For the past month, hundreds of thousands of people have been laid off for a period of ” temporary “.
What is the impact of an episode of unemployment on group insurance ?
There is no single answer. It depends on the clauses of the insurance contract and the financial health of the employer.
Three types of contracts
For contracts, they are of three types, explains Frédéric Venne, associate at Normandin Beaudry, an insurance broker collective.
Some do not include a clause of “continuation” in the event of a temporary layoff. In other words, employees find themselves without any protection as soon as they stop receiving their pay.
In contrast, the contracts retain the full guarantees during the period of unemployment. Between the two, there are regimes which maintain a partial hedge, they are very common. Usually, insurance salary (disability) jumping.
In the exceptional context, some insurers are open to maintain the coverage in disability contracts that do not contain. The premiums for the protection should, of course, be paid.
Who pays the premiums ?
The payment of insurance premiums is often shared between the employer and the employee. The distribution may vary in many ways.
At this time, there are companies who no longer have the means to pay their share of premiums and are forced to put the protection plan on the ice.
Other employers who are not in a lack of liquidity, meanwhile, offer to take the part of the employee of the time of the crisis.
What we see most often, in the opinion of the brokers consulted, what are the bosses that pay out all the premiums, but who ask their employees what they reimburse their share to the recovery of the business.
In other cases, they do not have the choice to require that their employees continue payment of their premiums while they are unemployed, not having strong enough to move the part of the staff.
Prescription drug insurance, the crux of the matter
The group insurance plans all include a component of prescription drug insurance, a must in Quebec. Impossible not to be covered, this is the end is a bit complicated of the case.
- When a person does not enjoy the protection of the employer, it must subscribe to the insurance coverage drug Medicare advantage plans for 2021, the premiums of which amounted up to $ 636 and per year.
- When an employee has access to a group insurance plan, it is obliged to adhere to prescription drug insurance, even temporary unemployment. It must, therefore, pay its premiums, otherwise it is illegal.
- The only way out, if he wants to avoid paying premiums while he is not working, it is to adhere to the group insurance of the spouse.
- If he should register for prescription drug insurance MEDICARE, it will pay only for the time during which it will not have been covered by the group insurance, at the time of making the statement of income, the following spring.