EI Premium Reduction Program
Highlights
This program is designed for businesses like yours that offer short-term disability plans to employees. By participating, you can reduce your Employment Insurance (EI) premiums, saving your business money. This reduction is possible because your plan provides benefits that match or exceed those offered by EI.
Key Benefits:
- Lower EI Premiums: Pay less than the standard employer rate of 1.4 times the employees' EI premiums.
- Financial Savings: The maximum savings per employee per year can be up to $236.05 with an enhanced cumulative paid sick leave plan.
- Employee Benefits: Ensure your employees receive timely short-term disability benefits, improving their job satisfaction and loyalty.
Why Apply?
- Cost-Effective Financing: This program offers a more affordable way to manage your EI premiums compared to other financing options.
- Easy Qualification: If your short-term disability plan meets the basic requirements, qualifying is straightforward.
- Enhanced Employee Support: Providing robust short-term disability benefits can help attract and retain top talent.
Applying for this program can lead to significant savings and provide better support for your employees, making it a smart choice for your business.
Financing Details
Type of Financing: Premium Reduction
Repayment Terms and Interest Rates:
- There are no repayment terms or interest rates associated with this premium reduction.
Eligible Expenses:
- The premium reduction applies to Employment Insurance (EI) premiums for employers who provide a short-term disability plan that meets specific criteria.
Use of Funds:
- Funds from the premium reduction can be used to offset the cost of EI premiums.
- Employers must return five-twelfths of the savings to employees covered by the plan.
Restrictions on Use of Funds:
- The funds cannot be used for any expenses outside of the EI premium payments and the required return to employees.
Fees:
- There are no fees associated with applying for or receiving the premium reduction.
Qualifications
- Must provide employees with a short-term disability plan.
- The short-term disability plan must:
- Provide at least 15 weeks of benefits.
- Match or exceed the level of benefits provided under Employment Insurance (EI).
- Pay benefits to employees within 8 days of illness or injury (the elimination period cannot exceed 7 consecutive days).
- Be accessible to employees within 3 months of hiring.
- Cover employees on a 24-hour-a-day basis.
- Must provide evidence of the employer's commitment to the short-term disability plan.
Must return five-twelfths of the savings to the employees covered by the plan.
Disqualifications:
- Employers who do not provide a short-term disability plan to their employees.
- Short-term disability plans that do not meet the specified criteria (e.g., less than 15 weeks of benefits, longer than 7-day elimination period, not accessible within 3 months of hiring, not covering employees 24/7).
- Employers who do not return five-twelfths of the savings to employees.
Description
This program allows your business to pay lower Employment Insurance (EI) premiums if you offer a short-term disability plan to your employees. By participating, you can save money on your EI contributions, which can be redirected to other areas of your business.
To qualify, your short-term disability plan must provide at least 15 weeks of benefits, match or exceed the benefits provided under EI, and pay benefits within 8 days of an illness or injury. This means you can offer better support to your employees while reducing your costs.
You must return five-twelfths of the savings to your employees, ensuring they also benefit from the reduced premiums. This program not only helps you save money but also boosts employee satisfaction and retention by providing them with enhanced benefits.
Program Steps
Complete the Application Form: Obtain and fill out the application form for the program.
Prepare Documentation: Gather the following documents:
- A copy of the short-term disability plan(s) provided to your employees.
- Any collective agreement(s) applicable to the employees covered by the short-term disability plan(s).
- The written mutual agreement between you and your employees regarding your obligation to return their portion of the reduction, if such an agreement exists.
Submit the Application: Submit the completed application form along with the required documentation.
Respond to Requests for Additional Information: If any documents are missing or additional information is needed, respond promptly to requests from the program administrators.
Receive Notification: Wait for written notification regarding the decision on your application. This will include the reduced rate you should use for calculating your employer EI premiums.
Adjust Payroll Calculations: Once approved, recalculate your employer EI premiums retroactive to January 1, based on the new rate. Make necessary financial adjustments in your next remittance of source deductions.
Distribute Savings to Employees: Ensure that employees covered by the plan benefit from the reduction in an amount at least equal to five-twelfths of the total savings.
Maintain Compliance: Continue to meet the program requirements and notify the program administrators of any changes to your plan, address, payroll deductions account, or organizational structure.