I am doing this lengthy article; because I was just talking to a potential client last week and they mentioned they had an employee who got caught between the Employee Benefit Program and Work Safe. While the two were fighting over who should pay the claim, the employee did not receive any money and ended up going back to work too early and further aggravated his injury. We are quick to blame the Insurance Company and Work Safe, but what about the Broker who did not understand that there was a Subrogation Form? The reason I ask this question is because my client said this option was never presented.
First question, What is a Subrogation Form? Subrogation is a term denoting a legal right reserved by most insurance carriers. Subrogation is the right for an insurer to legally pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid by the insurance carrier to the insured for the loss.
When a person becomes injured or has an illness, there may be more than one place they can receive benefits from. Each of these areas have different definitions of disability. I have provided a few common government plans that would pay on an injury or illness.
What does this have to do with a Subrogation form? If you are in the middle of working with more than one source to have your income replaced, you can request a Subrogation form from the 1st payor, which could be your Group Benefit Plan. This form gives the 1st payor the rights to any money you receive for income replacement from other sources. This means that while you are working with other disability payors you can still receive a full benefit.
Employment Insurance – The Employment Insurance (EI) program offers temporary financial assistance to unemployed workers. This assistance includes providing sickness benefits to people unable to work because of sickness, injury, or quarantine.
If you cannot work because of sickness, injury or quarantine, but you would otherwise be available to work, you could be eligible to receive up to a maximum of 15 weeks of EI sickness benefits.
Canada Pension Plan – Canada Pension Plan (CPP) provides disability benefits to people who have made enough contributions to the CPP and who are disabled and cannot work at any job on a regular basis. Benefits may also be available to their dependent children. The definition of disability is:
To qualify for a disability benefit under the Canada Pension Plan (CPP), a disability must be both “severe” and “prolonged”, and it must prevent you from being able to work at any job on a regular basis.
- Severe means that you have a mental or physical disability that regularly stops you from doing any type of substantially gainful work.
- Prolonged means that your disability is long-term and of indefinite duration or is likely to result in death.
Both the “severe” and “prolonged” criteria must be met simultaneously at the time of application. There is no common definition of “disability” in Canada. Even if you qualify for a disability benefit under other government programs or from private insurers, you may not necessarily qualify for a CPP disability benefit.
Work Safe – Eligibility
We start by asking a couple of fundamental questions to determine whether a worker is eligible for benefits:
- Was the worker working for a person or company that carries WorkSafeBC insurance or is legally required to do so?
- Was the injury or illness work-related?
We consider many factors in determining whether an injury or illness was caused by work or the work environment. We collect and review all available information, including reports from the worker, employer, and health care provider(s).
On complex claims, we often have to review a great deal of information to make a decision. We strive to do this and communicate our decision as quickly as possible.
ICBC – I was unable to get a definition of disability from their site. A Group Disability plan would only look at the money a person would be receiving due to loss of employment income.
Individual Disability – If you purchase an individual disability policy through an Insurance Company it will not offset against a Group Benefit plan; if the Individual Disability Policy was purchased Prior to the Group Benefit Plan going into effect.
Association Disability Plan – You must read each of these contracts, association plans can sometimes operate similar to a Group Benefit Disability plan and offset against other benefits received. This could also include a disability benefit through your bank on your mortgage or loans.
I have been talking a lot about this lately and I will probably continue, Employee Benefits aren’t just about rate. Does your broker understand what they have sold you??
If you would like to review or talk more about your Employee Benefit Program, contact Glendinning Insurance Services, your Resource Specialist.