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News from HUB Employee Benefits
July 2018 | Issue 26
 

A Look At Three Trends In Pension Plan Design

Scott Anderson, Vice President Retirement Plans HUB International, as published in Benefits Canada.

Plan sponsors often say they’re quite happy with their retirement savings plans. But is that position good enough to ensure an organization’s plan is competitive and benefits its plan members?

Some of the trends across Canada, as evident from employee requests, reflect the changing needs of the workplace. They include:

Group RRSPs or TFSAs with a DPSP component:

Alongside the move from defined benefit to defined contribution plans is a further shift to group registered retirement savings plans with a deferred profit-sharing component. In fact, group RRSPs and DPSPs now outnumber defined contribution plans two to one, according to the Canadian Institutional Investment Network’s 2017 survey of capital accumulation plans. RRSPs and DPSPs offer the employee and employer more flexibility and less red tape than traditional defined contribution plans.

In addition, employers are taking less of a paternalistic approach to the group saving plan and are permitting even more flexibility on the employee portion of the contribution. Rather than monitoring employee contributions and having employees pay taxes on the withdrawals, employers are simply allowing workers to save for whichever goal they have through contributions to a tax-free savings account with an employer match in a long-term vehicle such as a DPSP. The approach offers flexibility over the employee’s funds while allowing for restrictions on withdrawals and retention inducements on the employer-contributed component.

(continued at Benefits Canada:)

 

HUB's 2018 Benefits Barometer Canada Study is now available!

Read the results of our latest research study and learn what's top of mind for today's HR leaders, including top employee benefit priorities, most successful cost management strategies, challenges with securing executive management buy-in to evolve benefits and who they rely on for strategic advice and support. Find out how your peers and competitors are developing their employee benefits programs to remain competitive in today's marketplace.
Click here to download HUB's 2018 Benefits Barometer Canada Study!
 

Changes to OHIP+

Shawn Dagg, Consultant HUB International

Ontario has announced changes to the province's youth pharmacare program to make it second payer for Ontario citizens under age 25 who have coverage through private benefits plans. Christine Elliot, Minister of Health and Long-Term Care, said in a statement "our government is announcing our intent to fix the OHIP+ program by focusing benefits on those who do not have existing prescription drug benefits. Children and youth who are not covered by private benefits would continue to receive their eligible prescriptions for free. Those who are covered by private plans would bill those plans first, with the government covering all remaining eligible costs of prescriptions."

The expectation for our clients in Ontario was that the savings for the January 1, 2018 OHIP+ change were going to be minimal and that no price adjustment be implemented until the true effect was realized.  With the retraction of this change for dependents covered under an insured plan, any implemented price reduction would have been reversed.  Insured plans are once again first payer and OHIP+ will only cover eligible remaining prescription costs.

 

Keeping Dependent Records Up to Date

Karen Vandal, Senior Client Service Specialist HUB International

Summer is wedding season which reminds us of the importance of ensuring that an employee updates their information as they experience a Life Event.  Correct dependent, family status, and coordination of benefits information, as determined by Canadian Life and Health Insurance Association (CLHIA), is essential to ensure that claims are processed as efficiently as possible.
Human Resources (HR) may not always be the first to be advised when an employee experiences a Life Event so it is important to make team leaders and department managers aware that their employees should be notifying HR when they experience a Life Event, such as:

  • Addition of Spouse by Marriage or Common Law Relationship: Adding the spouse as a dependent and updating family status.  Paperwork can be provided to HR in advance to ensure the spouse is covered effective the date of the Life Event (e.g. date of marriage).
  • Birth/Adoption of Child: Adding a new baby as a dependent following date of birth/adoption while employee is on maternity/parental leave.
  • Deletion of Dependent Coverage: Losing a dependent through death, separation or divorce, or a child no longer meeting the dependent definition as outlined in the contract.
  • Continuing Coverage for an Overage Student: Notifying overage student eligibility once a child reaches the maximum age for dependent child coverage under the contract.  Evidence of overage student status is required on an annual basis prior to the commencement of the new school year (e.g. prior to August 31st each year).

Carriers require that any change resulting from a Life Event be made within a limited number of days (e.g. 31 days), otherwise evidence of insurability may be required.  Additionally, late applicant benefit limitations may be applied such as reduced dental maximums in the first 12 months following notification.
HR should provide a change form to the employee to capture all changes resulting from a Life Event such as change of address, name, or beneficiary.
 

 

Employment Insurance Parental Benefits Changes & Amendments

Effective December 3, 2017, the Employment Insurance (EI) Act was amended to provide new parents with the option to receive extended parental benefits. Parents of a newborn or newly adopted child can now choose to be paid EI parental benefits, at a reduced rate, for a maximum of 61 weeks. Extended benefits must be claimed within a 78 week period (18 months) after the week the child as born or placed for the purpose of adoption. The two parents can share the 61 weeks of extended parental benefits. Parents can choose to claim extended parental benefits only if their child was born or placed with them for the purpose of adoption on or after December 3, 2017. While employees now have the option to receive parental benefits for an extended period of time, that time may not coincide with the length of leave that they are entitled to under the appropriate Employment Standards Legislation.

The Canada Labour Code was amended (effective December 3, 2017) to extend the length of parental leave that can be taken by an employee to up to 63 weeks of unpaid parental leave that can be taken by an employee working for a federally regulated employer. While the Code provides for up to 17 weeks of maternity leave, subject to certain exceptions, the total amount of maternity and parental leave that may be taken cannot exceed 78 weeks.
Alberta’s Employment Standards Code was amended, effective January 1, 2018, to extend the lengths of maternity and parental leaves that can be taken by an employee working for a provincially regulated employer in Alberta. Maternity leave has increased from 15 to 16 weeks and parental leave has increased from to 37 to 62 weeks, making the total amount of maternity and parental leave that may be taken 78 weeks.
Ontario's Employment Standards Act was amended, effective December 3, 2017, to extend the length of parental leave that can be taken by an employee  working for a provincially regulated employer in Ontario. The entitlement to parental leave has increased from 35 weeks to 61 weeks for birth mothers who take pregnancy leave, bringing the total amount of pregnancy and parental leave that may be taken to 78 weeks. For all other new parents, parental leave has increased from 37 weeks to 63 weeks.

The following leave entitlement and leave handling outline is broken down by jurisdiction and legislation:

Federal
Qualifying period is six months. Maternity leave is 17 weeks. Effective December 3, 2017, maximum parental leave was increased from 37 to 63 weeks. Effective December 3, 2017, the maximum adoption leave entitlement was also increased from 37 to 63 weeks. The plan member can choose to continue all benefits coverage, all except disability, or no coverage. If the plan member chooses to continue the benefits coverage, the current premium contribution arrangement continues.
Alberta
Effective January 1, 2018 the qualifying period was shortened from 52 weeks to 90 days. Effective January 1, 2018 maternity leave was extended from 15 weeks to 16 weeks. Effective January 1, 2018 parental leave was extended from 37 weeks to 62 weeks. Effective January 1, 2018 adoptive leave was extended from 37 weeks to 62 weeks. As the plan sponsor, you can choose to continue all benefits coverage, all except disability, or no coverage. The plan member must follow your choice.
British Columbia 
No qualifying period. Pregnancy leave is 17 weeks. Maximum parental leave is 37 weeks; 35 weeks if pregnancy leave is also taken. Adoption leave is 37 weeks. The plan member can choose to continue all benefits coverage, all except disability, or no coverage. If the plan member chooses to continue the benefits coverage, the current premium contribution arrangement continues. If the plan member chooses not to continue premium contributions, it remains your choice as the plan sponsor if you want to continue premium contributions for benefit coverage for that plan member. As the plan sponsor, you must continue to make payments for benefits coverage that are 100% plan sponsor paid.
Manitoba
Qualifying period is seven months. Maternity leave is 17 weeks. Maximum parental leave is 37 weeks. Adoption leave is 37 weeks. As the plan sponsor, you can choose to continue all benefits coverage, all except disability, or no coverage. The plan member must follow your choice.
New Brunswick 
No qualifying period. Maternity leave is 17 weeks. Maximum child care leave, which includes leave for adoption, is 37 weeks; 35 weeks if maternity leave is also taken. As the plan sponsor, you can choose to continue all benefits coverage, all except disability, or no coverage. The plan member must follow your choice.
Newfoundland and Labrador
Qualifying period: 20 weeks. Pregnancy leave 17 weeks. Adoption leave 17 weeks. Parental leave 35 weeks. As the plan sponsor, you can choose to continue all benefits coverage, all except disability, or no coverage. The plan member must follow your choice.
Northwest Territories
Qualifying period is 12 months. Pregnancy leave is 17 weeks. Maximum parental leave entitlement is 37 weeks; 35 weeks if pregnancy leave is also taken. Adoption leave is 37 weeks. As the plan sponsor, you can choose to continue all benefits coverage, all except disability, or no coverage. The plan member must follow your choice.
Nova Scotia
Qualifying period is one year. Pregnancy leave is 17 weeks. Maximum parental leave is 52 weeks; 35 weeks if pregnancy leave is also taken. Adoption leave is 52 weeks. The plan member can choose to continue all benefits coverage, all except disability, or no coverage. The plan member must pay all premiums unless you, as the plan sponsor, choose to contribute.
Nunavut
Qualifying period is 12 months. Pregnancy leave is 17 weeks. Maximum parental leave is 37 weeks; 35 weeks if pregnancy leave is also taken. Adoption leave is 37 weeks. As the plan sponsor, you can choose to continue all benefits coverage, all except disability, or no coverage. The plan member must follow your choice.
Ontario
Qualifying period is 13 weeks. Pregnancy leave is 17 weeks. Effective December 3, 2017 the maximum parental leave increased from 37 weeks to 63 weeks, and from 35 weeks to 61 weeks if pregnancy leave is also taken. Effective December 3, 2017, adoption leave has also increased, from 37 weeks to 63 weeks. The plan member can choose to continue all benefits coverage, all except disability, or no coverage. If the plan member chooses to continue the benefits coverage, the current premium contribution arrangement continues. If the plan member chooses not to continue premium contributions, you, as the plan sponsor must continue to make payments for life, AD&D, health and dental benefits coverage if they are 100% plan sponsor paid. It remains your choice, as the plan sponsor, if you want to continue premium contributions for other benefits coverage for that plan member.
Prince Edward Island
Qualifying period is 20 weeks. Maternity leave is 17 weeks. Parental leave 35 weeks, 35 weeks if pregnancy leave is also taken. Adoption leave is 52 weeks. The plan member can choose to continue all benefits coverage, all except disability, or no coverage. The plan member must pay all premiums unless you, as the plan sponsor, choose to contribute.
Quebec
No qualifying period. Maternity leave is 18 weeks. Paternity leave (father) is five weeks. Parental leave is 52 weeks. Adoption leave is 52 weeks The plan member must continue healthcare benefits, including drugs. The plan member may also choose to continue all other benefits or all other benefits except disability. If the plan member chooses to continue benefits coverage, the current premium contribution arrangement continues.
Saskatchewan
Qualifying period is 20 weeks. Maternity leave/adoption leave is 18 weeks. Maximum parental leave is 37 weeks; 34 weeks if maternity or adoption leave is also taken. The plan member can choose to continue all benefits coverage, all except disability, or no coverage. The plan member must pay all premiums unless you, as the plan sponsor, choose to contribute.
The Yukon
Qualifying period is 12 months. Maternity leave is 17 weeks. Maximum parental leave is 37 weeks. Adoption leave is 37 weeks. As the plan sponsor, you can choose to continue all benefits coverage, all except disability, or no coverage. The plan member must follow your choice.