Why group insurance benefits can be reduced at age 65

Age discrimination concept.



Mandatory retirement was abolished in Ontario at the end of 2006 so your employer can’t force you to retire. However if you work beyond age 65 in Ontario, you may be surprised to learn that your employer does not have to provide you with the same life, health, dental and disability coverage as your younger co-workers.

Amendments to the Ontario Human Rights Code (OHRC) ended mandatory retirement, but the Code still allows age-based distinctions in employee benefit plans if they comply with the Employment Standards Act (ESA) and its regulations. Because the ESA regs continue to define age as “18 years or more and less than 65 years,” protection under both the Code and the ESA effectively ends at age 65.

In unionized environments, several grievances have been initiated when employers discontinued benefits coverage for employees over age 65. Where contract language said benefits are extended to “all employees,” arbitrators have not permitted employers to restrict benefits for older workers. However, if different benefits for employees over age 65 were expressly contemplated in the collective agreement, benefit reductions have been allowed.

In the Ontario Nurses’ Association vs the Municipality of Chatham-Kent , the arbitrator also ruled that the collective agreement provision eliminating certain benefits at age 65 did not violate the Ontario Human Rights Code or the Canadian Charter of Rights and Freedoms.

However, more recently in Talos v. Grand Erie District School Board, the Ontario Human Rights Tribunal dismissed a claim by teacher Wayne Talos that negotiated provisions ending his group insurance at age 65 constituted age discrimination under the ESA and the OHRC. Nevertheless he was permitted to proceed with a Charer challenge to the constitutionality of the relevant OHRC provision

Allowing employers to exclude employees over age 65 from benefit plans like health insurance and long term disability insurance (LTD) clearly meets the Charter test for discrimination.

But even if this test is satisfied, s.25 (2.1) of the OHRC will not be declared unconstitutional if it is found to be “a reasonable limit on Charter rights, which can be justified in a free and democratic society.”

One can only hope the courts will agree that the sustainability of employee benefit plans is not in jeopardy if employers have to offer the same group insurance benefits to older workers.

In a recent article in the Canadian HRReporter, Jeremy Bell, a partner in the Vancouver benefits consulting firm George & Bell Consulting noted that the age 65 limit for long term disability benefits is extremely convenient for the group benefit industry because it is easy to apply and it limits liability and thus employer and employee costs.

But he concludes, “Inevitably, though, it will change. There will come a time when enough people are working past 65 that it will be impossible to continue to deem their income unnecessary.”

Change can’t come soon enough. If seniors work longer and live longer they are entitled to the same group benefits as younger workers.






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