It’s official – the World Health Organization now recognizes the novel Coronavirus (formally known as COVID 19) as a global pandemic and we’ve been in the midst of it for some time now. The Canadian government is encouraging people to stay home if they are sick with cold/flu-like symptoms such as fever or cough, and to self-quarantine for 14 days if they either traveled to an affected region, or have been in contact with an infected person. What disability benefits are avaialble to employees affected by COVID19?
Many employers are wondering what will happen if one of their staff is quarantined due to COVID19? What options do employees have? Of course, using paid sick days or vacation days can be an option. But what happens if an employee has to take unpaid time off, and what kind of coverage is available through an employee benefits plan and elsewhere?
There are two options employees can consider for financial support: either their short-term disability plan, if available as part of the benefits package, and/or financial support offered by Canadian Government.
Short-term Disability Benefits
If an employee is staying home because of an illness (for example: they are ill with coronavirus symptoms), they may be able to claim short-term disability if it’s available as part of the employer’s benefits plan.
A standard short-term disability plan will begin to pay on the first day when an employee is off work dueto an injury, or hospitalization. It will begin to pay on the 8th day when an employee is off work due to
an illness. Our blog on Disability Benefits has more information on how disability benefits work in group benefit plans. The time lapse between the day that the illness starts and the day the benefits start to pay is called a “waiting period” which is also referred to as an “elimination period”.
With COVID19 cases becoming more widespread, some insurance carriers are starting to discuss potentially waiving the waiting period for employees that are infected with coronavirus. However, this pandemic is evolving quickly; it is a good idea to check with your group benefits insurance carrier about qualification criteria for disability benefits and their approach to claims related to COVID19 employee benefits.
Individuals who have been advised by medical personnel to be quarantined, may also qualify to receive STD benefits through the quarantine period. Each benefit carrier will have an approach to this situation and we advise that you contact your carrier to find out how they will handle this situation.
Individuals who quarantine themselves, or at the request of their employer may not be eligible for STD, but this is also a situation where each carrier may differ in how they handle this.
Eligible employees can also apply for government support such as Canada Emergency Response Benefit.
Government support program changes due to COVID19
Canada Emergency Response Benefit (CERB) will provide temporary income support for employees who had to stop working because of COVID19 and would otherwise be eligible for Employment Insurance (EI) regular or sickness benefits. Basically, during COVID19, CERB is temporarily replacing EI.
EI (Employment Insurance) is a federal program where eligible employees could get up to 15 weeks of employment insurance if they cannot work due to a medical reason. Plans for Employment Insurance have a one-week waiting period before benefits start.
How much financial support can an employee receive?
Canada Emergency Response Benefit will provide $500 a week for up to 16 weeks.
Prior to COVID19, Employment Insurance paid 55 percent of earnings, up to a maximum of $573 per week, for up to 15 weeks. This amount was considered taxable income.
Short-term disability insurance benefits typically cover a higher percentage of income than EI (often around 66.67 percent of weekly income or more) as well as a higher weekly maximum. Short-term disability plans can be taxable or non-taxable depending on whether the employer or employee pays the premium. Your employee benefits policy booklet would usually outline the specifics of each policy.
If you’d like to review your short-term disability program, or learn more about disability benefit plan options, how they work, and how they can be coordinated with government benefits, get in touch with us, we’d be happy to help you.