You can work after 65, but don’t expect the same benefits


One of the books I have sitting on my desk that I fully intend to read and review is Victory Lap Retirement by Micheal Drak and Jonathan Chevreau. It is based on the premise that once you have reached financial independence you have the freedom to do something different including starting a second or encore career, which may involve taking more risk.

But what if you are still making a contribution in your first career and you want to work beyond age 65? Theoretically your employer can’t fire you, but the company can change the terms of your employment and do away with some or all of your employee benefits.

As lawyer  Daniel Lublin noted in a 2012 Globe and Mail article:

“Legislation in most provinces and territories still authorizes health insurance plans to treat individuals over 65 years old differently, without this distinction amounting to discrimination.

In Ontario, for example, both the Employment Standards Act and the Human Rights Code (which ironically are statutes that in almost all other cases are designed to protect employees) have sections which are interpreted to allow employers and insurance companies to treat individuals older than 65 years of age differently with respect to their health benefits. As a result, these employees have little recourse.

Despite the legislation, some collective agreements in unionized workplaces may guarantee health benefits for all employees regardless of age and at least one labour arbitrator has concluded that an employer could not restrict benefits for its older employees. Therefore, the denial of benefits could technically be illegal depending on the specific language in a collective agreement or an employment contract for non-union employees.However, these cases are exceptions and, for the most part across Canada, employers and insurance companies can take steps to reduce or eliminate benefits to employees over 65 years of age without it legally amounting to discrimination.”

So what are Canadian employers actually doing?

According to a survey conducted by consulting firm Aon Hewitt, currently 5%-10% of the respondent workforce is over age 65 but in five years the estimated percentage of the workforce that will be seniors is 45%! Yet when it comes benefits offered to active workers over 65, the numbers are not pretty.

Benefit                                     % offering the same benefit  to all ages                   % offering a different benefit to over 65
EAP                                         87%                                                                                 1%      

Dental                                     75%                                                                                  6%
Medical                                   72%                                                                                  7%
Out of country medical         71%                                                                                  2%
Short-term disability             58%                                                                                  8%
Basic life insurance              39%                                                                                 38%
Optional life insurance         35%                                                                                 18%
Critical illness insurance      17%                                                                                  4%
LTD                                            8%                                                                                 5%
Long-term care insurance      6%                                                                                  2%

“Canadian employers clearly recognize the value older employees bring to the table in terms of skill set, mentorship, leadership and filling labour shortages,” said Anthony Perlman, senior vice-president and national practice leader, health and benefits at Aon Hewitt Canada. “But our survey indicates that most organizations have yet to adequately address the pressing benefits challenges the growing over-65 cohort represents. With Canadians working longer, the time is now for employers to proactively plan and prepare for the evolving – and aging – workforce landscape.”

I agree.

I spent most of my career in an employer-side benefits consulting firm. I understand the concept of risk and that older workers often have a higher proportion of medical or dental claims than younger workers. I also get that currently insurance companies will not as a rule write policies that cover STD and LTD for older workers.

But what’s fair is fair.

Employment Standards and Human Rights legislation should not explicitly sanction benefits discrimination against older workers. And employers and insurance companies need to modify their practice to ensure equal benefits for employees of all ages!

What do you think?

1 Comment

  1. Thanks Sheryl. Something to watch out for!

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