Some people have private or employer-provided extended-health and disability plans. Extended-health plans cover some of the cost of health care expenses such as prescription drugs while disability plans cover some of a person’s wages if they’re unable to work. In most instances, if a person is injured in a motor vehicle accident and needs to access these benefits, they are available to that person.
Until recently, if a person injured in a motor vehicle accident received extended-health or disability benefits, they could claim and recover from ICBC the full-amount of those benefits. As an example, if a person needed physiotherapy at a cost of $75 per session and their extended health plan covered $50 per session, they could still claim $75 from ICBC even though they were only out-of-pocket $25. The rationale was that ICBC who, unlike the injured person, is not a party to the contract providing the benefits and paid nothing by way of premiums for the benefits should not be able to take advantage of the benefits. Another good reason for this rule was that many benefits contracts oblige a person who is injured due to the negligence of a third party to claim and recover from that third party or their insurer (ICBC) the amount of benefits paid and remit that amount to the plan. This is called a right of subrogation. If an injured party couldn’t recover that amount from the third party’s insurer but still be contractually obligated to remit that amount to their plan, they would be at a loss, which would defeat the entire purpose of having the plan in the first place.
This long-standing rule has since changed with amendments to the Insurance (Vehicle) Act.
Under the BC Government’s new ICBC regime, any benefits “paid or payable” by an insurer or employer, or under a collective bargaining agreement, are now deductible from a person’s ICBC claim. This means that any extended-health or disability benefits that a person receives – or were entitled to receive but, for whatever reason, did not receive – are deductible. Using the example above, if a person could have used their extended health benefits to off-set the cost of physiotherapy by $50 but didn’t such that they are actually out-of-pocket the full $75, they can still only recover $25. In this regard, there are many reasons why a person may not access their benefits. For instance, they might forget to apply, miss a deadline, or make a mistake in their application. Unfortunately, it does not matter how innocent the mistake or oversight is. The result is the same.
Moreover, the new amendments make it so that benefits are deductible even where the benefits-provider has a right of subrogation.
These changes are concerning for many reasons. First, relieving the negligent party from their obligation at law to compensate an injured person for their losses shifts the burden from the responsible party to someone else, here the injured person’s employer or their own insurance company. Second, eliminating the right of injured people to claim the full amount of benefits paid without also eliminating subrogation clauses could see injured people having to reimburse their plans with money they don’t have and are prevented from obtaining. This would be incredibly draconian and perverse. Third, since employers and other insurance companies stand to lose under this new regime, it is very possible that they may alter their contracts and practices to tighten the provision of benefits in all situations; not just those involving motor vehicle accidents.
Therefore, while these changes might make sense in principle, the BC government has not thought these changes fully through or done a good job implementing them. As with most of the recent changes to ICBC, innocent injured people stand to suffer.