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Employment Insurance (EI) Sickness Benefit Extension

Updated: Nov 30, 2022

In this article, we're outlining how the extended EI Sickness benefits announced in the 2022 federal budget impacts disability programs and considerations for your plan.

Employment Minister Carla Qualtrough announced on Friday, November 25, 2022, that the federal government will extend EI sickness benefits from 15 to 26 weeks effective December 18, 2022. (Only available to new claims established on or after December 18, 2022).



There are many questions about how this change will impact employers, and many of those are still unanswered. Will there be a rate impact? What happens to STD programs that are integrated with EI?


Impact to disability plans with Long-Term Disability (LTD) Only

Under the current EI rules, employees would be required to inform EI that they are receiving income from a Long Term Disability benefit. If they did inform EI, then EI benefits would be reduced. Unfortunately, it is likely that many people will not report LTD earnings and receive both the full EI sickness benefits and LTD benefits. In some situations, the employee could be making more on disability than working for a 7-week period.


For plan sponsors who don’t offer an insured short-term disability program, you might have the option of adjusting your LTD plan to the new 26-week elimination (waiting period) period if members claim EI prior to accessing LTD benefits.


This adjustment would help to avoid the plan member receiving disability and EI payments at the same time and potentially being required to return funds due to overpayment. However, the EI benefit may be less than an LTD benefit and this should be considered when deciding what works best for your organization.



Impact to short-term disability (STD) benefits integrated with EI

Plan sponsors with EI-integrated STD may wish to adjust benefits to line up with the new 26-week extension.


Considerations regarding changes to your disability program

Disability claims management offered through the insurers can help to ensure that employees are accessing treatment and working towards getting back to work sooner. There is significant value in early intervention and care.


Disability management teams have resources that help get people back to work faster, and they actively work with organizations to create return to work programs.


It's important to weigh the cost reduction of LTD benefits to the new 26-week waiting period and the increased risk of a disabled employee not returning to work or having a disability last longer.


Remember that group benefit plans are first payor. It's best practice to let a disabled plan member know that they must inform EI that they are receiving LTD benefits from their employer. This may result in the plan member having to return money to the government.


Impact to Employment Insurance Premium Reduction Program (PRP)

The Premium Reduction Program allows employers with eligible STD plans to pay lower EI premiums. The eligibility criteria have not changed at this time. The government plans to review the PRP in 2024.


We will continue to keep a close eye on this legislative change and confirm how insurers will address this change.


Please reach out to us if you would like to discuss how this change could impact your plans.



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