Injury During Medical Leave Puts Employee’s Benefits in Jeopardy

Written on behalf of Peter McSherry
Hardhat on construction worker representing access to long term disability benefits when on leave
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Aside from wages, one of the most important aspects of an employment agreement to many employees are benefits, such as dental, medical, and other insurance benefits. However, it is not always clear what can happen to these benefits if an employee takes a leave from work. Further, employees may find themselves asking what options are available to them if an employer or insurance company attempts to restrict or terminate these benefits during a period of leave.

A recent decision from the Court of Appeal for Ontario shows the importance of having a comprehensive understanding of your benefits package as well as your employment contract.

Employee injured in accident while waiting for surgery

In the case of Soave v. Stahle Construction Inc., the appellant employer was a general contractor in the construction industry. The respondent employee began working for the employer in October 2013 as a construction site supervisor. Included in the employee’s compensation package was access to the employer’s group benefits plan. Under this benefits package, one insurance company provided group benefits, which included long-term disability benefits, while a benefits service provider (“the provider”) administered the benefits plan.

The employee completed his work supervising one construction site on January 27, 2014, and was asked to work on a new job site, however, he told the employer that he required surgery to address a hernia condition, and he temporarily stepped away from work. The employer provided a Record of Employment that indicated the employee was on temporary medical leave.

Unfortunately, the employee was involved in a serious motor vehicle accident on March 13, 2014, before his scheduled surgery. As a result of the accident, the employee suffered significant injuries.

Employee loses access to benefits following car accident

When the employee attempted to purchase medication following the motor vehicle accident, the insurer contacted the employer, who claimed that the employee was no longer employed with the company and was not entitled to any benefits. The employee tried to apply for long-term disability benefits, however, his application was denied.

The employee subsequently brought an action against his employer, claiming that he was still employed by the company, despite his leave, and was still entitled to benefits coverage. The trial judge agreed that the employee was still employed at the time the car accident occurred and was therefore entitled to long-term disability benefits. The employer was ordered to pay general damages of $245,995.56 and special damages of $2,935 to the employee.

Employer appeals Court’s decision

The employer appealed the decision to the Court of Appeal, arguing that while the employee was still employed on the date of the accident, he was not entitled to long-term disability benefits. In assessing the employer’s arguments, the Court of Appeal focused on the interpretation of the benefits booklet provided by the provider.

The crux of the employer’s argument was that if the provider’s benefits booklet governed the employee’s access to benefits, a closer look into whether the employee was still employed according to the terms of the benefits booklet. The employer claimed that the threshold to access long-term disability benefits required more than strictly employment status.

Court of Appeal analyzes benefits booklet provided by employer

The Court of Appeal analyzed the booklet section that explains the circumstances under which an employee whose active employment had been temporarily interrupted could continue to be eligible for benefits, including those related to long-term disability.

The section of the booklet titled “Coverage Effective Dates” stated that coverage starts on the effective date of the employer joining the plan or on the date any waiting period (such as a probationary period) ends “provided that you are actively at work on that date.”

The booklet went on to cover various circumstances under which coverage is continued even when employment is temporarily interrupted:

“Continuation of Coverage

If your employment is temporarily interrupted, under the following circumstances, your benefit coverage may be continued on a contribution basis. Please contact Mercon Benefit Services regarding the continuation of your benefits during any of the following periods of leave.

Leave of Absence: You may continue your benefits under this plan, with the exception of disability benefits, for up to six months during a leave of absence elected by you with your employer’s agreement. Prior to beginning the leave, you and your employer must agree to the scheduled start and finish dates.

Disability: You may continue your benefits while you are unable to work due to disability for up to 24 months from the date you become disabled. To be eligible for the continuation of benefits, you must either be in receipt of Workers’ Compensation or Long Term Disability benefits or be approved for waiver of premium under the Employee Life Insurance benefit. [Emphasis added.]”

The booklet also stated that an employee is not eligible to receive long-term benefits during a leave of absence.

Court of Appeal finds that employee became disabled during leave; matter sent back to trial

The Court of Appeal noted that after the employee stopped working on January 27, 2014, he was no longer entitled to benefits coverage unless he met one of the exceptions covered in the benefits booklet.

The Court of Appeal found that the trial judge had considered the employee’s leave a “temporary medical leave,” which would have allowed him to continue to qualify for long-term disability benefits. However, the Court of Appeal also found that the trial judge failed to consider whether the employee’s work was interrupted because he was on a leave of absence and how that applied to long-term disability eligibility.

The Court of Appeal acknowledged that the employee could only be entitled to long-term disability benefits if he was disabled according to the booklet’s definition on the date he stopped working and had to consider whether he became disabled during his temporary leave of absence.

The Court of Appeal found that the employee became disabled during his leave and therefore did not qualify him for benefits. However, the Court of Appeal did not issue a ruling on the matter, opting instead to send the matter back to trial for further determination.

Contact the Employment Lawyers at Peter A. McSherry for Advice on Employment Benefits and Entitlements

If you suspect your rights to employment insurance benefits have been violated, or you have been offered a severance package that seems unfair, it is important to talk to an experienced employment lawyer right away. Peter A. McSherry helps clients work through various employment-related disputes and breaks down complex language to ensure that you understand exactly what you are entitled to. To schedule a confidential consultation with a member of our employment law team, contact our office at 519-821-5465 or reach out to us online.