Canada Life furore continues: Ottawa should 'fully compensate' victims of delays, denials of claims

The federal government should fully compensate employees who have suffered financial loss as a result of Canada Life's unjustified delays or denials of claims, according to the federal committee investigating the changeover of the public service health-care plan to Canada Life.

“The contract did not require [Canada Life] to fully deliver the [plan] to 100% of the 1.7 million members and dependents on July 1, 2023," the date of the changeover, said Pamela M. White, former director of health data analysis for Statistics Canada, told the committee that in her opinion.

"It appears that there was no expectation of full delivery of the service until Jan. 1, 2024, when [government] monitoring would commence," she said.

The Public Service Health Care Plan (PSHCP), the largest health care plan in the country, switched providers from Sun Life Financial to Canada Life Assurance Company on July 1, 2023. The move affected over 1.7 million federal public servants, retirees and their dependents.

The move, however, apparently caused issues for public service workers, and the parliamentary committee was tasked to investigate the situation.

As part of the switch, Canada Life subcontracted MSH International to handle all overseas claims as of July 1, 2023, both for emergency travel medical coverage and comprehensive coverage for those posted overseas by GAC, noted CBC in a previous report.

In April, CBC reported that workers who are posted or travelling outside of Canada are being left to wait for months to be reimbursed for the money they spend to cover their medical expenses. Specifically, Global Affairs Canada (GAC) had advanced $3 million to employees to cover medical expenses, said Professional Association of Foreign Service Officers (PAFSO) president Pamela Isfeld, according to the report.

Canada Life committee’s recommendations

The committee provided nine recommendations overall. These are:

1. That the Government of Canada involve representatives of employees and retirees in the re-tendering process when the time comes to renew the “Administrative Services Only” contract for the Public Service Health Care Plan; and that efforts be made to involve people with disabilities and their caregivers in the process to ensure that their needs are understood.
2. That the Government of Canada work with the administrator of the Public Service Health Care Plan to improve communication with plan members when changes are made to coverage; and that in doing so, the government consider members’ access to the Internet and/or new information and communications technologies.
3. That the Government of Canada begin monitoring the performance of the Plan Administrator on the first day when the contract comes into force; that the transition period prior to activation include monitoring milestones to ensure that the chosen contractor is capable of providing a functional website and bilingual services, among other things; and that in the future, contracts with plan administrators do not provide a grace period to a contractor that has no or few consequences for severe underperformance.
4. That the Government of Canada provide the rationale behind the decision to transition to a new plan administrator and to modernize benefits on the same date, given that Canada Life acknowledged that this decision contributed to the issues facing the Public Service Health Care Plan since 1 July 2023.
5. That the Government of Canada ensure employees who have suffered financial loss as a result of Canada Life's unjustified delays or denials of claims are fully compensated for these losses.
6. That the Government of Canada make available to employees the service standards included in its contract with Canada Life and provide regular updates to stakeholders on both Canada Life’s adherence to those standards and any penalties levied against Canada Life for failing to meet those standards.
7. That the Government of Canada revisit its existing caps on coverage for physiotherapy services to bring them in line with previous coverage and distinguish between short and long-term needs.
8. That the Government of Canada develop separate processes for monitoring the timeliness and accuracy of a) prior authorization decision-making and appeals; and b) claims made for drugs, treatments, and devices not requiring prior authorization, in order to properly enforce the service-level standards contained in the contract.
9. That the Government of Canada ensure that the selected company has the capacity to provide services in French at all times and within the same amount of time as services provided in English.

In coming up with their report, the committee held two meetings as part of this study, receiving testimony from Canada Life, PSPC, the Treasury Board of Canada Secretariat (TBS) and the Public Service Alliance of Canada (PSAC). The committee also received three written briefs, including one from the Canadian Association of Professional Employees (CAPE). 

Also, the committee received emails from plan members, which were not detailed in the report over privacy concerns.

Unions welcome recommendations 

Two unions welcomed the committee’s recommendations, according to the CBC report.

CAPE is happy that the committee recommended that affected workers be compensated for their losses and the stress they endured. 

"We've seen once again that this race to the bottom, in finding the cheapest provider, ends up costing the public a lot more when we have to pay out damages because basic employer responsibilities can't be met," Nathan Prier, president of CAPE.

The group is also happy to see the government will be asked to explain why they changed what's covered on the same day they changed the administrator.

"This double change is right in the middle of a lot of the problems that were reported," he said. "We just can't see these kind[s] of employer abuses continue without consequences, and we're glad that the committee seems to support that."

Still, actions have to be made, said Alex Silas, PSAC national executive vice-president.

"I think the report is favourable, but now the real work is going to be Treasury Board needing to implement these changes, and finally fixing Canada Life, and putting an end to the numerous problems that workers in the federal public service."

Two-thirds (66 per cent) of working Canadians who have access to employer-provided benefits rate their overall wellbeing as good or excellent, compared to 49 per cent of those without these benefits, according to a previous report.