Following public outcry, financial penalties are initiated against Canada Life to address unresolved medical claims and service delays
The federal government has initiated financial sanctions against Canada Life following significant public complaints from public servants, retirees, and their families about unmet medical claims, as reported by CBC.
Public Services and Procurement Canada (PSPC) spokesperson Michèle LaRose stated that PSPC is “taking steps to address startup delays faced by Canada Life and has begun to apply financial consequence mechanisms under the contract.”
On July 1, 2023, the responsibility for the public service health insurance plan was transferred from Sun Life to Canada Life.
This switch led to numerous issues, with federal public servants struggling to secure benefits, as CBC reported complaints about long waits, inability to contact agents, and unexplained claim denials.
During a six-month transitional period, as outlined in tendering documents for the $514m contract, the government prioritized working with Canada Life to enhance service quality before imposing any financial penalties.
However, the Professional Institute of the Public Service of Canada (PIPSC) spokesperson Stéphanie Montreuil expressed hope that the sanctions would prompt necessary changes, acknowledging them as merely a preliminary step toward addressing the broader issues.
Canada Life claims to have resolved the early challenges related to the transition, asserting that it now meets expected service levels by answering calls within 30 seconds and processing electronic claims within a day on average.
Pamela Isfeld, president of the Professional Association of Foreign Service Officers (PAPSO), voiced her frustration with the ongoing delays in coverage, especially outside Canada.
She welcomed the sanctions but highlighted that the government still needs to address the underlying problems, particularly in locations like the US, where issues are most severe.
MSH International, a subcontractor, handles the international component of the plan, but PSPC maintains that Canada Life bears the ultimate responsibility.
Isfeld also noted significant delays and discrepancies in claim processing for members and their families abroad. One notable case involved Sonia Rioux, who faced severe difficulties obtaining reimbursement for emergency medical costs incurred in Australia.
After starting her claim in August, it took until mid-April to receive a partial refund, with no explanation for the discrepancies.
In response to these challenges, PAFSO is exploring all legal options, including the possibility of enforcing a temporary system allowing private insurance coverage.
PSAC has also filed a grievance, claiming that the switch to a new provider violates the collective agreement by not maintaining a functional health insurance system.
The Treasury Board, through spokesperson Joie Huynh, affirmed ongoing efforts with Canada Life to ensure compliance with the contract. Measures to improve service have been noted since November, and Canada Life is reportedly collaborating with MSH International to enhance international coverage.
MSH International's program delivery director, Jina Park, stated that the company has doubled its claims processing capacity and is taking steps to reduce wait times and prioritize urgent cases, aiming to meet the unexpectedly high demand.
