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Do you have a Corporate Sick Leave Policy? You need one!
When an employee becomes disabled, it is a tough time for everyone involved. Understanding how the benefits are impacted during this period is essential.
The initial step is for the employee to obtain disability benefit payments. This can be either through your group insurance program or other sources (i.e. EI, CPP, and WCB). Once approved under your group disability (whether short term or long term) or another source, and depending on the benefit provider, a waiver of premium is in most cases applied for the Life and Disability. Typically, there is not a waiver of premiums for Medical and Dental.
What happens to the Medical and Dental benefits?
Medical and Dental coverage will continue for a period of time while an employee is on an approved sick leave. Who pays the premiums and the length of time the benefits remain in place will depend on your corporate sick leave policy. As such, every company should have a formal policy addressing these circumstances. This policy should be clear and done prior to a claim.
Factors to consider when creating a benefit continuation during sick leave policy:
• How long will your insurer allow disabled employees to remain covered for Health and Dental?
• Will you provide benefits for a specific period, within the insurer parameters?
• Should the length of benefit extension be determined by years of service model?
• Do we continue coverage the same as the other full-time employees?
Once you determine the best fit for your organization, you can begin to implement a policy around these instances, keep in mind your responsibilities:
• Seek legal counsel to help build and maintain your corporate policy. Engage them in the process when you are dealing with a disabled employee.
• If you consider your disabled employee to be an employee, coverage will continue.
• In order to remove a disabled employee from your benefit plan, the employment must be terminated. In other words, you cannot terminate an employee from your benefit plan for being disabled. Always review your legislation and seek legal counsel prior to terminating an employee on leave.
• Worker’s Compensation may also have specifications and provisions mandating you to provide this coverage for an extended period. Review the legislation to ensure compliance.
What happens if a disabled employee is terminated?
Once a disabled employee’s coverage is terminated, the benefits under a waiver of premium will remain in force, as no further premium is required. In most cases this includes: Life Insurance, Accidental Death and Dismemberment and Long-Term Disability. These coverage waivers will remain as long as the employee continues to be disabled, is under the maximum age of the plan or returns to work. The Health and Dental benefits will cease in this scenario.
Many policies allow a conversion option for employees who are terminated from the plan. Contact your Core Benefits advisor for further information on plan design and pricing.
To conclude, always remember:
• Understand your businesses rights and responsibilities
• Engage your legal counsel in the process
• Evaluate the financial impact to your business and the benefit cost to active employees
• Talk to your Employee Benefit Advisor about your policy provisions and options
• Maintain commitment to your team’s health and safety
If you would like more information or would like to discuss further, please give us a call. We would be happy to help!