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EI Premium Reduction program: Are you eligible?

The Employment Insurance (EI) Premium Reduction Program is a way for employers who offer a short-term disability plan to their employees to reduce their portion of the EI premium. Since employees who have access to short-term disability plans may not have to collect EI benefits, the demand on the EI program is lower, so this program returns the savings to both employers and employees.

Are you eligible?

In order to be considered for lower EI premiums, your short-term disability plan must:

  • Provide at least 15 weeks of benefits for short-term disability
  • Match or exceed the level of benefits provided by EI
  • Pay the benefit to the employee within eight days of illness or injury
  • Be accessible to employees within three months of hiring
  • Cover employees on a 24-hour-a-day basis

You also have an obligation to ensure that employees who are covered by the plan benefit from the premium reduction by an amount at least equal to 5/12 of the total savings. 

How much is the reduction?

In 2017, the best reduced EI rate available to an employer was 1.163. The actual amount you save will vary depending on the kind of short-term disability plan you offer, and the total of your employees’ insurable earnings.

How to apply to the program

If your company’s short-term disability plan appears to meet the criteria and you are interested in applying for the EI Premium Reduction Program, please read the Program Guide before applying to the program

Once you are approved, the EI premium reduction will continue until you change or cancel the approved plan. If you do not qualify, you will be notified in writing as to the reasons your application has been denied. You may then choose to modify your plan to meet the eligibility criteria and resubmit an application.