Government hits Canada Life with financial sanctions

The federal government has begun imposing finan‐ cial sanctions on Canada Life after months of outcry from public servants, re‐ tirees and their families who were left fighting for medical claims to be cov‐ ered.

Public Services and Pro‐ curement Canada (PSPC) said it "is taking steps to address startup delays faced by Cana‐ da Life and has begun to ap‐ ply financial consequence mechanisms under the con‐ tract," according to a state‐ ment from spokesperson Michèle LaRose.

She said PSPC is not yet in a position to share details about the nature of the sanc‐ tions.

On July 1, 2023, the feder‐ al government transferred responsibility for the public service health insurance plan from Sun Life to Canada Life.

The company had a sixmonth transitional period be‐ fore the government could begin assessing the level of service, according to tender‐ ing documents for the $514million contract.

For months, the federal government has repeatedly stated that it's prioritizing collaboration with Canada Life to improve service, be‐ fore resorting to financial penalties or withholding pay‐ ments.

During that time, CBC News heard from several members of the Public Ser‐ vice Health Care Plan (PSHCP) complaining of long waits, failing to get through to an agent and claims de‐ nied without explanation.

A spokesperson for the Professional Institute of the Public Service of Canada (PIP‐ SC) said she hopes the sanc‐ tions will serve as a warning to motivate change, but said they're only a first stab at fix‐ ing what's wrong.

"These sanctions really are only to acknowledge the fact that Canada Life is not respecting its contract," said Stéphanie Montreuil.

"It is not compensating our members. It is not ensur‐ ing that there's a plan in place so that this does not continue to happen, so it re‐ ally just is a start - and the bare minimum at that."

Canada Life says early challenges 'resolved'

A Canada Life spokesperson said on Wednesday that early challenges related to the transition "have been re‐ solved."

"Canada Life is delivering benefits under this plan in Canada within expected ser‐ vice levels, including answer‐ ing calls within 30 seconds and processing electronic claims within 1 day on aver‐ age," the spokesperson wrote in an email.

The president of the Pro‐ fessional Association of For‐ eign Service Officers (PAPSO) said her members are frus‐ trated and angry about de‐ lays in coverage outside Canada.

Pamela Isfeld welcomed the news of sanctions as "a positive step," but said the government is still responsi‐ ble for actually fixing the un‐ derlying problem.

"As a taxpayer, I'm happy to learn that they are not going to continue to just keep paying this very lucra‐ tive contract, even when they're not receiving the ser‐ vice," she said.

"But as the representative of 2,000 foreign service offi‐ cers here in Canada, we still have the same problem with the lack of an adequate health insurance plan, espe‐ cially abroad and especially in the U.S. where the prob‐ lems are the worst," Isfeld added.

"That still needs to be fix‐ ed."

Subcontractor MSH Inter‐ national handles the interna‐ tional side of the plan, includ‐ ing emergency travel cover‐ age and comprehensive cov‐ erage.

As far as PSPC is con‐ cerned, though, the ultimate responsibility still rests with Canada Life.

"As the contractor for this project, Canada Life is re‐ sponsible for ensuring that all deliverables set out in the contract are met, including work that is subcontracted out to other companies," LaRose said.

Struggle to get claims covered abroad

Isfeld said delays in process‐ ing member claims and those of family members are "enormous."

"In some cases, it's a question of large sums of money, and when the refund comes, there's just some amount in their bank ac‐ count. It doesn't match the amount claimed and there's no explanation," she said in French.

That's what happened to Sonia Rioux, who lives in Eu‐ rope with her military spouse. She was waiting for a refund for medical costs from a trip to Australia in July.

The couple was in a re‐ mote region preparing for a hiking excursion when Rioux began suffering abdominal pain. It was getting worse and worse, so she went to a clinic where nurses decided to send her to the closest hospital by air for an emer‐ gency operation.

She estimates the total cost at more than $8,000. It was the end of her trip - but only the beginning of her struggles with MSH Interna‐ tional.

Rioux said she began her claim with MSH International at the end of August. In midApril, she received a refund of about $2,000, without any clarity on which bill was being covered.

Rioux said she feels pow‐ erless and trapped because nothing she's tried seems to work, leaving her with "no es‐ cape."

"It becomes almost anxi‐ ety-inducing," she said in French. "I won't give up, but I find it exhausting."

Unions looking at legal remedies

PAFSO has decided to follow the example of the Public Service Alliance of Canada (PSAC) and study all possible legal remedies to force the government to provide a functioning health plan.

"It's the responsibility of the employer, and it's time they find a way to fulfil it," said Isfeld. "We haven't ruled out any legal options at this point. Everything is on the ta‐ ble."

PAFSO's lawyers are studying whether it would be possible to get a ruling forc‐ ing the government to put in place a temporary system that would allow employers to take out private insurance, she explained.

The union has also filed a policy grievance with the Treasury Board. The docu‐ ment obtained by RadioCanada states that the switch to a new insurance provider violates the collective agreement because it "does‐ n't take account of the mem‐ bers' rights to a functioning health insurance system."

PSAC, Canada's largest public sector union, filed a similar grievance in February.

The two unions are de‐ manding all affected public servants be compensated for the harm they've suffered in‐ cluding stress and pain, as well as financial losses.

PSAC national president

Chris Aylward said in a writ‐ ten statement he encourages all its members to file individ‐ ual grievances to put pres‐ sure on the employer.

Montreuil said PIPSC is now in the process of submit‐ ting a grievance.

Government 'working daily' with insurer

The federal government said it is still following up with

Canada Life to ensure it meets its contractual obliga‐ tions.

"We are working daily with Canada Life to make it understand that the com‐ pany it subcontracted for in‐ ternational coverage must improve the situation and en‐ sure that contractual obliga‐ tions are respected to the let‐ ter," Treasury Board Presi‐ dent Anita Anand said in a written statement.

"All public servants de‐ serve the highest quality of service for their healthcare plans."

Treasury Board Secretari‐ at spokesperson Joie Huynh noted that Canada Life has taken several measures to improve service since No‐ vember, and that there have been "important improve‐ ments in wait times and pro‐ cessing delays."

She added that Canada Life is working with MSH In‐ ternational to put in place an action plan for international insurance coverage.

Employees of Global Af‐ fairs Canada who are living abroad can also count on in‐ terest-free cash advances from the government to cov‐ er medical costs until they can be refunded by MSH In‐ ternational.

A Canada Life spokesper‐ son said in an email that the company working with MSH International and the federal government to improve the level of service for public ser‐ vants and retirees living or travelling abroad.

MSH International's pro‐ gram delivery director, Jina Park, said the company has put in place measures to speed up processing times, reduce call centre wait times and prioritize urgent cases.

"We have doubled our claims processing capacity and continue to add more staff to meet demand that was higher than projected in the RFP," she wrote in an email.