The Danger of Not Having a Continuation of Benefits Policy

The Danger of Not Having a Continuation of Benefits Policy

For many smaller companies, having a dedicated Human Resources team is not feasible. HR tasks are often handled by someone working double-duty from another position or directly by company leadership as needed. With lots of things to take care of, important things can fall through the cracks. One important aspect that many companies overlook is the implementation of a Continuation of Benefits policy. 

What Is a Continuation of Benefits Policy?

When it comes to extended benefits plans, covering your currently active employees is a relatively straightforward process. But what if those employees are sick or injured for an extended period of time? 

Employers and employees alike often assume that the benefit program will remain in place during a period of disability.  The question is, how long? For the purposes of this discussion, we’ll look at a situation where the employer is paying for the benefit premiums.

Continuation of Benefits Legislation

In Canada, this can vary by province. In some areas, employers can choose whether or not to continue paying insurance premiums during an employee’s absence or have employees pay their own premiums for that period. This enables the benefits to remain active but gives businesses a chance to lower their financial obligation.

It’s crucial to note, though, that the choice of whether or not to pay premiums for absent employees must be consistent across the board. And in the case of medical leave, the choice is moot — employers must continue paying their share in accordance with the Canada Labour Code.

In Ontario, however, there is no option to halt premium payments. Employers are required by the Employment Standards Act to continue paying their portion of an absent employee’s benefits unless the employee in question provides written notice that they aren’t going to pay their own portion of any benefits contributions. So an employer’s only defense against significant and ongoing benefits payments may be the inclusion of a Continuation of Benefits policy in their handbook.

Having the Right Policy In Place

In many cases, companies fail to enact policies covering contingencies like these until it’s too late. If a situation arises before you have an adequate plan in place, dealing with the potential litigation and other fallout can cost your company dearly. 

If your company has a properly researched and clearly defined Continuation of Benefits policy, however, managing situations like these is a straightforward process. Essentially, a Continuation of Benefits policy should outline how long your business will cover benefits like insurance premiums in the case of an absence and should be signed by all employees when they onboard. This will provide some legal protection if any disputes arise.

Craft Sustainable Benefits Policies with Zarmac

Zarmac Benefits has been providing benefit programs to both new and established businesses for over 20 years. We take the time to analyze what you need and customize a benefits package specifically for your business style, now and for the future. 

Zarmac provides substantial analysis specific to your business in order to deliver real choices, advise on trends, streamline renewals, and optimize your plan design. We make it easy for you and your team by supporting the management of your program. We also proactively educate and eliminate questions to ensure there are no surprises.

Ready to protect your business and your team? Find out more about the Zarmac difference!


We have some exciting news at Zarmac Benefits! We are extremely pleased to announce our merger with Marquee Benefits Inc., a highly respected benefit and pension solutions consultant based in Barrie, Ontario. Our newly combined firm will be conducting its practice as Marquee Benefits Inc., effective February 13, 2024.

Marquee Benefits shares the same values as we do. A genuine approach based on extensive knowledge of the industry and genuine desire to help create the right benefit solution for your organization. Please feel free to connect with us if you have any questions.

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