National Short-Term Disability Insurance
Most working people wear their attendance record on their sleeves like a badge of honour. Unless they are suffering from a severe illness or injury, most Canadians bite their lip, take a pill and push on with their day. Although, to observe the treatment meted out by the disability insurance industry and the employers who provide low-cost, short-term employee income protection programs, you would think we are a nation of indolent fakers and hypochondriacs waiting for every opportunity to stay home, drink beer and watch re-runs of The Price is Right.
A Rock and a Hard Place
Short-term group disability insurance companies usually operate at arm’s-length from employers — not to respect medical privacy, but because health-care administrators like to shield themselves from liability. The dirty secret is that employers are actually paying the short-term income replacement benefits, so in the end, you can logically assume who calls the shots. To protect their “customer,” the standard operating procedure is to delay, frustrate and eventually wait out all but the most seriously debilitated claimants until they quit or return to work out of financial necessity.
Even worse, some human resource personnel often refer to returning employees who are compelled to return before they are medically ready as “damaged goods.” They’re not productive through no fault of their own — it’s hard to concentrate when you’re taking prescription pain killers. Not surprisingly, after a short grace period, the performance warnings begin to fly. Even the courts have begun to discern a symbiotic relationship between the activities of some employers’ HR/rehabilitation departments and the insurance health-service administrators they engage to weed out claims.
Like any lawyer practising in the employment area, I find the trends in short-term disability (STD) management in the last 10 years to be infuriating. At least 40 per cent of all wrongful dismissal cases have some disability component. We have all had our fair share of horror stories:
- a 36-year-old production supervisor with an excellent work record is lying in his hospital bed suffering with lupus after six months of delay in approving his claim. Meanwhile, back in the office, job performance warnings are accumulating on his empty desk;
- a woman with breast cancer returned to work three months early from her chemotherapy for financial reasons after her initial claim was rejected, only to be told the next day she would be the only person “restructured” in a large prosperous company;
- a senior employee of a major bank, home on medical stress leave, has her benefits cut off after six weeks because her physician reported a positive response to treatment. The woman was still being called almost every day by the occupational health nurse asking when she would return to the team that needed her;
- a young mother experiencing complications from her pregnancy has her U.S.-based multinational employer cut her off from their disability program citing an unwritten policy that she was not allowed to become pregnant while on disability.
These situations are not fictional and are hardly atypical.
In her 2012 memoir, Out of the Blue, former Globe and Mail reporter Jan Wong recounts her experiences with the unique hell that awaits many employees in dealing with disability insurance administrators. Reading her book, one concludes that kicking loyal employees when they’re down is not only immoral, it’s established operating procedure. Her message is that it isn’t good for business and it’s certainly inconsistent with the way we treat sick people in this country.
Income protection for working people has somehow devolved into a form of American-style health-care management, where profit-motivated employers and insurers are left as the ultimate caretakers and arbiters of who receives benefits and who gets left on the street. This creates a vicious circle where hard-working people are held in a perpetual phantom zone — rejected by the insurer and unable to return to work as a result of their medical condition, yet being threatened to return to work because they didn’t qualify for short-term disability.
The courts have tried to balance the interests of the corporations and their vulnerable employees, but with limited success. You can sue your employer for obstructing your insurance coverage and claims, but you can’t hold their medical insurance administrator liable for wrongly adjudicating your claim since they are merely proffering advice. What is lost in this analysis is that STD insurers have a hidden agenda: if they accept claims on a short-term basis for medical reasons, they are also committing to continued coverage under more traditional long-term disability (LTD) plans, where the dollars come out of their own coffers.
Without a neutral publicly run short-term disability program in place, they are doing little more than creating a deterrent for the worst employers. Eventually, claimants hire lawyers and the proverbial “fur” starts to fly. If a claimant is legitimately ill according to their physician’s report, the claim gets settled one way or another and the employer throws good money after bad. This is no more effective than putting a finger in the proverbial dike.
The result is that more people are forced onto Employment Insurance (EI), Canada Pension Plan (CPP), disability and even welfare. This is analogous to the American health-care system where sick people without proper medical insurance are dumped at state-run emergency wards because they have nowhere else to turn.
The Need to Address a Growing Problem
Wait a minute — hasn’t that model been rejected by our society since the days of Tommy Douglas and the advent of Canada-wide Medicare?
We actually have plenty of experience with government-run, no-fault insurance institutions, such as the Insurance Corporation of British Columbia (ICBC). Yet, in this age of high taxation, many Canadians would reject the notion of another large government bureaucracy being created to address the needs of this burgeoning problem.
There is light at the end of the tunnel. We already have a well-running and somewhat progressive program in place. This is the scarcely known EI sickness benefits program. It provides 15 weeks of EI benefits based on a qualified physician’s certification that the employee is sick or injured and unable to return to work.
For a government program, it’s relatively simple and fair. Surprisingly, the process is unfettered by constant delay and incessant demands for medical information, which is characteristic of private, employer-sponsored STD programs.
The Practical Solution – Employment Insurance is Already in Place
To be effective and comparable with private models, a national STD program would have to be expanded to 26 weeks and provide up to 70 per cent of basic income. To be eligible, the claimants would have to prvide medical evidence that they are unable to perform 60 per cent or less of their ordinary job fuinctions. This is the test that most insurance companies already apply.
Physicians would receive a stipend for the standardized medical letters they are now asked to provide for free under the EI program. In return, they would certify that their opinions were accurate to the best standards of their profession and medical science, and free of influence by either the employer or the employee. General practitioners would do the heavy lifting as opposed to burdening specialists, as is now the case. Medical privacy would be further maintained because employers would be left out of the process, as they currently are under the EI plan. All the present rules regarding eligibility and fraudulent misrepresentation of claims would simply be left in place, as would the appeal procedures that keep the system balanced.
Security, Dignity and Respect
Socially conscious employers would welcome inexpensive access to universal coverage for their deserving employees. The other kind would be prevented from interfering in the adjudication of claims. Businesses should save money since group claim history would be irrelevant. After all, employers could still maintain their private LTD programs or top up benefits as is presently permitted under the EI plan.
In a stunning example of government “efficiency,” most of the current Ei claims re handled by an online reporting system which would only need to be upgraded. Funding for a national STD plan could be accomplished through the EI program, which seems to generate a surplus every year without a substantial increase in staffing. If needed, employers/employees could be mandated to pay into the system through a small increase in the insurance levy. Unlike private plans, there would be no exclusion for pre-existing conditions.
The existing laws that help ensure workplace accommodation and a return to comparable work would be left in place to guard against less-than-scrupulous employers, who may be reluctant to return employees to their pre-illness positions and pay. Once again, the legal and administrative system is already in place, much like the workers compensation programs in place in every province. This one, however, would be largely self-administered and self-funded.
There’s been much debate over how to spend the EI surplus money for a grand social purpose that would benefit society. The dividend would be more effective rehabilitation since ill employees would have peace of mind about their employment circumstances, encouraging an early-but-effective return to work and that could result in fewer costs to the medical and legal systems.
Most of all, as with Medicare, we could take additional pride in assisting fellow Canadians avoid financial stress by ensuring they can be away from work for legitimate illness leave with security, dignity and self-respect.
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