Trusted Tips and Resources

Trusted Tips & Resources

Trusted Saskatoon Group Benefits Advisors at Wiegers Financial & Benefits Explain The EI Premium Reduction Program

Wiegers Financial & Benefits is one of Saskatchewan's largest private financial planning and employee benefits consulting firms.  In this latest Wiegers Group Benefits expert tip, they explain how the EI Premium Reduction Program benefits employers and employees with group short-term disability insurance. Wiegers Financial & Benefits is a Trusted Saskatoon Insurance and Group Benefits expert.

 

EI PREMIUM REDUCTION PROGRAM BENEFITS 


WHAT IS THE EI PREMIUM REDUCTION PROGRAM?

The Employment Insurance (EI) Premium Reduction Program is a government incentive that allows employers to pay EI premiums at a reduced rate if their employees are covered by group Short-Term Disability insurance.  The Program intends to reduce the EI premiums of both the employer and the employees (though, for administrative reasons, legislation reduces only the employer’s premiums).  Consequently, the Program requires that the employer return a portion of the savings to all the employees for whom the reduced rate applies.  Some of the more popular means of doing this include providing employees with a cash rebate (taxable income), paying for new or enhanced employee benefits, or hosting a staff party – each of which typically has a direct and positive impact on employee morale.  Only written mutual agreements that identify how the employees will benefit from the reduction will be accepted.

Your company qualifies for the EI premium reduction if it:

  • Provides at least 15 weeks of benefits for Short Term Disability
  • Matches or exceeds the level of benefits provided under EI
  • Pays benefits to employees within eight days of illness or injury (the elimination period cannot exceed 7 consecutive days)
  • Is accessible to employees within three months of hiring
  • Covers employees on a 24-hour-a-day basis

HOW MUCH CAN YOUR COMPANY SAVE?

Maximum insurable earnings in 2021 are $56,300.  An employee who earns this much (or more) will pay EI premiums of $889.54 (calculated at 1.58%). For this calculation, we have used a reduced employer multiplier of 1.166.  Note that reduced rates change annually on January 1st and are prorated throughout the year.  If you apply effective January 1st, your rate will be slightly lower than if you apply at a later month in the year.

Employer regular premium =                                          $889.54 x 1.4 = $1,245.36

Employer reduced premium =                                        $889.54 x 1.166 = $1,037.20

Amount of total premium reduction =                              A – B =  $208.16

Employee’s portion of reduction =                                 C x 5/12 = $ 86.73

Employer’s portion of reduction =                                  C x 7/12 = $121.43


Assuming the above numbers, an employer can save as much as $121.43 annually in EI premiums per employee and can return $86.73 in some form to the employee and/or his or her colleagues.  The financial incentives for utilizing the program are clear.


WHAT MUST I DO TO PARTICIPATE IN THE PROGRAM?

To participate in the Program, you must register by submitting an initial application form, which is available on Service Canada’s website at www.servicecanada.gc.ca.  If you already participate in the Program, you needn’t reapply; your entitlement will continue until you change or cancel your approved plan.

Debra L. Wiegers, GBA, CLU, Ch.F.C.
Managing Principal, Benefits Division  

Wiegers’ Benefits Consulting Division includes many consultants and support staff who custom-design the most employee-valued and cost-effective group benefits, personal insurance, employee assistance programs, and retirement plans available. Contact them today for a no-obligation consultation to determine how they can help you.

Wiegers Financial & Benefits are Trusted Saskatoon Insurance and Group Benefits Advisors 

Trusted Saskatoon Group Benefits Advisors at Wiegers Financial & Benefit Share The Importance of Benefits Plan Administration Tasks

Wiegers Financial & Benefits is one of the largest private financial planning and employee benefits consulting firms in Saskatchewan. Its Saskatoon Financial Planning Division provides business owners, households, retirees, and students with expert investment and insurance planning services to help them reach their long-term financial goals. They also have a Benefits and Personal Insurance planning, division. In this latest Wiegers Group Benefits expert tip, they explain the importance of benefits plan administration tasks. Wiegers Financial & Benefits are Trusted Saskatoon Insurance and Group Benefits experts.

 

THE IMPORTANCE OF BENEFITS PLAN ADMINISTRATION TASKS


Plan administration is an important job! An eligible employee who is not insured correctly or who has not been offered benefits can not only have a negative impact on the employee’s well-being but it can also pose liability issues for you and the business.

What types of plan administration tasks do you need to remember?

Most such tasks apply to all employees so they should become an automatic part of your group benefits plan administration. Some of the most important tasks include the following:


  • It is the employer’s responsibility to ensure that each employee is enrolled properly and on time. If an employee is enrolled late on the plan (typically 31 days after becoming eligible to join), his or her coverage is typically not guaranteed. The employee and his or her dependents will be considered late applicants, and will need to complete and submit forms about their health. They will then need to be medically approved before enrolling on the plan, at which point they will likely learn that their coverage is restricted or has been declined entirely. This not only has the potential to negatively impact the employee’s and/or dependents’ well-being but it also poses a significant liability risk to the employer. It is far better and easier for everyone for an employer to enroll an eligible employee properly and within the required timeframe.

  • In almost all cases, it is to the employer’s and employees’ benefit to make participation in the benefits plan mandatory. If an employee was permitted to join a plan only when he or she anticipates needing a claim paid, this would make the plan financially non-viable; both non-claimers and claimers need to be contributing premiums into a plan to build up funds to cover claims (similar to home and other forms of insurance). This is why Wiegers Financial & Benefits recommends that employers make participation in their benefits plan mandatory for all eligible employees. If, though, you wish and are able to permit employees to waive all benefits coverage under your plan, it is important that you have those employees sign a group benefits plan waiver form that makes clear that you offered coverage to these employees but that they chose to decline it.

  • Almost all group benefit plans permit an employee to waive Health and/or Dental coverage if he or she has comparable coverage through another plan (typically a spouse’s plan). The employee must be enrolled for all other applicable benefits on the plan as Life, Disability and other benefits are not offered to dependents.

  • Changes to an employee’s coverage must be submitted to your group insurance carrier no later than 31 days after the event. Have your employees communicate regularly with you about changes that need to be made such as:
    • Marriage, divorce, new baby, legal guardianship of child (requires proof)
    • Overage dependents, enrollment in a secondary school with the required amount of classes
      Note: Dependents over age of 18 working more than 20 hours per week are not considered eligible for coverage under a parent and should be removed from the benefits plan

  • If you have employees who are eligible to apply for additional Life and/or Disability coverage above what is automatically provided through your benefits plan, it is your responsibility to advise them of the option to apply. To apply, the employee must complete a health questionnaire provided by the carrier. If he or she chooses not to apply, Wiegers Financial & Benefits recommends that the employee sign a waiver confirming that he or she is aware of the option to apply for additional coverage but has decided against it.

There are, predictably – or not-so-predictably – a number of other plan administration tasks that employers like you need to be diligent about remembering to do to ensure that your employees and their dependents have all of the coverage available to them (and that you’re not doing anything to put yourself or your business in a liable position). An effective and talented benefits advisor will ensure that you are aware of all of the plan administration tasks you need to be aware of, and will ensure that you are also aware of any particularities about your own plan that differ from the norm. As long as you remember to do what you need to do, you’ll have a benefits plan that helps you take care of your valued employees and their families while also preventing you from liability. Benefits plan administration done correctly is a win for all.


Amanda Getzlaf,
Benefits Account Manager, Wiegers Financial and Insurance Planning Services Ltd.


Wiegers’ Benefits Consulting Division includes many consultants and support staff who custom-design the most employee-valued and cost-effective group benefit, personal insurance, employee assistance programs, and retirement plans available. Contact them today for a no-obligation consultation to determine how they can help you.

Wiegers Financial & Benefits are Trusted Saskatoon Insurance and Group Benefits Advisors 

Trusted Saskatoon Group Benefits Professionals at Aurora Workplace Solutions Explain The Benefits of Group Benefits

Aurora Workplace Solutions are about creating brilliant futures by developing wealth security for businesses and individuals. As experts in the industry, they keep on top of recent news including changes to relevant group benefit plans, retirement savings options, and guidelines and policies. They also keep their eyes open for informative articles we think are of interest to our current and potential clients. Aurora Workplace Solutions are Trusted Saskatoon Group Benefits and Insurance Professionals! 

Importance Of Group Benefits Explained 

The Benefits of Group Benefits 


Group benefits refer to employee benefits provided by employers to their employees as part of a group insurance plan. These benefits offer several advantages to both employees and employers. Here are some key benefits of group benefits


 1.Comprehensive Health Coverage: Group benefits typically include health insurance coverage, which provides employees with access to essential medical services. This can include coverage for doctor visits, hospital stays, prescription medications, paramedical services (such as physiotherapy, chiropractic care, and massage therapy), and other healthcare needs. Having comprehensive health coverage helps employees manage their healthcare costs and ensures timely access to necessary medical treatment.


2. Extended Health Services: Group benefits often include coverage for additional health services that may not be covered under provincial healthcare plans. This can include vision care (eye exams, glasses, and contact lenses), dental care (preventive, restorative, and orthodontic treatments), and other paramedical services like psychologists or naturopaths. These extended health services provide employees with enhanced wellness and preventive care, promoting overall health and well-being.


3. Income Replacement: Group benefits typically include short-term and long-term disability insurance, which provides income replacement for employees who are unable to work due to illness, injury, or disability. This coverage ensures that employees have a source of income during periods of absence from work, helping them manage their financial obligations and maintain their standard of living.


4. Life and Accidental Death Coverage: Group benefits often include life insurance coverage, providing financial protection for employees' dependents in the event of their death. Additionally, accidental death and dismemberment coverage may be included, which provides benefits in case of accidental death or severe injuries resulting in permanent disability. These coverages offer peace of mind and financial security to employees and their families.


5. Employee Retention and Attraction: Offering comprehensive group benefits is an effective tool for attracting and retaining talented employees. In a competitive job market, quality benefits can differentiate employers and make their job offers more attractive. Employees value the security and peace of mind that comes with having access to health coverage, disability protection, and other benefits. It also demonstrates that employers care about their employees' well-being, fostering a positive work environment and increasing employee loyalty.


6. Cost Savings for Employees: Group benefits often provide more cost-effective insurance coverage compared to individual plans. Employers negotiate group rates with insurance providers, resulting in lower premiums for employees. Additionally, group benefits often cover pre-existing conditions without exclusions or waiting periods, which may be a limitation in individual insurance plans.


7. Tax Advantages: Group benefits can provide tax advantages for both employers and employees. In Canada, group benefit premiums paid by employers are typically tax-deductible as a business expense. For employees, the premiums paid towards group benefits are often made on a pre-tax basis, reducing their taxable income and resulting in potential tax savings.


It's important for both employers and employees to carefully review and understand the specific terms, coverage limits, and exclusions of the group benefits plan to ensure it meets their needs. Consulting with Aurora can help in selecting and customizing the right group benefits plan for the organization and its employees.


Aurora Workplace Solutions design & create custom group benefits plans that meet custom organization goals. Read more about their Group Benefits Plans or contact them today to get started!

'Creating Brilliant Futures'


Aurora Workplace Solutions are Trusted Saskatoon Group Benefits and Insurance Professionals! 


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