PSAC files grievance, seeks damages for public servants for messy Canada Life benefits switch

The Public Service Alliance of Canada (PSAC) says it has filed a policy grievance against the Treasury Board of Canada, and is demanding compensation for members following the federal government's messy transition to its new health benefits administrator last year.

Sasha Hart, general counsel with PSAC, informed the standing committee on government operations and estimates on Monday morning.

"It has failed to protect the rights of members to a functioning health-care plan," said Hart. "As well as caused adverse impacts on members with disabilities and other intersecting identities."

On July 1, 2023, the federal government switched insurance providers from Sun Life to Canada Life.

As part of its grievance, PSAC is seeking financial compensation as well as general damages for pain and suffering and stress associated with the transition to Canada Life, said Hart.

In its policy grievance document, PSAC said the federal government's conduct in transferring the health-care plan was "in violation of the collective agreement." PSAC says it implemented the transition "without due regard for the rights of all members to a functioning" plan, and claims it had caused "adverse impacts on grounds protected by the Canadian Human Rights Act."

Members continue to face problems accessing health benefits but wait times are improving, according to Seth Sazant, PSAC pension benefits officer, who also provided testimony at committee.

"This system is fundamentally failing our members," said Sazant.

He stated the two major delays that continue to pose problems for members are prior authorization for expensive drug prescriptions as well as a cyber security incident which impacted the benefits administered to members working outside of Canada.

Canada Life contracted the administration of those international benefits to MSH International.

PSAC general counsel Sasha Hart told a federal standing committee Monday that it was pursuing financial compensation and damages for pain and suffering. (House of Commons)

MSH International Canada said it detected the incident on Feb. 9, and immediately paused services. Law enforcement was notified and a thorough investigation is underway, the insurance provider said in a statement.

"We are working to determine if personal information was affected by this incident. If the investigation determines personal information was affected, impacted individuals will be notified," MSH said earlier this month.

As a result of the security incident, international claims are not being processed, according to Sazant.

About 3,500 claims are over 60 days old and more than 7,000 are at least 30 days old and awaiting fulfilment, said Sazant.

Speaking to reporters this afternoon, Treasury Board president Anita Anand implored Canada Life to ensure MSH International fulfils its contractual obligations to federal public servants by reimbursing them as quickly as possible. Anand added it was her understanding that MSH has now begun to process claims again.

CBC has contacted Canada Life for comment is waiting for a response.

Canada Life updates its response times online and Monday's update showed 99 per cent of all contact centre calls were answered within two minutes and the average contact centre wait time was 0.1 minutes.

As for claims processing, the website states digital claims are being handled within one day, on average, and paper claims an average of six days. Those figures are updated weekly.

But last year, for thousands of federal public servants, retirees and their families, a seamless transition of plan administrators was anything but.

Within days of the switch, CBC News began receiving phone calls and emails from Canadians affected by the change — people whose benefits had suddenly and for no apparent reason been cut off, leaving them on the hook for expensive treatment or medication.