As employment lawyers, we regularly take on cases involving clients who have trouble accessing their employee benefits to get through short-term and long-term illnesses and injuries. Such benefits are administered by third-party private insurers. Claim processes are complicated and applications denied often, leaving ill, injured and disabled individuals to seek out legal services for recourse. For well over 30 years, such cases cause us to decry the lack of a national equivalent program administered by the federal government, particularly for short-term disability. To us, the implementation of such a program would require nothing more than simple modifications to existing programs, and it would dovetail perfectly with the long-held Canadian tradition of universal healthcare.
The Covid-19 crisis has put a glaring spotlight on this issue as governments of all levels recognize the need to keep workers financially compensated when they are off from work. And for those who fall ill, Canadians clearly understand that workers should return to their workplaces healthy, in both a physical and financial capacity.
Sick Leave and Private Insurance
While government officials tell Canadians to stay home when they are ill in order to curb the spread of COVID-19, the reality for individuals is not so simple. Presently in Ontario, employees have access to three days of unpaid sick leave annually. Unless employers offer it, they are not entitled to paid sick leave. Workers in other Canadian provinces do not fare any better. As a result, unless they are suffering from a severe illness or injury, most Canadians bite their tongue, take a pill, and push on with their day.
Fortunate employees receive disability benefits as an employment perk. This permits them to take short-term and long-term disability leaves of absence with some financial compensation. However, to keep costs low, many employers purchase “ADMINISTRATIVE SERVICES ONLY” (ASO) Plans from the insurers, particularly for short-term disability plans. With it, employers remain directly responsible for paying claims, but only after an “independent advisor” from the insurance company has assessed it. This unholy alliance is detrimental for employees on many fronts.
Firstly, anyone who has tried to access short-term disability benefits will attest to very poor treatment by administrators and unsympathetic employers. Collectively, they would lead one to believe we are a nation of lazy fakers and hypochondriacs, waiting for every opportunity to stay home, drink beer, and watch Netflix. This is predictable and not surprising at all. An insurance administrator’s job is to keep the costs down for their client, the employer. They do this with a standard operating procedure of delaying and frustrating all but the most seriously debilitated claimants into quitting the claims process and returning to work, prematurely.
Secondly, this arrangement makes insurance administrators the gatekeepers of patient wellness. They determine who can access treatment, for how long and when employees must return to work. This power rightfully belongs to the medical profession.
And finally, our most egregious point of contention rests with the privacy of medical data. The main reason why employers hire third-party administrators is to shield them from liability. Our privacy laws deny them access to employee medical data. Consequently, the claims process for these private disability plans requires individuals to disclose intimate details of their medical condition and treatment to paper-pushers untrained in the medical profession. This information is sacrosanct. It should remain between patient and physician. We now open up the potential for leakage. And to add insult to injury, the SCC specifically ruled Nayyar v. Manufacturers Life Insurance Company, that insurers cannot be sued when they err, because they act in the capacity of advisors, only.
COVID-19 and Insurance Claims
Covid-19 has created an uptick in insurance claims, making a terrible situation even worse for employees. Government officials have mandated that individuals who have travelled abroad or show symptoms self-isolate for a period of two weeks. Although recent legislation protects workers from being fired if they must stay home, the matter of their finances rests in the hands of insurance administrators. For some, two weeks without pay means choosing between putting food on the table or paying rent. We should not be surprised if desperate workers try to mask signs of illness by taking a pill to keep symptoms at bay, consequently putting their workplace at risk of infection.
Wrongful Dismissal Cases
Over the last decade, our firm has witnessed a disturbing trend between employee illness and dismissal. At least 40% of all wrongful dismissal cases have some component of disability leave. When employees give up on the tedious process of seeing a disability claim through, they invariably return to work prematurely. They are not ready to work at full capacity. Consequently, employers do not take kindly to their reduced productivity and treat them as “damaged goods.”
Unsurprisingly, the turn of events is predictable. Following a short grace period, the performance warnings begin to fly. We fully expect to see this trend with workers suffering from Acute Respiratory Distress Syndrome following a Covid-19 infection.
Like any lawyer practicing employment law, I find this infuriating. Here are a few examples of cases we have managed over the years:
· A 36-year-old production supervisor with an excellent work record laid on his hospital bed suffering from Lupus after six months of delay in approving his short-term disability claim. Meanwhile, back in the office, job performance warnings were accumulating on his empty desk.
· After her initial claim was rejected, a woman with breast cancer returned to work three months early from her chemotherapy, for financial reasons. The next day, she was told that she was to be the only person “restructured” in a large prosperous company.
· A senior employee who had been employed with a major bank for eight years was home on medical stress leave and had her benefits cut off after six weeks merely because her physician reported a positive response to treatment. She was far from 100% recovered. However, she started receiving daily calls from the workplace occupational health nurse about her return to work date to the team that ostensibly needed her. How much of her medical information passed from the insurance company to the employer was left unexplained.
· A young mother experiencing complications from her pregnancy was told by her employer, a US-based multinational company, that they would cut her off from their disability program, justifying it with an unwritten policy that she was not allowed to become pregnant while on disability leave.
These situations are not fictional and hardly atypical to the types of cases we see.
Lack of Accountability & Legal Recourse
Even before COVID-19, our courts began to discern the toxic symbiotic relationship between the HR departments and the insurance administrators they engage to weed out claims. In response, courts have tried to balance the interests of both the corporations and vulnerable employees, but with limited success. While you can sue your employer for obstructing your insurance coverage and claims, you cannot hold your medical insurance company liable for adjudicating your claim incorrectly, since they are merely “presenting advice.”
What ill, injured and disabled Canadians are experiencing with present-day income protection programs is equivalent to what Americans face with their privately run healthcare management system. Profit motivated parties, namely employers and insurers, become the ultimate arbiters of who receives income protection and who is left to fend for themselves.
A Direct Path to Poverty
Our current system puts vulnerable people in a vicious “disability purgatory.” Financially strapped individuals will not seek or receive treatment for their medical condition, even when the treatment is free, if they do not receive money during their time off from work. They will return to work sick under the threat of being fired for job abandonment. And when they do, with their illness in tow, they will face ongoing threats to their job security, this time for poor performance. The entire chain of events is set up to see such individuals fail. As a result, an increasing number of people shuffle their way to government-run, taxpayer-supported programs like EI, CPP, disability and even welfare.
This scenario is particularly deadly where COVID-19 is concerned. While we have kept our infection and fatality rates lower than the U.S., private disability insurance plans place us at risk for prolonged and continuous outbreaks in workplaces, negating the benefits we have gleaned from the commercial lockdown. And all of this will throw shade on the sacrifices frontline medical professionals continue to make in the hospitals across the land.
It cannot be more evident just how much Canadians require a reliable program for income replacement when they fall ill, one that puts their needs on equal footing with the treatment they deserve. Our present privately run system does little more than creating a deterrent for the worst employers. This is ineffective and akin to putting a finger in the dyke.
A National Short-Term Disability Program
We are not asking Canadians to support an expensive new government program to replace private short-term disability plans. In fact, a solution already exists. The present EI Sickness Benefits Program is well run and progressive. It currently provides up to 15 weeks of income replacement. All it requires is the opinion of a qualified medical professional that the applicant is sick or injured and unable to attend his or her duties at work for a specified period. The process is relatively simple and fair, and most importantly, it puts a medical professional in charge of the treatment and recovery of ill and injured Canadians. As a government-run program, not motivated by profit, administrators do not hound applicants incessantly for medical information or spitefully delay applications in a manner we have witnessed with private employer-sponsored programs. Most importantly, a public plan would prevent exclusion based on pre-existing conditions.
Upgrading EI Sickness Benefits
To be effective and comparable to private short-term disability programs, the EI Sickness Benefits Program would require a few enhancements. Expand it to 26 weeks and cover up to 70% of basic income, in exchange for a small increase to the EI insurance premiums. In addition, physicians could receive a stipend for standardized medical letters that they are now asked to provide for free. This would ensure that their opinions remain accurate, free of influence and to the best standards of their profession. General practitioners could take some of the load off specialists, who presently bear the burden of writing such letters for private disability plans. All the present rules regarding eligibility and fraudulent misrepresentation of claims would remain in place.
Even if employer premiums go up, they would save money compared to the cost of private insurance plans. And they could still maintain private plans for long-term disability or as a top-up to what is permitted under the enhanced EI Sickness Benefits Program. There would also be no reason to change the present laws, which require employers to return employees to comparable work when they recover. These laws would, in fact, carry more weight than they presently do, if employees had proper financial alternatives for returning to a workplace that does not accommodate them properly.
Also, governments would find long-term savings on tax-funded medical and legal programs when fewer people suffer health complications for returning to work prematurely from an illness.
Since the days of Tommy Douglas, Canadians have proudly upheld and defended universal health care. We categorically reject the model deployed by our U.S. neighbour. So why is health care treated as a human right in Canada, while an essential component of an individual’s treatment and recovery, namely time off from work, is not? Why do we let that part mimic the private healthcare system of the U.S. and set the most vulnerable in our society on the path to poverty?
A national short-term disability program, like universal health care, is an absolute necessity today, more so than ever. It would allow Canadians to be away from work when ill or injured with dignity and financial security.