Madam Speaker, it is a great pleasure to speak today to the motion that reads:
That, pursuant to Standing Order 68(4)(b), a legislative committee be appointed to prepare and bring in a bill that would create the position of ombudsman to oversee private disability insurers in Canada.
I support any initiatives which help Canadians with disabilities, including this one. I hope members of the House do not see the creation of an ombudsperson to deal with the difficult and sometimes discriminatory practices of private insurers as the complete solution to the problems our friends, families, neighbours and community members with disabilities face every day.
The mandate must be broader. An ombudsman must not only be a mediator who helps people fill out forms. He or she must act on behalf of people denied benefits by insurance companies. An ombudsman should also investigate employers who try to keep down their benefit costs by getting rid of disabled employees.
There is reason to believe that insurance companies encourage this practice. The most shocking example is the way the Canadian government, through the Treasury Board and its insurer, Sun Life Assurance Company of Canada, has dealt with long term disability cases. The most common complaint brought to my attention concerns the difficulties disabled government employees face when they try to access short term or long term disability insurance through work benefit plans.
I will summarize how the system for the hundreds of thousands of federal government employees is supposed to work. Employees who develop a disability which prevents them from working must first use up their sick days. They stay on the government payroll at full pay for this.
However many employees who develop an illness have few remaining sick days by the time they apply for disability leave. They then go off the government payroll on leave without pay and the insurer takes over. Sick employees must then apply and be accepted for EI sick benefits for up to 15 weeks at 55% of their pay. With a maximum income gap in force the tax system could reduce their income below the 55% level if they were well paid.
They then apply to their insurer, Sun Life or National Life, for the disability benefit which is 70% of their salary. For the first two years of disability benefit, which is called short term, employees must show medical proof that they are unable to perform all their job duties.
After two years they are classified as long term and receive 66% of their salary as income. They must then prove to the insurer that they are unable to do any work at all. That is how the system is supposed to work.
I am not at all enamoured by this model. It puts responsibility on the sick to prove their inability to work. It calls for complex forms to be filled out by doctors, a process often not covered by medicare. It causes the largest drop in income to take place at the same time the disability takes place, which is usually when the costs of having a disability are greatest.
It is a bad system by design, but the biggest problem is that it does not work as it is supposed to. I will refer to information I received, and which I believe other members of the House received, in May 2000 from government employees represented by the Public Service Alliance of Canada.
They sent my party a brief entitled “Victimising Disabled Employees in a deal to Save Insurance Companies Money!”. I have the document here if anyone is interested in seeing it. They document the following problems with the current system, which they say are caused by treasury board policies, to minimize insurance claims to employees with disabilities. Some of the problems are simple. There is not enough space on the disability insurance application forms for medical evidence. It is a simple problem but it causes high numbers of rejections due to insufficient medical information.
Applicants then wait a very long time before receiving benefits, in some cases up to two years. This is a hideous circumstance if we think about it. If one is sick or disabled or facing the trauma of being disabled, the bills are not dropping. They are probably increasing and yet one is forced off the payroll to wait up to two years for a claim to be accepted or rejected.
If applicants finally get approved for short term disability after two years, they are forced into the catch-22 of the long term disability policies of the company and the government before they see a nickel from the insurer.
The catch-22 works as follows. After 24 months the company forces the employee to show that no other work can be done which would pay up to two-thirds of the former employer's salary. Because the burden of proof is on the sick person the benefit is generally cut off after 24 months. The person must go to court to appeal. The company has a policy to not deal with anyone who starts legal action against it.
That is only part of the problem facing the sick person. The government has taken an even more odious approach. It terminates the person's employment after two years, even though the person is on leave without pay, so that it and the insurance company no longer need to pay benefits.
According to the brief I have referred to, after 24 months of medical leave without pay letters are sent to sick employees giving them four options: first, return to work; second, take medical retirement, which means no union representation or status as an employee and being at the mercy of the insurance company, which may cut off benefits and force employees to take it to court; third, quit with no benefits at all; and fourth, be fired for cause.
The government is supposed to be a model for society in accommodating persons with disabilities. It instead puts pressure on the sick to get out or be fired so that it and its insurer can save a buck. On top of this, according to the union, the names of employees on medical leave for 24 months are given to the insurance companies. It is hard to see any reason for that unless the companies review the files in order to cut people off.
It makes me wonder why we call it insurance. Insurance against what? Is it insurance against being picked on by an employer, the government, because one has a disability? Is it insurance for those who might be discriminated against by the people who have a duty to protect them?
We need solid insurance against such behaviour by the government. This is another example of how the government has good public relations regarding persons with disabilities but fails when it comes to action. Now is the time to stop.
The federal government should be a model for accommodating persons with disabilities. The federal government should make the accommodation of employees with disabilities a condition in awarding contracts. The federal government should work toward real income support so that poverty is no longer the biggest problem facing Canadians with disabilities.
I commend the member from B.C. for bringing forward this important idea for a disability ombudsman. It is one measure in regard to tackling an enormous systemic problem that starts right here at the federal government level with the treasury board.