Long-Term Disability: Keeping the Promise of Peace of Mind

Transcription

1 400 Coventry Road, Ottawa ON K1K 2C TTY Long-Term Disability: Keeping the Promise of Peace of Mind Conference Proceedings Presented by: November 30, 2007

2 Preface One year after Reach Canada s conference the quest for true peace of mind for persons with disabilities continues. One year after the conference, people with disabilities are still too often left with no choice but to enforce their contractual and human rights in court, despite the personal, medical and financial costs associated with legal action. What the conference made clear was that it does not need to be that way, and it does not make sense for any party involved to permit the system to stay so broken. The financial and reputational risks from litigation for employers and insurance companies are significant. Moreover, employees who trust their employer/insurance provider, who can work or recover from illness without pressure and fear are more productive, less motivated by monetary versus non monetary benefits of employment, are less likely to use sick leave, and return to work more quickly if they have been ill. The conference sought to bring together participants with varied perspectives on Long Term Disability litigation with an eye to developing networks and strategies which would facilitate a more proactive and collaborative approach to disability management and benefits. Among those who attended were persons with disabilities, doctors, family members, business people, public servants, lawyers, insurance specialists, healthcare professionals, HR specialists and public interest workers. The workshop topics represented the most current and pressing legal issues of the moment. The participants were encouraged to consider the all of the facets of these and to collaboratively generate mutually beneficial solutions, or define the areas for future collaboration where possible. We went a long way towards achieving our goals that day but we need to keep the dialogue active, and our resolve to create a fairer, more functional system intact. Our hope with these proceedings is that it will continue the dialogue amongst all the stakeholders in the LTD system to move towards repairing the system for those in need of the peace of mind to allow them to focus their energy on other areas such as rehabilitation instead of battling insurance companies with their dwindling resources. The proceedings to follow will provide a brief summary of the presentations and dialogue from each workshop. Wherever possible, case citations, and/or links to/copies of the full texts of important legal decisions have been included for your review. Again we encourage participants to keep talking, consulting and strategizing about the answers to the questions raised during discussion. A number of common threads surfaced and resurfaced throughout the day. Firstly, the need to work with and educate medical professionals about their professional obligations when drafting reports to be used in legal proceedings, the impacts on the health of their patients when these are done poorly, and about the various legal issues that they can expect to encounter when treating patients with disabilities. All parties should also work together to ensure that there is adequate access to regular and specialized medical care in all Ontario communities. All parties should work together to ensure there is adequate funding for medical treatment and research, especially with respect to invisible illnesses. 1

3 Another area that we learned through the conference that clearly deserves more study is that of access to part time work, and the potential for long term top ups to partial or full earnings through LTD benefit schemes. Employers should also invest in managerial training on the duty to accommodate, and on the creation of healthy workplaces in which disabilities will be less likely to occur, reoccur or be aggravated by ignorant and harassing behaviours. There was real frustration expressed from management side participants who felt that they were under trained to deal with disabilities in the workplace and who felt they lacked the tools, discretion and/or budget lines that would permit dignity affirming accommodations and the early, yet respectful identification of new/recurring disabilities as they arise. The need to balance privacy interests with the need for sufficient medical information to permit proper accommodation and/or to justify short and long term sick leave/pay seems to be a particularly confusing and combustible interface. Lastly, comments from participants in the conference suggest that there is clearly a role for government in designing accessible income replacement benefit schemes that affirm and are informed by Charter and human rights values. As part of such efforts, Government should take a hard look at the policy implications of providing offsets, for example through CPP, to for profit insurance companies. So, there is much to be done, but the causes of the problems have become more apparent through the efforts of REACH and the conference participants. Further, many potential tools and strategies to fix such problems were generated through our discussions, ideas which I sincerely hope will be taken up by employers, insurance companies and policy makers not for altruistic reasons, because it makes social, political and organizational sense to do so. Lori Harreman Lawyer, Jewitt McClukie Chair of Conference February

4 Table of Contents WORKSHOP A: Medical evidence and the long term disability insurance claim tips for medical and legal professionals WORKSHOP B: Recent developments in long term disability litigation WORKSHOP C: Long term disability in the federal public service WORKSHOP D: What I can t see can t hurt you : long term disability and invisible illness WORKSHOP E: Interface between Canada pension plan disability benefits and private long term disability benefits WORKSHOP F: Tax consequences associated with negotiating long term disability benefits 3

5 Workshop A: Medical Evidence and the Long Term Disability Insurance Claim Tips for Medical and Legal Professionals Panelists: Frank McNally, Legal Counsel, Forbes Singer Smith Shouldice; Dr. Ron Seatter, Psychologist, Westboro Health Professionals; and Karen Jones, Legal Counsel and Director of Criminal Law Office, Legal Aid Ontario regrets. Executive summary This workshop addressed the role and importance of the medical report in the context of litigation arising from Long Term Disability Insurance (LTDI) claims. The main issues discussed include: the importance of quality communication among patients, legal and medical professionals; the required content of medical report for lawyers; and recommendations to improve interested parties dialogue in the hopes of achieving maximum coverage for LTD clients. Frank McNally: The importance of medical reports from the Plaintiff s perspective Issues The medical report is a comprehensive description of the treatment and prognosis of the patient. It can have a significant impact on the outcome of a LTD claim because the report can be properly called the foundation for settlement. Given the evidentiary weight that a properly drafted medical report can merit, judges generally tend to give more weight to medical reports created by family physicians rather than third party reports provided by insurance companies hired guns. The reasoning for this tendency is that a physician that has a working understanding of their patient s medical history is more credible than an insurer biased physician that briefly meets the patient to diagnose his or her situation. Thus, in determining the usefulness of a medical report in preparation for a LTD claim, the plaintiff s lawyer should evaluate the patient physician rapport and infer if the doctor in question could provide an objectively favorable report. This determination may be difficult because medical professionals are not always aware of the impact that their drafted report has on the client s compensation claim. When possible, medical professionals should be advised of how to draft comments neutrally and in clear language. Conflicts between lawyers and medical professionals arise when medical reports are not produced in a timely manner. Situations where the plaintiff s counsel have to repeatedly request a report from a family doctor and only receive the said report upon the threat of a complaint create a negative relationship between the medical and legal professions. Despite the time management problems faced by both the legal and medical professions, all involved must be conscientious of the impact that unnecessary animosity has on the client/patient. When possible, there must be an effort on the part of lawyers and physicians to maintain a solid communication relationship. 4

6 The notion of access to timely medical reports was explored in Mccanly vs MacDonald... This case established that a patient is entitled to all medical information, including records prepared by physicians, as long as the release of information will not be harmful to the patient. Thus, doctors have a specific obligation to provide timely and accurate reports to third parties and to contact parties involved. Recommendations 1. Lawyers must educate medical professionals on the legal implications of medical reports. This education will cure ignorance on the part of some physicians that are not conscious that their medical report can establish the foundation for settlement. Lawyers must be aware of the distinction between a treating physician and an insurance company s hired gun. In particular, lawyers must respect that treating physicians may not be as well versed in writing medical reports, as comfortable testifying in courts, and as apt to understand legal jargon. In light of these differences, lawyers working with a treating physician should identify and explain the legal tests that have to be met using information from the medical report and subsequently follow up to see if they understand the test. 2. Lawyers must specify the content required for an adequate medical report. When preparing a physician for a trial or another legal proceeding, legal professionals should outline the nature of the claim advanced, the types of information required to assess that claim, and the pertinent timeline as per required by the Rules of Civil Procedure. When educating the physician, one should indicate the importance of detailing the status of the injury at the time of the initial consultation as well as the evolution of the diagnosis up until present time. This complete prognosis not only has implications for the patient s employability but it can also serve for the basis for the court s ultimate decision. Conclusion The accurate drafting of a medical report is of crucial importance to the success of a plaintiff s LTD claim. To ensure the integrity of this process, lawyers are encouraged to have a fruitful and continuous dialogue with medical professionals regarding the content and drafting specifications of their medical reports. Dr. Ron Seatter: The importance of medical reports from the medical professional s perspective Issues Medical professionals frequently find the adversarial legal system to be intimidating for numerous reasons, namely, because it forces them to grapple with conflicting obligations. While medical professionals must always satisfy their primary obligation to the College of Physicians to treat their patients, the personal injury legal system requires them to provide information to interested third parties. Information providers must, thus, learn to provide helpful information to interested parties without breaching their professional responsibility duties to their patient. This intimidation is often heightened upon knowledge of the financial and legal consequences attached to the production of a negligent or insufficient medical report. As an example, medical 5

7 professionals are subject to an approximately $25,000 fine and a year in jail for making a cursory report (Regulated Heath Professions Act, 1991, (RHPA, 1991) subsection 40(1)). Conclusion Communication between medical professionals, lawyers, insurers, and patients must improve so that LTDI claims may be efficiently advanced. Question & Answers During this period, there was discussion regarding: Whether physicians should advise patients not to sign consent forms if this information could be used against them by their insurance companies. As in all questions regarding a specific LTDI claim, it was recommended that patients consult a lawyer regarding how consent forms can be used to manipulate particular condition. Privacy and disclosure information on insurance company consent forms. It was determined that once the LTDI claim process has commenced, there is no guarantee of the patient s privacy. Obtaining the price of a medical report. The fee schedule for such reports is regulated by the Ontario Medical Association and is reviewed on a timely basis. How to educate the public about the LTDI system s pitfalls. There are many opportunities for interested persons to become advocates for a better understanding of the LTDI system. Since Canada is fortunate to have public interests groups, such as Reach Canada, whose mandate is to educate persons with disabilities on issues such as the LTDI process, interested persons should contact these groups. The necessity of obtaining legal advice when dealing with an LTDI claim. If one is working in a unionized environment, claimants should take advantage of the resources provided by their union. As in many matters, their union s counsel can provide them with legal information as well as assistance in filing their LTDI claim. If one is working in a nonunionized setting, private legal assistance is suggested when dealing with an LTDI claim. The importance of a medical report discussing the nature of the employee s work. While it is the patient s responsibility to inform the physician about the nature of his employment, it is also important for a physician to make an assessment of the patient s ability to return to work based on this information. The accuracy of the assessment of a patient s true ability to return to work will have serious implications on the patient s employability and the transferability of his skills. TABLE OF CONTENTS 6

8 WORKSHOP B: RECENT DEVELOPMENTS IN LONG TERM DISABILITY LITIGATION Pannelists: Denis Boivin, Professor, French Common Law, University of Ottawa; Michael Sobkin, Legal Counsel for Sunlife, Fidler v. Sunlife; and Lori Harreman, Legal Counsel, Jewitt McLuckie & Associates Executive Summary This workshop examined the question of whether punitive and aggravated damages are achieving their purpose in Long Term Disability litigation. To answer this question, the panel considered the Supreme Court of Canada s decision in Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30, [2006] 2 S.C.R. 3 [Fidler]. Facts The plaintiff worked as a bank receptionist, where she was covered by a group policy that included long term disability benefits. She became ill and was diagnosed with chronic fatigue syndrome and fibromyalgia. Consequently, in January 1991, she began receiving long term disability benefits. In May 1997, her insurer informed her that her benefits were being terminated following a video surveillance that showed inconsistencies with her claim. Two years of correspondences followed, and in 1998, the insurer confirmed its decision to terminate her benefits despite the absence of medical evidence supporting its claim that the plaintiff was fit to return to work. The plaintiff pursued the insurer. In April 2002, the insurer decided to offer to reinstate the plaintiff s benefits and to pay all arrears with interest one week before the trial. The plaintiff nonetheless pursued her claim, requesting punitive damages and aggravated damages for the insurerʹs bad faith in dealing with her file. The Fidler decision was interesting because the Supreme Court considered both aggravated and punitive damages. Aggravated damages are used to increase damages awarded to the plaintiff, whereas punitive damages are used to punish or deter behaviour. According to the Supreme Court, insurance contracts for disability benefits are considered peace of mind contracts, a breach of which can trigger compensation for mental distress. Michael Sobkin, Legal Counsel for Sunlife, Fidler v. Sunlife Issues: The first issue at trial was with respect to the entitlement to damages. The Supreme Court considered the implications stemming from a promise of a peace of mind contract. The traditional rule is that damages for distress are not recoverable in a contractual relationship. The second issue at trial was with respect to the quantum of damages recoverable. Punitive damages: The Court rejected the argument for punitive damages, as the plaintiff could not establish that bad faith on the part of the insurer existed. Ms.Fidler s abilities in the video surveillance coupled with other ambiguities demonstrated that Sunlife did not have an improper purpose. 7

9 The Supreme Court concluded that Ms. Fidler would have been entitled to punitive damages had it been shown that Sunlife had denied the benefits because of an overwhelmingly inadequate handling of the claim or had introduced improper considerations into the claims process. Since this could not be proven at trial, the plaintiff was denied punitive damages. Aggravated damages Nevertheless, the Fidler case is interesting because of the way it treated aggravated damages. The Court concluded in Fidler that a breach of a peace of mind contract could trigger mental distress that can be compensated. However the quantum of the aggravated damages awarded was far less than the award for punitive damages. Consequently, it is not a viable option for a plaintiff to pursue an insurer solely on the basis of aggravated damages or more specifically mental distress unless an accompanying argument can be made for punitive damages. However, sometimes a plaintiff may need to go to court for the purpose of getting their benefits reinstated. Given the cost of litigation and low compensation for aggravated damages, there is a need to resolve entitlement issues quickly. The Supreme Court referred to the fact that Sunlife denied benefits for five years, their message in Fidler was clear, any delay will fall on the defendant. Furthermore, the plaintiff will feel increased stress when their benefits are delayed. The lesson to insurers from the Fidler case can be summed up as follows: Insurance Companies need to make decisions first and foremost on medical evidence. In the Fidler case, the Supreme Court was troubled by the lack of medical evidence. Accordingly, Sunlife s motive in getting the video surveillance was not improper but they made their mistake in not backing it up with medical evidence. Denis Boivin, Professor, French Common Law, University of Ottawa The Fidler case took Long Term Disability litigation one step forward and three steps back. First the good news, the Supreme Court of Canada clarified the test for awarding so called ʺaggravated damagesʺ (a term the Court rejected in favour of the expression ʺdamages for mental sufferingʺ) and an insured doesn t need to prove an independent wrong to receive the damages. Thus the victory of the Fidler case is that a plaintiff does not have to prove bad faith, she only needs to prove a breach of contract and mental anguish flowing from said breach to be entitled to compensation. The bad news is with respect to the quantum of damages. The Supreme Court only awarded the plaintiff $20,000 in aggravated damages. This adds up to $10 a day for the time Ms. Fidler did not have her long term disability benefits. The Supreme Court called it compensatory damages, however Professor Boivin calls it Symbolic damages. 8

10 Consequently, it is now easier for an insured to make a case however; they should expect to get very little as a result of it. More bad news followed with respect to punitive damages. In Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595 [Whiten] the Insurer conceded bad faith so the Supreme Court did not have to deal with the standard and only discussed the quantum. By comparison, Fidler dealt with the threshold for punitive damages, and set it very high. In order to prove bad faith on the part of the insurer, the Insured must prove either an inappropriate motive for rejecting the claim or that the insurer ʺoverwhelmingly handled his or her claim inadequatelyʺ. This is a high threshold, and one may wonder the standard of ʺutmost good faithʺ associated with insurance contracts has been replaced by a standard of ʺgood faithʺ simpliciter. Professor Boivin asks whether the Supreme Court should have considered the purpose of Sunlife s behaviour when they denied benefits to the insured. The objective of punitive damages is to punish, deter and denounce. Prof. Boivin agrees that Sunlife s behaviour was not equivalent to the bad faith behaviour conceded to by Pilot Insurance in the Whiten case but is it still not a behaviour that needs deterrence? The message the Supreme Court delivered to the insurance industry with the Fidler decision is: An insurer can wrongly deny a person s long term benefits for 5 years without any medical evidence to support its position as long as they pay $10/day on the eve of the trial. In the opinion of Professor Boivin, there is now a lack of reciprocity in the standards of good faith recognised by the law of insurance: Insured s owe a duty of utmost good faith the insurance company has a right to cancel the policy should this duty not be met Insurance company s owe only a duty of good faith to the insured TABLE OF CONTENTS 9

11 WORKSHOP C: LONG TERM DISABILITY IN THE FEDERAL PUBLIC SERVICE Pannelists: Carol Willans Theberge, Co Chair, National Council of Federal Employees with Disabilities (NCFED) and Counsel, Justice Canada; Susan Carry, Human Resources professional in the Federal Public Service; Deborah Cooper, General Counsel, Association of Canadian Financial Officers; Alison Dewar, Partner, Raven, Cameron, Ballantyne & Yazbeck LLP Long-term disability (LTD) absenteeism is an important and costly problem affecting Canadian public service employers, unions, employees and their families. As an ever-growing phenomenon in the Federal Public Service, LTD causes many challenges for the parties involved, particularly around the return to work of the absentee. Despite recent Supreme Court of Canada case law such as Honda v. Keys, Canada s human rights legislation still requires the employer and the union to reasonably to facilitate an LTD employee s return to work. Thus, the parties involved have a vested interest in finding a realistic LTD solution that will assist the employee resume a dignified active life, while considering any hardship the situation imposes on the employer or the union. Susan Carry: Human Resources professional in the Federal Public Service Despite the complexity of the process for managing long term disability in the federal public service, in this workshop, a Human Resources professional briefly described how the process works, the volume of disability insurance usage and what some of the considerations are in establishing an effective disability management process. Following this procedural discussion, two lawyers who frequently deal with accommodation problems in the public service offered their candid observations and suggestions for improvement. The current context of LTD accommodations in the Federal Public Service is outlined in A Guide for Managing the Return to Work published by the Canadian Human Rights Commission in The Guide notes that absences due to disability or illness are among the most challenging human resource situations facing employers today. Indeed statistics show that costs generated by disability and income programs are steadily rising, as are productivity losses. The National Institute of Disability Management and Research estimates that at any given time, 8 to 12% of Canada s workforce is absent due to illness or injury [ ] Canada s growing rates of long term employee disability absenteeism are propelled by stress related to technology and organizational restructuring, an aging workforce, and difficulties balancing work and family responsibilities. (p.3) The following simplified description of the disability insurance process has been recreated in a flow chart for your benefit: 10

12 Simplified flow chart of Disability Insurance Employee Submit the DI forms to the responsible departmental HR office as soon as he/she has reason to believe the time off work will exceed the elimination period. The employee must provide medical reports from the doctor that address in detail the medical reasons why he/she cannot perform the functions of the job. Upon receipt of an employee s information, there is a distribution to: 1) Compensation area; 2) Insurer; and 3) PWGSC. If accepted by the insurers: On a monthly basis the departmental compensation advisor must provide the insurer with: 1) the employee s basic salary for hours or days worked allowances paid, e.g. bilingual bonus; allowances can only form part of ʺtotal earningsʺ if they are also subject to the Supplementary Death Benefit, Part II Public Service Superannuation Act pay for designated holidays (including pay in lieu for part time employees); 2) vacation leave used or cashed out; sick leave used; 3) any extra duty compensation paid, including compensatory leave granted. If not accepted by the insurers: The employee must exhaust the insurer s complaint process before going to the Disability Insurance Board of Management or the Board of Trustees for the Long Term Disability Plan. Admissibility Criteria: Elimination Period: 1) After the employee s paid leave expires; or 2) after 13 weeks of disability. One process supporting an employee s return to work is income protection. The following chart provides the current short and long term options available to injured or ill employees. 11

13 Sources of Income during Disability Total Disability Term Not Work Related Work Related Short term Sick Leave Employment Insurance (sick benefits) during leave without pay (55% of salary payable for a max of 15 weeks) Sick Leave Injury on duty leave Employment Insurance (sick benefits) during leave without pay (55% of salary payable for a max of 15 weeks) Short Term and/or Long Term DI benefits (70% of plan member s applicable salary) Your own savings and Worker s Compensation (85% of salary) Your own savings and Long Term Canada/Quebec Pension Plan Disability Benefit Public Service Pension Plan Disability Benefit Canada/Quebec Pension Plan Disability Benefit Public Service Pension Plan Disability Benefit Sick Leave: funds available to the employee are determined by his/her collective agreement and the amount of sick leave accumulated over time. Employment Insurance (EI): should the employee not have enough leave to cover the 13 week elimination period for disability insurance or long term disability he/she may qualify for EI. Worker s Compensation: the Government Employees Compensation Act provides statutory compensation coverage to employees of the Federal Government who have suffered an occupational injury or illness during the course of their employment. Benefits are paid according to the rates and conditions provided under the Worker s Compensation statute of the province where the Federal Government employee is usually employed 12

14 Canada Pension Plan (CPP) Disability Benefit: provides a monthly taxable benefit to contributors who are disabled and to their dependent children. Public Service Pension Plan Disability Benefit: offers an unreduced Public Service Pension on account of disability, thus protecting the employee from incurring a pension penalty for early retirement. Disability Insurance: Employees may apply to one of two similar plans that provide income protection for full time and part time federal public servants who are unable to work for a lengthy period of time because of a disabling illness or injury. Federal Government Disability Insurance (DI) Plan : covers core public service unionized employees, most separate employers, and several other agencies and Crown corporations. The DI plan is underwritten by Sun Life.; and Long Term Disability (LTD) Benefit Line of the Public Service Management Insurance Plan (PSMIP): covers executives and excluded/unrepresented employees of essentially the same set of federal government employers. This LTD plan is underwritten by a group of insurance companies, headed by Industrial Alliance Insurance and Financial Services Inc. Both plans provide an employee less than 65 years old with a benefit equivalent to 70% of their insured salary, which is available the later of 13 weeks with a disability or after the expiration of all sick/ injury leave. Since the LTD qualification process is generally long, claimants are urged not to wait until the elimination period is over, but rather to apply for DI benefits immediately at the onset of an employee s disability. While waiting to qualify for LTD, claimants may be eligible for employment insurance benefits and thus should contact the nearest Canada Employment Centre office as soon as possible. After an employee is qualified, the benefit paid will be reduced by other sources of income to which the employee is entitled including disability income from Canada Pension Plan or Quebec Pension Plan, the employee s personal pension plan, and workersʹ compensation. The long term disability leave is funded by Disability Insurance: where the premiums paid to the Insurer in respect of the member at the rates specified in the policy finance the Plan. The employee and the government, as the employer, share the cost of the Plan. At the present time, the employerʹs share is equal to 85% of the total premium. Premium rates applicable are those approved by the Treasury Board Secretariat (TBS) upon recommendation of the policyholder. The monthly premium for Disability Insurance (DI) is based on the memberʹs adjusted annual salary. Long term Disability: is financed in whole by premiums paid to the Insurer by, and on behalf of, members at the rates specified in the Policy. The government, as the employer, contributes 85% of the premiums while the employeeʹs share is 15% of the total premiums, for Long term Disability Insurance. The Treasury Board also assumes the cost of providing certain employees (EX and other designated groups) with coverage under the Basic Life Insurance, Accidental Death and Dismemberment Insurance, Dependantsʹ Insurance and Long term disability portions of the Plan. 13

15 The administration of the Federal Public Service s income protection system has many players, namely the National Joint Council, the Federal Government, and the Insurer. The following chart details the roles and responsibilities of the various organizations involved in this process. Management of Insurance Benefits Program (IBP) in the Federal Public Service Who is What is the responsibility responsible National A Board of Management for the DI Plan for represented employees has been Joint established under the auspices of the NJC. The board is composed of a chairperson Council appointed by the NJC, four employer side members, and four bargaining agent side members. The Board is responsible for considering and making recommendations to the NJC on matters such as the financial integrity of the Plan, eligibility rules, Plan design and premium rates. In turn the NJC makes recommendations to the Treasury Board. Federal Government The Board has also assumed the responsibility for making recommendations to the Insurer on disputed claims and membership situations under the Plan. Treasury Board Has overall responsibility for establishing and modifying the (TB)/ Treasury Insurance Benefits program and for the development of policy for Board each program, as well as its management and control; setting Secretariat (TBS) terms and conditions relating to eligibility, premiums, contributions, benefits, and the IBP design. Each of the group insurance plans has a principal administrator or insurer. In the case of the LTD program for unrepresented employees, Treasury Board appoints government officials to the Board of Trustees. The Board of Trustees with the support of Treasury Board may enter into agreements to amend, modify or terminate the contract of insurance with the insurer and to review the financial operations of the plan. 14

16 Public Works and Government Services Canada (PWGSC) Compensation Services Directorate Coordinates the implementation of new or amended insurance policy; Develops administrative policies; Develops and maintaining the Insurance Administration Manual; Develops training media on the Insurance Plans; and Provides advisory services on general questions in policy interpretation and application The Insurance Section of the Superannuation, Pension Transition and Client Services Sector: conducts a post audit of application cards and claims for benefits for accuracy and to ensure that the Personnel Offices have applied the current directives and procedures correctly; liaises between the Insurer and the Personnel Offices in the application and claim actions, and in providing information and documentation to the Personnel Offices and/or the Insurer; maintains files of application cards, approval memoranda from the Insurer and the Monthly List of Approved and Terminated Disability Insurance Claims; co coordinates the activities and responsibilities of departments and agencies; and provides advisory and information service to Personnel Offices, members, etc. Health Canada Workplace Health and Public Safety Programme will perform a Fitness to Work Evaluation (also known as an Occupational Health Assessment) at the request of management in the following situations: When the existing work conditions have been significantly altered; When an employee develops health problems that may be aggravated by existing work conditions; When health reasons are identified as the cause of failing job performance and a medical review has been suggested (job not yet at risk) or required (job at risk) by the employer; When an employee remains absent from work for a prolonged period and must be reassessed to update disability status; When an employee is returning to work after recovery from a serious illness or injury and the person s capability of performing the original job is not known; When an employee has returned to work at a modified job and is still undergoing therapy, rehabilitation or both. 15

17 Insurer Sun Life for represented employees evaluates evidence submitted in support of claims, administers the payment of benefits on claims and evaluates evidence of insurability pertaining to application for membership. Sun Life advises the individual, in writing, whether or not the claim has been approved. At the same time, Sun Life sends copies advising the Superannuation, Pension Transition and Client Services Sector and the personnel office of the outcome. Group of insurance Companies, headed by Industrial Alliance Insurance and Financial Services Inc. (for unrepresented employees) the Administratorʹs main responsibilities are to pay the benefits on claims (all plans) and to evaluate insurability pertaining to applications for coverage. The Insurer the evaluates Statements of Health, adjudicates claims for benefits, receives and invests premiums, reports on the financial and underwriting experience of the Plan to the Board of Trustees, and responds to matters raised by the Trustees. Rehabilitation The Rehabilitation Unit will decide if the vocational training or period of work for the purpose of rehabilitation can be approved as a Rehabilitation Program. If approved, the compensation advisor must, on a monthly basis, provide the Insurer with the amount of the employeeʹs gross monthly earnings. Rehabilitation Also provides Rehabilitation Services. No details have been provided. It should be noted that within the responsibilities allocated by the Federal government, the effective administration of disability insurance essentially falls on the shoulders of deputy heads. In fact, human resource specialists, such as Ms. Carry, have found that a deputy head s avid participation forms an integral part of the proper functioning of the disability insurance program. The link between efficient programs and deputy heads is through their responsibility for ensuring that adequate training and resources are provided for compensation advisors, managers, and employees. Since the training and resource guidelines for disability insurance are at the discretion of the deputy head, there exists a stark variance in the administration of disability services within the public service. Since its inception, the Disability Insurance Plan administered by SunLife and Long term disability leave have experienced a steady increase in usage from public servants. In 2006 the Disability Insurance Plan administered by SunLife delivered $323 million in support to affected employees. In 2005 the amount delivered was $213 million. 16

18 The number of members on claim continues to increase. In 2006 of 2908 notified claims 2,547 claims were approved. Mental Health conditions (46%) accounted for a significant portion of the claims. Psychological conditions including depression and anxiety remain the major cause of disability for new claims as they have in the last 15 years. Since its inception the plan has paid $650 million in cash benefits. The latest LTD Total expenditures for 2005 is $55.4 million. An effective Disability Management Processes in the Federal Public Service should provide the following: An early identification system alerting managers to the needs of employees in crisis; A user friendly and cost effective system delivering income protection for injured and ill employees; Programs and services supporting employees returning to work; Programs and services supporting wellness to prevent injury or illness Training for managers and service providers on disability management; A monitoring and evaluation process determining the process s employee usage rates and overall efficiency. For more informationfrom the sources used to create this section of the document, please visit the following links: A Guide for Managing the Return to Work, Canadian Human Rights Commission, 2007, ccdp.ca/pdf/gmrw_ggrt_en.pdf : a great tool for informing Manager and Employees about the rights and obligations associated with returning to work Human Rights and the Return to Work: The State of the Issue, Canadian Human Rights Commission, 2006, ccdp.ca/pdf/returntowork_en.pdf: offers an overview of the steps involved in returning an LTD Employee to work. Disability Insurance, A handful of tips for Alliance members, 2003, e.pdf : an Employee focused tool that educates Union members on the Disability Insurance Plan. : Insurance Administration Manual pwgsc.gc.ca/remuneration compensation/ara iam/ara iam menu03 eng.html Sick Leave and Long Term Disability Insurance Policies and Publications sct.gc.ca/pubs_pol/hrpubs/tb_865/siglist_e.asp National Joint Council: Disability Insurance Plan cnm.gc.ca/doc.php?did=67&lang=shane Deborah Cooper: Legal Counsel with the Association of Canadian Financial Officers (ACFO) In house federal public service union counsel face particular challenges with LTD. Since they are often the first legal point of contact for union representatives trying to coach a member through the LTD process, they are forced to grapple with the seemingly chaotic maze of accommodation requirements. 17

19 The most common problems facings in house union counsel stem from the federal government s strong duty to accommodate. In many workgroups, there appears to be difficulty in correctly identifying situations that warrant long term disability attention since managers often misconstrue LTD with performance problems. Although LTD does affect the performance of an employee, the perceived lack in effort is often simply a manifestation of an employee s condition. In fact, union lawyers have discovered that when properly accommodated, LTD employees are often able to return to work and remain productive members of the workgroup. In house union counsel, such as the ACFO, continuously educate their member on the legal repercussions to employer action by publishing information directives (accessible on websites, mail outs), by providing individual legal advice, and by representing members through the grievance process. In working with LTD files, in house legal counsel have collectively noticed a general lack of adequate managerial training on LTD sensitivity. Counsels understand that it is unfair to hold managers entirely responsible for errors in LTD accommodations, however, it is the employer s responsibility to properly inform itself on the limits of its disciplinary powers. It is believed that many employee s rapid ascent through managerial ranks, an increase in budgetary constraints, and a pending exodus of experienced managers from the public service has discouraged new managers from adequately understanding of the value of human resources policies and practices. Despite the lack in experience, efforts must be made to sensitize new and experienced managers to the breadth and depth of LTD issues in their workgroup. In an effort to improve the workplace experience of federal public servants, the National Joint Council (NJC) was created. It formally joins employers and bargaining agents in taking ownership of labour relations issues and encourages them to develop collaborative solutions to workplace problems. Employers and bargaining agents have agreed that the NJC is an appropriate forum to share information, consult on workplace policies, and to collaborate on directives which provide public service wide benefits. Alison Dewar: Partner with Raven, Cameron, Ballantyne & Yazbeck LLP While tensions do exist between management, unions, and employees who are entitled to LTD benefits, the Public Service employment relationship remains one of the better managed relationships in Canada. Many reasons exist for this relatively positive relationship, namely the presence of strong Unions, the size of the federal public service that provides a number of different opportunities for meaningful accommodating employees, and the economic resources available to the employer. This being said, LTD accommodation problems still exist and these often require advocacy from legal counsel to remedy the situation and provide the employee with his/her benefits and proper accommodations. Private union side legal counsel dealing with the federal public service, must address a systemic problem of LTD. This problem appears to stem from poor management sensitivity training because despite current training efforts, invisible illnesses remain largely perceived as stress related conditions. Too often a manager incorrectly attributes an employee s performance 18

20 problems to a disinterest in the work. Proof of this disconnect is the relatively recent application of the Treasury Board s two year rule that permitted the medical retirement of LTD employees. Surprisingly, this rule had been considered acceptable until the Sketchley decision. This decision provided that the TB policy two year rule only applies if is the medical evidence is clear that the employee disability is such that they will be unable to return to work. Therefore knowing the exact prognosis and the condition s limitations is very important. In light of the systemic problems in the federal public service, there should be an increase in the amount of advocates available to union members to help them through the difficult LTD process. TABLE OF CONTENTS 19

21 WORKSHOP D: WHAT I CAN T SEE CAN T HURT YOU : LONG TERM DISABILITY AND INVISIBLE ILLNESS Panelists: Dr. Linda Robinson, M.D., Anesthesiologist; Ingrid Neufeld, Occupational Therapist, CBI Institute; David Jewitt, partner, Jewitt McLuckie & Associates. There exist unique challenges faced by individuals with invisible illnesses as they attempt to access their Long Term Disability (LTD) benefits. Widespread assumptions about how disabilities should be diagnosed and treated make it especially difficult for people with invisible illnesses to receive LTD benefits and to return to work. Participants in this workshop affirmed that invisible illnesses cover a broad spectrum. Some examples included: fibromyalgia, chronic fatigue syndrome, post traumatic stress syndrome, anxiety, depression, and schizophrenia. While these illnesses are unquestionably real in their effects, they are not readily measurable by objective medical criteria. They typically require a degree of subjective evaluation by both the individual and their physician. Rehabilitation challenges for people with invisible disabilities include: 1. The person has to prove they are sick to access benefits and treatment, often without the tools or resources to do so. The process itself can be traumatic or re traumatizing many have had benefits terminated and had to fight for reinstatement. Meanwhile, they may be dealing with stigma from workplace, friends and family. 2. Access to treatment is often delayed until close to the 2 year mark, and then only if the prognosis for return to work is good. OHIP funded treatment for mental health and chronic physical illnesses is limited so they may have been without treatment to that point, maybe just seen by their Family Physician. By the time they can access treatment, they have lost routine, decreased self esteem, disenchanted, have lost trust in the system that is to support them. So the road back up is tougher than it needs to be. 3. Need for more flexibility in the rehabilitation and RTW process. Fear for clients of losing benefits if seen as non compliant. But recovery is not always linear in fact, we predict ups and downs. Essential to have continued rehabilitation through the process of integrating back to work. Would be helpful to be able to continue after the person is fully back to work, but the file is usually closed at that point. Would potentially reduce the possibility of relapse. The rehabilitation providers often feel caught between the needs of the client and the expectation of the sponsor. A general consensus was struck by the panel that more flexibility in the rehabilitation process was needed, that intervention must be available sooner, and that accessibility over socioeconomic lines must be increased. TABLE OF CONTENTS 20

22 Workshop E: Interface between Canada Pension Plan Disability Benefits and Private Long Term Disability Benefits Panelists: Nancy Lawand, Director General, Canada Pension Plan Disability Directorate, Human Resources and Social Development Canada; Sue Lott, Counsel, Jewitt McLuckie & Associates, expert witness in Ruffolo v. Sunlife This workshop provided a cursory introduction and overview of the interaction between the Canada Pension Plan (CPP) Disability Benfits and private long term disability (LTD) insurance. The constitutional anchors for the two benefit systems are different. The Canada Pension Plan is a national social insurance program administered by federal government, while private LTD insurance contracts are regulated by the provinces. The Federal Government cannot unilaterally legislate or interfere with the manner in which private insurance operates. The main issue discussed in this workshop was whether there should be an integration of disability funding programs or whether such integration would only benefit the private insurer while impoverishing the disability benefit recipients. Ruffolo v. Sun Life Assurance Company of Canada, 2007 CanLII (ON S.C.) is a recent case that examined this issue in light of the CPP Disability children s benefit, payable to children of CPPD recipients. This case, heard at the Ontario Superior Court, concerned the legality of a deduction of the CPP child benefit from a private LTD benefit. The claimant, Mr. Ruffolo, was challenging the legality of such a deduction. Mr. Ruffolo lost in a judgment released on November 21 st, In Ruffolo, the plaintiffs were challenging the legality of a CPP child benefit deduction from their monthly LTD benefits. They claimed a reimbursement for all the CPP child benefits deducted from their disability benefits since 1992, arguing that their LTD policies did not authorize Sun Life to deduct their children s CPP benefits, based on the argument that.the CPP child benefit is not income of the CPPD recipient, Mr. Ruffolo, but a benefit intended for and payable to the children of a CPP Disability Benefit recipient. It has been common practice for insurers in Canada to offset CPP disability benefits from the LTD benefits, but the issue in this case was the legality of the deduction of the child s benefit. They claimed damages for breach of contract and for punitive damages. The judge interpreted the LTD policy in favour of Sun Life and found that the practice of offsetting the LTD benefits by the CPP benefits was not illegal or unconscionable. It is argued that the Canada Pension Plan s disability benefits fall into another category of insurance, social insurance, which bears similarities and differences from private insurance. It shares with private insurance the pooling of risks and the payment of benefits from a fund financed by contributors. However, it differs in that the CPP is compulsory and its contributors consist of employers and employees alike. Furthermore, the CPP does not charge higher premiums to riskier employees and does not exclude contributors based on personal and past information. Introduced in 1966, the purpose of the CPP disability benefits was to confer added protection by providing replacement income to contributors with long-term disabilities. Parliament enacted the 21