Maternity Leave Risk Project

The issue:

When a women went off on Maternity Leave and chose NOT to make her contributions to the cost of the plan, so was dropped from benefits (as is allowed by the ESA), several insurers (about 1/3) would re-set the LTD pre-ex clause upon her return.  In essence, she would be returning to a lesser benefit then when she left on the legislated leave. This has occurred with several insurance companies, creating a liability for the insurer, advisor, employer and of course the employee. 

We didn’t think this discrepancy between insurers was acceptable (after all, many were already in alignment) and asked the CLHIA to correct it and establish an industry guideline BEFORE any more claims are declined.  In almost three years they have been unable to get consensus amongst their members, BUT I am pleased that we have obtained agreement with the majority of carriers (see below).  Some were already doing it right, others have changed their position.  We applaud them all.

Ideally, we still need a CLHIA guideline to apply industry wide in order to maintain this alignment, and hold this better standard. Unfortunately CLHIA has responded…  “At this time, we are unable to commit to creating an industry Guideline on this matter.”

Take a minute to drop a note to Stephen Frank, President and CEO of CLHIA at and let him know if you think this is an important initiative for the CLHIA to support. I think it is.

I’ve done a quick video on if you’d like to watch HERE

Benefits Canada has now picked up the story HERE

We now have almost 88% of in the industry in alignment

with another 4% pending change). I’d call that a win.

We posed the following question to insurers…

If a woman goes on Maternity leave and chooses NOT to make their contributions to the benefit cost, the employer is not obligated to keep them covered.   As a result, the employee is opting to drop coverage until they return from leave. Upon returning (e.g. after 12 months), the employe is then re-enrolled in the benefit plan.  

What happens to their LTD coverage? 

We provided 4 options, and asked them to choose how they would adjudicate a claim

A.  The employee is re-enrolled the day they return to work after the maternity leave ends.  Benefits begin immediately, and there IS NO RESET of the LTD pre-existing condition clause.

B.  The employee is re-enrolled the day they return to work after the maternity leave ends.  Benefits begin immediately and there IS A RESET of the LTD pre-existing condition clause.

C.  The employee is re-enrolled the day they return to work after the maternity leave ends.  Benefits begin after a 3 month wait, and there IS NO RESET of the LTD pre-existing condition clause.

D.  The employee is re-enrolled the day they return to work after the maternity leave ends.  Benefits begin after a 3 month wait, and there IS A RESET of the LTD pre-existing condition clause.

The responses were originally split with about ? of the industry leaving women at risk, and 2/3 keeping them whole. The most up to date responses are …

Alberta Blue Cross - A
BBD (Empire) - A
Camden - A (follows their market partners)
The Chamber Plan - A
Chubb - (info pending)
Cooperators - A                     
Desjardins - A
Empire - A  (need to complete an opt-out form before going on leave)                     
Encon (SSQ) - A
Equitable -  A (1/20/20 booklets and contracts being updated Mar. 1, 2020)                 
Fenchurch - A
Industrial Alliance  - A
Group Health - (A or B - info pending)
GWL/Canada Life - A
Lloyds - A
Manulife - A  (12/11/19 practice updated to A and training/communication to follow)         
Medavie Blue Cross - A  
Pacific Blue Cross -  (info pending)    
RBC - A (12/13/19 practice updated to A )
RWAM (La Capitale) - A     
SSQ - A       
Sun - A
If your providers' response is not included, please share their response. Last updated 1/15/20

We questioned Sun Life on their reversal (from 2017) and were VERY pleased with their response…

“This was an administrative practice that was put in place late in 2018 as in a number of Provinces Employment Standards Legislation requires that when an employee returns to work from a statutory leave, such as maternity/paternity leave, that their earnings and benefits are in the same position as they were at the start of the statutory leave.”

Manulife has also updated their practices to come into industry alignment…

“I am pleased to say that our business practices align with “Answer A” below.”… about two months ago our disability organization made the push to update our practice to the one I have called out.  We now have UW approval and will be rolling out a communication / training to our internal service teams and sales people shortly.”

RBC Insurance has also just updated their policy…

“RBCI has altered the pre-x policy pertaining to insureds returning from a statutory LOA (ie. Maternity Leave). 

We will no longer require an employee who is returning from a statutory leave who did not elect to keep the coverage during the leave to re-satisfy the pre-existing conditions period when they return to active employment.  

Effective immediately, when an employee returns from a statutory leave and they elected not to keep the coverage in force during the leave, we will credit their previous active employment towards satisfying the original pre-ex.  In other words a new pre-ex period will not apply and we will only apply the pre-ex to the extent (if any) that they did not already satisfy the pre-ex.”

Equitable Life is also now updating their policy…

“I’m writing to confirm that Equitable Life is updating its practice for plan members who are returning from maternity leave.  Effective March 1, 2020, our contract and plan member booklet wording will be changed – a new LTD pre-existing condition period will no longer apply when an employee re-enrols in the benefits plan after their maternity leave ends. This will align us with Option A outlined in the survey posted on your website.”

We applaud the many insurers for taking the time to work with us in resolving this situation.  Initiatives like this help bring the industry together rather than creating new reasons to be divisive.

We look forward to working together on other initiatives in the near future.

We will retain the responses from these insurers on file in the event you ever find yourself in litigation over a declined LTD claim.  Please do not hesitate to ask for our support.

Until an industry guideline is established, we think it prudent that you confirm how your insurer partners would handle a claim like this in advance, rather than waiting for a denial.

              Better yet, don’t allow employees to opt out of coverage when on Mat. leave.

Benefits Canada has now picked up the story HERE

                              We now have almost 88% of in the industry in alignment                                   

(with another 4% pending change). I’d call that a win.

This project was an initiative of Dave Patriarche, the founder of CGIB. CGIB is an association dedicated to advisor education and not an advocacy group. The results posted here are for general public reference only and should not be construed as a CGIB initiative, or that it has been supported by CGIB members in any way..