February 2023

Welcoming a baby can be a monumental event in one’s life – but as exciting as it may be, the news of a pregnancy can also bring a list of concerns for expectant parents. As employers, being ready and willing to offer maternity and parental leave is great, but navigating your other obligations to an expectant employee can still be daunting. What are your responsibilities with regards to maternity and parental leave? What is required of you once an employee is on leave? 

In this Beyond Benefits edition, we’ll go over some of the common questions employers may ask themselves as well as best practices for when employees go on maternity/parental leave.

Do employees continue their group benefit coverage while on maternity/parental leave?

While on maternity/parental leave, employees are entitled to the same employee benefits that they received while working, as they are still employed by you. These benefits can include insurance, vacation, sick days, etc. Most of the time, it’s a legal requirement for the company to continue their benefits; in fact, it’s written into most provincial legislation, meaning companies aren’t able to choose whether they continue benefits or not.

In cases where continued benefits are not legally required, we always recommend employers still continue coverage for their employees during a parental leave. It’s during this time in your employee’s life when it’s extremely important to have access to benefits – not only for the parents themselves, but for their newborn child, as well. Continuing benefits for your employees during parental leave shows that you care about their wellness outside of work, which can ultimately help to increase employee satisfaction and retention. 

Do I continue paying for their monthly premiums?

Contributions towards employment benefits, such as life insurance, disability, dental, medical etc. should be paid during an employee’s leave if they were receiving these benefits during their employment. If you have a cost-sharing arrangement, you can choose to continue paying a portion of the employee’s premium during this leave, or even increase it to cover more or all of the cost – aka, go above and beyond for your employee during this important time. (Keep in mind that employers who choose to do this must do so for all employees who take a leave of absence – you can’t pick and choose!)

What about employee contributions towards group benefits? 

Employees responsible for a portion of the cost of benefits during employment continue to be responsible for that portion while on leave. Since they will be off payroll, we’ve seen most companies collect post-dated cheques that will cover the cost of the employee premiums owing. 

Should I encourage my employees to continue benefits during their leave?

Ultimately, the answer to this question can only be answered by you, the employer! When thinking this through, it’s important to consider the reason you’re providing your team with a benefits plan in the first place – if keeping your employees happy and healthy is top of mind (which it should be!), then it’s worth chatting about continuation of benefits with employees before a leave of absence. 

Pregnancy and childbirth is not without risk of complications, so continuing with a benefits plan during a leave is always worth considering for your employee. Remember, it may be difficult for many employees to justify paying premiums on a reduced salary, leading some to pass up continuing with their benefits during that period. 

What if my employee doesn’t want to continue benefits during their maternity/parental leave?

As an employer, it’s a good idea to do your due diligence and inform your employees of the risks involved in choosing not to continue with their benefits coverage during their leave. However, if the employee still wishes to go on leave without continuing coverage, it is ultimately their decision – but you may ask them to sign a waiver accepting the risks and liability. 

For an extended leave beyond the legislated time, approval from the Insurance Carrier will be required.

As with many things in group insurance, not handling continuation and extension of benefits properly could open up employers and even Plan Administrators to potential liabilities. It’s important to handle these requests appropriately, and Plan Administrators are encouraged to speak with their Insurer and their group insurance Advisors at Humi if unsure.

As a final reminder, make sure to add the new baby as a dependent on the benefits plan within 31 days to avoid late applicant status and to ensure the new family member is covered under the group plan too!

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