Subject to the policy requirements to provide timely proof of claim and to commence the claim within the relevant limitation period, if the incident or illness occurred or arose during the currency of employment, coverage will be provided and the policy must respond. – MacIvor v. Pitney Bowes, 2018 ONCA 381 at paragraph 24
These words written by Justice MacFarland for the Court of Appeal in the decision of MacIvor v. Pitney Bowes, 2018 ONCA 381 confirm an important legal right for all employees in Ontario who become disabled while employed and make a claim for long-term disability benefits even after resignation or termination of employment.
Long-term disability (“LTD”) benefits are often provided to employees through an employer-sponsored group health benefits plan. LTD benefits provide income supplement to employees if they become disabled and unable to continue working. While each specific LTD policy may be different, often such plans state that benefit coverage ends when employment ends. This raises the interesting and important question, addressed in the MacIvor case, of whether a former employee still has LTD benefit coverage for an injury or illness that occurred when they were employed despite making a claim for benefits after employment ends.
Mr. MacIvor had suffered a traumatic brain injury and severe back injury during a company event. He subsequently resigned from the company and it was not until some years later that he appreciated the permanent and disabling nature of his injuries that prevented him from working. He made a claim for LTD benefits under his former company’s policy, but was denied on the basis that he no longer had coverage because he was no longer an employee when he applied for benefits. The company argued that coverage ends when employment ends and relied on the specific language of the insurance policy.
At trial, the company’s argument was successful. However, the Court of Appeal allowed the appeal and held that coverage will exist so long as the incident or illness occurred during the currency of employment.
When interpreting insurance contracts, courts will give effect to clear, unambiguous language reading the contract as a whole. In this case, the insurance policy stated:
Your coverage will terminate on the earliest of the following dates unless continuation of coverage is provided under the Extension of Coverage provision: … the day on which you cease to be Actively Employed;
The Court of Appeal determined that the language of this insurance policy was clear and that giving effect to it meant that the policy provides coverage if the injury or illness that caused disability occurred while the individual was employed. That is, benefit coverage does not end when employment ends:
In other words, if an employee’s claim arises as the result of an occurrence that takes place during their employment, the policy provides coverage.
MacIvor is an important case because it confirms that the relevant time period in question is when a disability arises, not when the claim is made. Subject to the specific language and other terms of a policy, so long as an employee has coverage under the plan at the time of the disability, the employee has the right to make a claim and the policy must respond.
If you or someone you know is grappling with a disability insurance matter please contact one of our lawyers for a consultation. We will review your case and ensure you get the benefits you are entitled to.