If you’re a broker that specializes in employee benefits and wants to protect your clients (and their employees), I suggest you read the info below.
We also think it prudent that you ask your partners how they would handle a claim like this in advance, rather than waiting for a denial to find out.
We have asked the CLHIA to establish a guideline so that no one is denied an LTD benefit due to exercising their option to opt out of coverage during maternity leave. This can currently occur with several insurance companies, creating a liability for the insurer, advisor, employer and the employee. We just don’t think this discrepancy between insurers is acceptable and hope a standard guideline will be established BEFORE any more claims are declined.
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.
Some provided simple answers and others were more detailed, but in general the responses were…
BBD (Empire) - A Cooperators - A Desjardins - A Empire - A - (if forms are not completed D) Encon (SSQ) - A Equitable - B (11/20/19 will be updating contract wording shortly) GWL/Canada Life - A Manulife - D Medavie Blue Cross - A RBC - B (11/12/19 revised answer from D as long as within 31 days of RTW) RWAM (La Capitale) - A SSQ - A (Allows partner TPA’s to decide) Sun - A If your providers response is not here, please share their response. If you are a provider and feel your information is incorrect, let us know.
We questioned Sun Life on their reversal of response (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. “
One might challenge the other insurers to reconsider their positions and support a CLHIA guideline on the issue to protect the consumer, the employer, the advisor and the insurer from declined claims and bad press.
Imagine a scenario where a woman was treated for mild to moderate depression after childbirth (postpartum depression) that lasted the duration of her leave. She hopes the structure, coworkers and rhythm of a return to work and will help improve the situation. Upon her return to work (after her maternity leave has ended), the symptoms increase and she is unable to carry out the duties of her position. She applies for LTD benefits, only to be declined due to a pre-existing condition by the carriers that answered B or D.
We have the responses on file from these insurers in the event you ever find yourself in litigation over a declined LTD claim. That said, many insurers responses have changed depending on whom we have asked, and over the past 2 years.
We think it prudent that you ask your partners how they would handle a claim like this in advance, rather than waiting until after a claim denial to find out. Better yet, don’t allow your clients employees to opt out on leave.