Did You Commit to More in Your Collective Agreement Than Your Insurance Covers?06-Jun-12
Collective agreements often provide summaries of benefit coverage and that is usually with the intention of merely describing what the insurance plan provides. But what if the description is more generous than the actual insurance? What if the insurance has conditions for eligibility or other restrictions that are not mentioned? That could be because of an inadequate description or because the insurance coverage changed either after renewal or when the carrier was changed. In either case, as we are reminded by an Alberta decision issued in April, the employer could be liable even though the insurer is not. That could be very expensive for the employer.
In general, employers should not agree to descriptions of benefit coverage in their collective agreements or they could get caught by the consequences of both incomplete descriptions and changes in coverage. If their hand is forced, employers should clearly specify that the details of coverage are defined by the insurance policy then in effect.