Increase in EI maximum insurable earnings affects STD plans

 

 

#154
PDF version



The federal government recently announced the 2009 Employment Insurance (EI) premium rates and maximums.

 

2008

New rates for 2009

Maximum insurable earnings

$41,100

$42,300

Maximum weekly EI benefit

$435

$447

 

This increase affects Short-Term Disability (STD) plans where:

  • the maximum STD benefit is based on the EI maximum weekly benefit ($447 for 2009), or
  • the EI maximum earnings amount is used to calculate the STD benefit.

System changes

We updated our systems so that STD claim payments reflect the increase in EI maximum insurable earnings threshold, and premiums reflect the increase in the STD benefit amount payable.

  • If your plan doesn’t need a contract amendment, these updates are effective January 1, 2009.
  • Although the revised STD benefits payable is effective with the January Notice of Payments due, some plan sponsors may not see the revision until their February Notice. In those cases, the Notice will also show any retroactive adjustments for January.
  • If you prepare your own premium statement, you will need to ensure you incorporate these changes into your system and processes.

Contract adjustments

If your plan’s maximum disability benefit is based on the EI maximum weekly benefit or earnings, no contract amendment is required. STD benefits will be automatically-adjusted for claims where the total disability started on or after January 1, 2009.

If your plan’s specific maximum benefit amount is less than the EI weekly maximum of $447, you need to let us know if you want to adjust your STD benefit payable to reflect the new EI maximum weekly benefit. It’s important to understand that continuing with the lower benefit amount may mean your plan will no longer qualify for the EI premium reduction program.

This chart outlines the applicable EI rate changes for 2009:

Employment Insurance 

(all provinces except Quebec)

2008

New rates for 2009

Maximum insurable earnings

$41,100.00

$42,300.00

Maximum weekly benefit

$435.00

$447.00

Employee premium rate
(per $100 of insurable earnings)

$1.73

$1.73

Employer premium rate
(per $100 of insurable earnings)

$2.42

$2.42

Maximum annual employee premium

$711.03

$731.79

Maximum annual employer premium

$995.44

$1024.51


Employment Insurance and Quebec Parental Insurance Plan (Quebec only)
 Employment Insurance

2008

New for 2009

Maximum insurable earnings

$41,100.00

$42,300.00

Maximum weekly benefit

$435.00

$447.00

 

Employee premium rate (per $100 of insurable earnings)*

$1.39

$1.38

Employer premium rate (per $100 of insurable earnings)*

$1.95

$1.93


QPIP

Maximum annual insurable earnings

$60,500.00

$62,000.00

Employee premium rate (per $100 of insurable earnings)

$0.450

$0.484

Employer premium rate (per $100 of insurable earnings)

$0.630

$0.677


* Rates are lower than in the rest of Canada because of the Quebec Parental Insurance Plan (QPIP) that took effect January 1, 2006. With this legislation, Quebec offers its own parental benefits.

Have any questions?


Please contact your Sun Life Financial group representative.