An employee comes into your office and announces that she is pregnant or adopting. What do you tell her about her benefits plan? If you are stumped for answers, you are not alone. Many businesses understand that Canadian Employment Insurance (EI) will cover salaries during a maternity or paternity leave, as it is a government-mandated service that is funded by regular contributions from both employer and their employees.
However, when it comes to health benefits, disability and life insurance, and other wellness initiatives, the answers are not so straightforward. Here is what you need to know about employee benefits when one of your own is expecting.
Every Province Is Different
In British Columbia, the employee must decide whether or not to continue participating in the benefits plan. If they do continue, the employer must continue paying the full premium, if this is how the plan was originally setup. If there was a contribution on both sides towards to the premium, the usual breakdown of payment continues as well. However, if the employee opts out, the employer is freed of any contribution. Other provinces such as Alberta give the employer the right to decide what will be paid during the leave, including omitting disability or not covering anything at all. Every province is different, so consulting official guidelines such as those provided by the Canadian government, or reaching out to your benefits consultant is recommended.
Benefits Plan Contributions
If an employee is contributing to the premium for the benefits plan, the organization will need to setup a payment plan for the contribution. Normally, the benefits premium would be deducted directly from the employee’s salary. However, seeing as though the employee on maternity or paternity leave is receiving their benefit directly from the Employment Insurance (EI) program, some businesses organize a series of post-dated cheques to collect premium payments. If for some reason payments are not received for regular monthly contributions, the employer then has the means to cancel the policy, once all steps have been taken to reach the said employee.
Moving from Individual to Family Plan
Some employees might already be on a family plan where their spouses are covered under their benefits plan. Adding a child to the same plan would only require very little administration work and usually no change in premium, or a small increase in premium if the company charges less for couple rates compared to family rates. Other cases might involve a single mother who will have to move from an individual to a family plan. Here, the increase in premium might be higher, but automatically entitles the child to benefits. If there is a contribution to be made by the employee, the employee may decide to opt out and minimize the impact on their single EI benefit.
Keeping Up with the ABCs of Legislation
Even if an employee decides to opt out, all benefits are automatically re-instated once the employee returns to the office full time. It is also important to note that there are qualifying periods for the duration of their leave that need to be considered, and legislations regarding EI allocations and benefits are constantly changing. If an employer does not have the time to keep up, relying on a knowledgeable benefits consultant can help streamline your discussion with expecting parents. A benefits consultant can also work directly with the insurance company on your behalf to make any plan adjustment during the employee’s leave. After all, when there is a new addition to the family, the last thing on everyone’s minds is benefits.
Whether you are with a business, association, or owner operator, we have the solution for your needs.