2017 Employment Insurance Changes

The Canada Employment Insurance Commission has recently confirmed the 2017 EI premium rates.

So, how will that impact your organization's plan? Well, let’s start with the numbers:

• The employee premium rate will decrease to $1.63 (from $1.88) per $100 of insurance earnings.
• The maximum employee contribution will also decrease to $836.19 from $955.04 in 2016.
• Meanwhile, the new employer premium rate is lower at 1.4X the employee rate, and the maximum employer contribution will decrease accordingly.
• If you’re in Quebec, where EI works differently, the EI rate effective January 1, 2017 will be $1.27 (from $1.52) per $100 of insurance earnings.

What does this mean?

These changes can translate into major savings both for employees and their employers, while some smaller employers may even qualify for an additional premium reduction.The 2017 rate change is the first under a new rate-setting mechanism that will set the EI premium rate annually at a seven-year break-even level, as forecasted by the EI Chief Actuary. Annual rate adjustments after 2017 will be subject to a limit of 5 cents.

That’s a lot of numbers! The end result of which can mean a little more money in your employee’s pockets.

But did you know these changes can impact parts of your group benefits plan? Employers have some due diligence surrounding these changes. Some questions you need to ask yourself to start are:

• Are you participating in the EI Premium Reduction Program?
• Is your short-term disability plan (be it insured or self-funded) still meeting the eligibility requirements, in light of these changes?
• Was your LTD plan designed to kick in as the EI benefit is exhausted?
• Should you make any changes? Do you know what your options are with your insurer?

Also, while the total EI benefit duration itself is not reduced, there is a shorter waiting period for EI benefits — it was reduced from two weeks to one week. If you offer long-term disability benefits to your employees, you’ll want to ensure it still meets your corporate/employee needs.

If you're thinking "what’s right for my organization, what changes are needed, and what are my choices?", it might be time to talk to your broker to ensure you’re getting the most from your group benefits plan.

No broker? No problem.

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