KFActs: Working Post-65 and Benefits Coverage
By Rachelle Hollaway, Member-at-Large
It is becoming more common for faculty members to work past the traditional age of retirement. While the majority of benefits remain the same, faculty members who choose to work past the age of 65 face a reduction in some benefits.
The table below is an excerpt from the Faculty Benefit Summary Sheet, found in the Resources section of the KFA website.
As you can see, the sections highlighted in yellow reflect the changes in benefits coverage faculty can expect when they turn 65, 70, and 71.
At age 65, your life insurance will reduce from 3 x your annual earnings to 1 x your annual earnings up until the termination age of 71. The maximum coverage remains the same.
Accidental Death and Dismemberment
At age 65, your accidental death and dismemberment insurance will reduce from 3 x your annual earnings to 1 x your annual earnings up until the termination age of 71. The maximum coverage remains the same.
The optional insurance plans offered by Manulife also have a termination age of 71.
All faculty members, regardless of age, are entitled to 30 days of sick leave paid at 100% of your current salary. You may take more than one 30-day period of sick leave for different reasons. For example, if you are in a car accident and you need time to recover, you have access to 30 days. If you then become ill for any other reason outside of the car accident, you have coverage for another thirty days. The Employer may require medical documentation for any sick leave coverage, regardless of your age or medical ailment.
If you think you may be ill for longer than 30 days, and you are under the age of 70, you may apply for short-term disability coverage through Manulife. Short-term disability coverage lasts for up to 21 weeks and is paid at 70% of your current salary. If you turn 70 while collecting short-term disability, your coverage can extend for the full 21 weeks. For example, if the date of disability is March 1, you will become eligible for short-term disability coverage on March 31 (after 30 days of sick leave). If you turn 70 on April 15, and you remain unable to work the entire time, your short-term disability coverage will extend to August 26. If you are unable to return to work on August 27, you have the option of going on a leave without pay until you recover.
If you are over the age of 70 and you become ill, you have the option of going on a leave without pay after your 30 days of sick leave coverage ends.
If you are under the age of 65, you have access to long-term disability coverage after your short-term disability coverage has ended. Long-term disability coverage lasts until you turn 65 and is paid at 70% of your current salary. If you turn 65 while collecting long-term disability payments, your coverage will end at the end of your birthday month. For example, if Manulife is providing long-term disability coverage for you and you turn 65 on April 15, your coverage will end on April 30. If you are unable to return to work on May 1, you have the option of going on a leave without pay until you recover. You may also elect to retire.
For more information about leaves, please read the following:
College Pension Plan
From the College Pension Plan: “If your long-term disability benefits are provided by a group disability plan approved for pension purposes, you will continue to accumulate pensionable and contributory service while you are away from work. In this case, you do not need to buy [back] service. If your long-term disability benefits are provided by a group disability plan not approved for pension purposes, you may be able to buy service when you return to work.” You also continue to accumulate pensionable and contributory service during a 30-day sick leave and short-term disability leave.
One year of pensionable service adds about 3% to your monthly pension. This amount is not based on the total amount invested in your pension but the number of years of contributory service and your five best years of income during that service.
If you work post-65, you continue to contribute to your pension until November 30 of the year you turn 71. For example, if you turn 71 in May, your contributions to your pension will continue until November 30. You can then draw your pension on December 1 and continue to work. The College Pension Plan will mail information to you regarding the above in the year you turn 71. They will encourage you to complete the paperwork required to draw your pension and thus be paid your monthly pension amount. If you do not fill out this paperwork, you will not draw your pension until the paperwork is completed.
The Future of Post-65 Benefits Coverage
Over the years, the unfair coverage of benefits for those over 65 has been challenged, and the issue has been addressed several times via the courts. In 1992, the issue was brought to the Supreme Court: Zurich Insurance Co. v. Ontario Human Rights Commission. The case established the rights of organizations, businesses, and governments to discriminate based on age categories for reasonable and bona fide rationales of undue hardship. In the case of insurance companies and the Canadian government, short-term and long-term benefits coverage can be denied to those over the age of 65 since providing this coverage would cause “substantial interference with a service provider’s business enterprise” (Council of Canadians with Disabilities v. VIA Rail Canada Inc, 2007 (703)). As cited in Via Rail, 2007, the onus of proving undue hardship falls on the organization involved:
A service provider’s capacity to shift and recover costs throughout its operation will lessen the likelihood that undue hardship will be established: Howard v. University of British Columbia (1993), 18 C.H.R.R. D/353 (B.C.C.H.R.). Other relevant factors include the impact and availability of external funding, including tax deductions (Brock v. Tarrant Film Factory Ltd. (2000), 37 C.H.R.R. D/305 (Ont. Bd. Inq.)); the likelihood that bearing the net cost would threaten the survival of the enterprise or alter its essential character (Quesnel v. London Educational Health Centre (1995), 28 C.H.R.R. D/474 (Ont. Bd. Inq.)); and whether new barriers were erected when affordable, accessibility-enhancing alternatives were available (Maine Human Rights Commission v. City of South Portland, 508 A.2d 948 (Me. 1986), at pp. 956-57). (703)
In BC, two cases have been brought to the BC Human Rights Tribunal against employers and insurance companies for discriminating against employees who are over the age of 65: Jones obo others v. Coast Mountain Bus Company and others, 2014 BCHRT 166 and Johnston obo others v. City of Vancouver (No. 2), 2015 BCHRT 90.
Both complaints were dismissed by the BCHRT. In Johnston v. City of Vancouver, the rationale for dismissal is as follows:
On the material before me, limiting eligibility for participation in the Disability Plan to those under the age of 65 is a “common, accepted and established practice” with respect to long-term disability benefits in Canada. The material on the file, in my view, establishes that the plan was adopted in good faith by both the City and the Union and there is nothing in the material that remotely suggests that the plan was implemented for the purpose of defeating protected rights. The age exemption, which the Complainant asserts is discriminatory, has been in place long before its insertion in a plan would have been necessary in order to defeat protected rights because, when the age exemption was first inserted in the Disability Plan, the definition of age in the Code still ceased at age 65. In any event, there is no evidence in the material before me to support that a motive for the age exemption in this plan was to defeat protected rights. (14)
Recently in Ontario, a grievance was successful because the insurance company was unable to demonstrate undue hardship. In Talos v. Grand Erie District School Board, 2018 HRTO 680, rights to prescription drug coverage were won for post-65 teachers because only 2-3% of teachers were over the age of 65, and the School Board could not provide evidence that coverage would have caused operational harm. While Talos’ claim did not include short or long-term disability coverage, the HRTO found, “The actuarial evidence presented in this matter made it clear that there are reasonable ways to protect older workers from discrimination in relation to workplace benefits, while protecting employers from the expense of unduly costly healthcare benefits and life insurance plans” (86).
Currently, a grievance has been filed by the Okanagan College Faculty Association concerning the rights of post-65 benefits coverage. The grievance is considered to be precedent setting and is therefore taking longer than usual (the average for arbitration proceedings is two years). The details of the arbitration are not yet publicly accessible, and the KFA is not privy to the legal arguments being tested.
It remains to be seen how the Okanagan College Faculty Association grievance will play out. Hopefully, access to fair benefits coverage will be provided to post-65 faculty in the near future. In the meantime, your KFA is bringing post-65 benefits to the bargaining table as per the will of our membership in the last bargaining survey. The KFA will also provide updates on this important case as more information becomes available.
As always, if you have any questions about this topic or any other concerns, please contact your KFA.