI program, self-employed Canadians can apply for EI special benefits (maternity, parental, sickness, compassionate care and parents of critically ill children benefits).
Did you know?
Caregivers of those who are at risk of death or who are dying go through a difficult time. The demands of the gravely ill may affect the emotional and financial security of caregivers as well. It is during these times that benefits such as compassionate care are so necessary and valued. For many, they don't anticipate they will see themselves in a position of this nature -- whether with a serious health risk or as a caregiver. Our role is to help address uncertainty and manage risk during the financial aspects of the group benefits experience. We also make it our business to stay on top of legislative and regulatory changes so that we are well positioned to support your needs. We're here to help and invite you to contact us so that you can stay focused on what you do best.
News hit the headlines on September 9, 2013 when Minister of Finance, Jim Flaherty, announced that the Canadian Government will freeze Employment Insurance (EI) rates for the next three years. Without the freeze, EI rates would have risen to $1.93 per $100 of earnings in 2014.
The Minister of Finance indicated that unemployment rates have been falling and the EI account is on track.
Employees currently pay $1.88 per $100 of earnings up to a maximum annual EI premium of $891.12, while employers pay $2.63 per $100 to a maximum $1,247.57, based on a maximum annual insurable earnings of $47,400.
For residents of Quebec who are under the Quebec parental insurance plan, this premium reduction will be $0.35 per $100 of insurable earnings in 2014; Quebec residents will pay $1.53 per $100 of insurable earnings next year.
In 2014, maximum insurable earnings will rise to $48,600. This means that higher-income employees will still pay more in premiums, but not as much as they would have if the premium freeze wasn't in place. Employees earning the maximum insurable amount will pay $913.68 in 2014, an increase of $22.56 over 2013, but $24 less than they would have if the planned increase had gone ahead. For employers, the maximum annual premium will rise $31.58 to $1,279.15, $34 less than anticipated.
Since 60 percent of EI premiums are paid by employers, this is promising news. This EI premium freeze is estimated at saving employers and employees $600 million in 2014 alone. Payroll taxes such as EI are a big cost for smaller business and for businesses of any size, this announcement creates opportunities to divert funds that would have been allocated to EI premiums, elsewhere.
With this news, employers may look at hiring additional staff or investing more in wellness programs or introducing a new Health Care Spending Account. This announcement also creates an opportunity to revisit the group benefits and pension plan designs and consider making changes to optimize the benefits of the premium freeze.
If you have questions about making changes to your plan - whether tweaks or a large plan design overhaul - please contact us. We're here to help so you can focus on what you do best.
Dave Dickinson, B.Comm, CFP, CLU, CHFC
Experienced Benefits Specialist ready to optimize your group benefits and pension plans.