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HomeMy WebLinkAbout2021-0858.Association.22-07-19 Decision Crown Employees Grievance Settlement Board Suite 600 180 Dundas St. West Toronto, Ontario M5G 1Z8 Tel. (416) 326-1388 Commission de règlement des griefs des employés de la Couronne Bureau 600 180, rue Dundas Ouest Toronto (Ontario) M5G 1Z8 Tél. : (416) 326-1388 GSB# 2021-0858 IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD BETWEEN Association of Management, Administrative and Professional Crown Employees of Ontario (Association) Association - and - The Crown in Right of Ontario (Treasury Board Secretariat) Employer BEFORE Bram Herlich Arbitrator FOR THE ASSOCIATION Kelly Doctor Goldblatt Partners LLP Counsel FOR THE EMPLOYER Paul Meier Treasury Board Secretariat Legal Services Branch Counsel HEARING January 18, 2022; April 12, 2022 and May 31, 2022 Decision [1] The hearing in this matter results from the Claims Review process set out in Article 32.2 of the collective agreement. As the parties’ representatives on the Joint Benefits Committee, established under Article 32, were unable to resolve the dispute related to the benefits claim, the matter has been referred to me. [2] The complainant, SH, filed a claim to be reimbursed for expenses incurred for the 30-minute massage treatment received by her dependent child in February 2020. The charged amount of the visit was $80. This was not the first time the claimant had filed such a claim. On at least nine previous occasions in the previous 18 months, the complainant filed similar claims (the first seven for $70; the last two for $80). On each of those occasions, the claimant received full reimbursement. However, as a result of what the union characterizes as the improper application of limitations on recovery, including unilateral administrative changes implemented by the insurer, the total payment to the claimant in the case giving rise to this dispute fell $8.00 short of full reimbursement. This case is about those eight dollars. [3] This is a contest involving the elaborate terms of a collective agreement, the sometimes dated and somewhat precious legacy formulations of insurance policies forged in earlier times, all coupled with the administrative practices, be they reasonable and/or customary, of insurance companies. In that context it should not be at all surprising that the simplicity of the description of the previous paragraph is illusory. [4] Indeed, while the ultimate issue(s) in the case is (are) not terribly complicated, there is an intricate, complicated and confusing factual artifice which sits above the ultimate legal questions. The parties have traversed much of this territory through their Partial Agreed Statement of Fact, a lengthy and elaborate document. I have attached this as an Appendix to this award. It details the relevant provisions of the collective agreement and the insurance plan. It - 2 - also presents the specifics of the claim in question and describes the manner in which the insurer, on behalf of the employer, administered the claim. I will, however, attempt to present the facts and issues in a more summary fashion. [5] I begin by identifying the source of the dispute, the essence of which may not always have been within the common view of the parties. It was the difference in the claimant’s treatment which is at the heart of the union’s challenge. Previous similar claims resulted in full payments; the instant claim payment was $8.00 short. And that difference in result is easily accounted for. It was the evidence of Alyssa Garvey, the Manager of the Health and Disability Claims Management Teams in the Member Health and Ability Department with the Canada Life Assurance Company (“Canada Life”), the insurer charged by the employer with administering the collective agreement benefits that effective on or about January 1, 2020, Canada Life established and applied a Reasonable and Customary (”RNC”) Limit for massage therapy treatments in Ontario under the SH&H Plan at $110 for a one-hour visit and also added a new RNC limit for 30-minute massage therapy treatment visits at $72 per visit. [6] There is no dispute that it was the imposition and application of the insurer’s “Reasonable and Customary Limit” and, in particular, the newly minted 30-minute version thereof that resulted in the reduction in reimbursement the claimant received as compared to previous similar or identical claims. [7] To be clear, the employer relied on evidence, little of which was controversial, to establish how the insurer arrived at and implemented the $8.00 shortfall. I will, for the sake of completeness, shortly, but briefly, illuminate that path. It is critical to note, however, that the union’s concern was not directed at how the insurer performed its ciphering, but rather at the fact that any such ciphering was done at all. Put as simply as possible, the union did not directly challenge how the insurer arrived at its results. If the union agreed, which it did not, that the insurer was entitled to rely on the conventional insurance contract - 3 - baggage of “Reasonable and Customary Limitations” and that, in such a case, it was thereby permitted to fashion, create, impose and apply new variants of those limitations, the instant grievance would likely be hard pressed to proceed. But the union’s position is clear and straightforward: a proper interpretation of the collective agreement precludes the employer’s ability (and thereby the insurer’s) to rely on the application of any RNC limitations. Alternatively, even if there is some ability for the employer to continue to rely on such limitations, it was not entitled to introduce the innovation of limitations tied to 30-minute time periods. [8] Before even considering the provisions of the collective agreement and their interaction with the terms of the Plan, I will briefly describe how the insurance company’s computations led to the $8.00 shortfall the union challenges. [9] The evidence in this case provided something of a primer on the ways in which, or, put somewhat differently, the structural and institutional obstacles that can stand in the way of full recovery for employees covered by the Plan. The employer calls these necessary layers of risk mitigation; the union calls them cost cutting. These observations likely apply more widely, but are limited to the service in question, massage. To begin with, the collective agreement imposes an annual limit of $1200 for this service. Next, the agreement limits the maximum recovery for any individual claim to $35 per visit. One can be forgiven the immediate and obvious response: If the maximum payment is limited to $35, why are we even talking about the $8.00 difference between the $72.00 the complainant received and the $80.00 paid for her child’s massage? (Patience is required and will be rewarded.). Next, we must consider the insurer’s impugned practice (clearly articulated in the Policy but not in the collective agreement) of setting another upper limit on claims based on what it assesses as the “reasonable and customary charges” that are not to be exceeded. It will be recalled, that at the time of the claim that limit was set at $110 per one hour visit - 4 - and the insurer had only very recently imposed a new category of limitation of $72 tied to a 30-minute visit. [10] While there are undoubtedly issues with these latter limitations (indeed, these are the issues in the case), the facts of the case bring on a further ciphering challenge, as a result of two factual particularities: the claim was for a dependent child and the complainant’s spouse also had benefits coverage through their employment and a different carrier. [11] The existence of this “double coverage” engages the need for “Coordination of Benefits” (“COB”), a term of art within the insurance industry. Indeed, some four pages of turgid, frequently virtually incomprehensible, provisions can be found in the insurance policy outlining rules and procedures to be followed in cases requiring COB. Fortunately, I am not charged with the task of interpreting these provisions. The parties were content not to make that the main event. As a general matter, the COB may permit some claims, which could not be fully paid under only one or the other of the two policies, to be fully paid by the combined operation of the policies. At the same time there may be other cases (the present one is an example) where the total amount paid out on a claim may be less than the full claim and also less than the sum of the amounts that would have been paid out under the two policies separately. [12] The insurer administered the claim as follows:  As the claim was for a dependent child, the assessment began with the spouse whose birthday falls earlier in the calendar year, in this case, the claimant’s spouse. (This appears to be a widely accepted convention within the industry. And while it might work some hardship in individual cases – the result would likely have been more favourable for the complainant had her insurer been treated as the first payor – there was little apparent appetite to challenge - 5 - this “swings and roundabouts” approach to benefit administration.)  The spouse’s claim resulted in a payment of $45.00 of the total $80.00 claimed.  Attention then turned to the complainant’s entitlement. Had the insurance company simply paid the $35 maximum amount per visit contemplated by the collective agreement, that would have been the end of the matter. It was not to be. They paid $27.00. The rationale is as follows. The massage session in question was a 30-minute session. The insurance company’s RNC limit for such a session was $72.00. The insurer sees this not simply as a limit on how much it will pay out on a given claim, but in the case of COB a limit on how much a claimant can receive in total from the two implicated insurers. As the primary insurer had already paid $45 of the claim, this left a maximum of $27 for the insurer to pay to get to the RNC limit of $72, and that is what they paid, leaving the claimant $8.00 short of full reimbursement of her expenses. [13] With that appreciation of the facts, I now turn to the legal analysis. I begin with the collective agreement. Article 31 contains provisions which regulate the relationship between the collective agreement and the terms of certain benefit plans, including the Supplementary Health and Hospital (“SH&H”) Insurance Plan: ARTICLE 31 - BENEFIT PLANS FOR FULL TIME EMPLOYEES 31. Benefits - General 31.1 “Benefit Plans” in Articles 31-36 means the Basic Life Insurance Plan, the Supplementary & Dependent Life Insurance Plan, the Supplementary Health and Hospital Insurance Plan, (including vision and hearing aid coverage), the Dental Plan, and the Long Term Income Protection Plan in force as of September 1, 1997 with the Great West Life Assurance Company or any successor Plan. - 6 - 31.2 Subject to the provisions of this Agreement, the benefits contained in the Benefit Plans as they were constituted on September 1, 1997 shall be provided to full time employees on the same terms and conditions as were in place on September 1, 1997. These benefits and terms and conditions may only be altered by mutual agreement of the parties. *** 31.5 The benefits contained in the Benefit Plans are supplemented by the provisions of Articles 32 - 36. Where a conflict exists between the provisions of a Benefit Plan and this Agreement, the provisions of this Agreement shall prevail [14] The S&H Plan referred to in Article 31.1 outlines six types of healthcare expenses covered by the Plan: Basic; Hospital; Prescription Drug; Paramedical; Extracare; and Vision Care/Hearing Aid. The section outlining Paramedical expenses (which includes massage) reads as follows: “Paramedical covered expenses” means where permitted by law and to the extent that such services or portion thereof are medically necessary and are not covered by the Medical Care Insurance plan or the provincial government hospital plan of the employee’s home province, reasonable and customary charges incurred for: (1) out-of-hospital services of a legally licensed Chiropractor, Osteopath, Chiropodist, Podiatrist, Naturopath, Speech Therapist, Masseur or Physiotherapist who renders a service within the scope of his license. It is specifically provided, however, that benefits for such expenses shall not exceed $12.00 for any one such visit. (2) surgery which is performed by a Podiatrist in his office. It is provided, however, that benefits for such expenses shall not exceed $100 per person in any one calendar year. - 7 - [15] The collective agreement provision which deals directly with paramedical services is Article 34.2(e): 34.2 The Supplementary Health and Hospital Insurance Plan shall include reimbursing employees for the following eligible expenses: *** (e) paramedical services include the following coverage per employee and each of their dependants: (i) the services of an acupuncturist, at the rate of thirty-five dollars ($35) per visit, to an annual maximum of twelve hundred dollars ($1200); (ii) the services of a speech therapist, at the rate of forty dollars ($40) per half hour, to an annual maximum of fourteen hundred dollars ($1400); (iii) the services of a chiropractor, osteopath, naturopath, podiatrist, chiropodist, physiotherapist and masseur, if licensed and practising within the scope of their license to a maximum of thirty-five dollars ($35) per visit for each visit not subsidized by OHIP and to an annual maximum of twelve hundred dollars ($1200) for each type of service. [16] Disposition of the union’s principal position in the case is a matter of pure contract interpretation. The essential interpretive conflict between the parties relates to whether or not there is any conflict between the terms of the Plan and the provisions of the collective agreement. - 8 - [17] The union asserts that the combined effect of the above provisions is that, with respect to massage, the RNC limitation on benefits, found in the Plan, ceased to be of any relevance or application once the parties inserted Article 34.2(e)(iii) into the collective agreement. The Plan limitation cannot live peacefully alongside the paramount collective agreement language which explicitly continued one limitation (per visit) and added a new one (annual maximum) but did not include the RNC limitation. [18] For its part, the employer celebrates, or at least defends, the multiplicity of layers of risk mitigation. The collective agreement provisions did not explicitly remove the Plan’s RNC limitations and the three limitations in question (RNC, per visit maximum, and annual maximum) are all upper limit maxima not guaranteed minimum benefits. They can and ought to be permitted to operate in peaceful harmony. [19] While the parties referred to a number of cases in support of their positions, I agree with the union that the case that warrants the most attention is a decision between these same parties, a decision which focused on the interaction between the provisions of the same Plan (though not related to massage) and those of the collective agreement: AMAPCEO (Union Grievance) v The Crown in Right of Ontario (Ministry of Government Services, 2005 CanLII 54840 (ON GSB) (Nairn) (the “prescription drugs” case). [20] Prior to considering that case in a little more detail, I begin with an observation about the relationship between the Plan provisions and the collective agreement. I feel compelled to start here because it appears to me that, in the instant case as in the prescription drugs case and as in another matter between the same parties (Association of Management, Administrative and Professional Crown Employees of Ontario (Lee) v. Ontario (Government Services), 2014 CanLII 63519 (GSB Herlich) (the “Lee” case), the employer appears to have stepped forward on a flawed interpretive foot. For example, in - 9 - the instant case, the employer’s very first characterization of the interpretive issue was cast as whether the collective agreement language provides the union with the power to veto administrative processes reserved to the insurer by the express terms of its contract with the employer. The terms of any contract (none was placed before me) between the employer and the insurance company are of no interest or relevance to me. Those are matters between those two parties. However, if their contract contains provisions which are or otherwise result in breaches of the collective agreement, the fact of their inclusion in a contract between the employer and the insurer will be of no moment in relation to any determination of a breach of the collective agreement. [21] Perhaps more to the immediate point was the employer’s assertion, very early in its final argument, that all benefits are subject to the Plan. This is perhaps another variation on the employer submissions made in both Lee and in the prescription drugs case to the effect that the provisions of the Plan are incorporated into the collective agreement. I believe the summary I offered in the Lee case (at para 22 and 23) continues to be apposite: [22] For our purposes, a review of the structure of the collective agreement provisions begins with the specific “Benefit Plans” defined in Article 31.1. And while it may be a distinction without an immediate significant meaningful difference for our purposes, the employer’s suggestion that the specific plans identified are incorporated by reference into the collective agreement is not entirely accurate. Rather, Article 31.2 serves, subject to the terms of the collective agreement, to freeze the benefits (as well as the terms and conditions attached thereto) contained in those specified plans. No change is permitted except by agreement of the parties. [23] In addition to providing that this “freeze” is subject to the terms of the collective agreement, Article 31 continues even more explicitly (in 31.5) and provides that the “frozen benefits” are “supplemented” by the following articles (32-36) of the agreement and, lest there be any doubt as to the effect of such - 10 - supplementation, mandates that any conflict between the latter and the former is to be resolved in favour of the supplementation. [22] The Lee decision, however, adds nothing further to our current inquiry, as the issue in that case was very different – it involved an interpretation of language of the collective agreement and, in particular, whether the agreement’s use of the phrase “major restorative services” was sufficient (I found it was not) to provide coverage for dental implants, a benefit not previously included in the Plan. But the prescription drugs case is another matter altogether. While it deals with a different benefit under the Plan and while it therefore engages different sections of the Plan and the collective agreement, the interpretive exercise is virtually identical. The question, in broad terms, was whether certain limitations found in the Plan were effectively extinguished by collective agreement language that did not include them. [23] Although the prescription drug case was decided under the terms of the parties’ second collective agreement, it dealt with language that had been negotiated as part of the parties’ inaugural round of collective bargaining. (I note as well that the case dealt with two other issues apart from prescription drugs, but the focus on the latter is sufficient for our purposes.) And indeed, the Board heard evidence of both negotiating history (of the first collective agreement) and the practice of the parties (some of which may even have pre-dated the first collective agreement). But while much of the decision details that extrinsic evidence, the Board ultimately concluded that there was no ambiguity in the relevant terms of the collective agreement (though it also suggested that, if anything, the evidence of negotiating history tended to support the union’s position.) [24] The provisions of the Plan specific to prescription drugs read as follows: - 11 - "Prescription Drug Covered Expenses” means, where permitted by law, 90% of reasonable and customary charges necessarily incurred for medically necessary (A) drugs and medicines, and (B) injectable drugs, including human chorionic gonadotropin injections, when administered by a physician or surgeon and for which no reasonable non-injectable alternative is available which (l) are prescribed by a physician for the treatment of a diagnosed injury or illness or, in the case of human chorionic gonadotropin injections, for the treatment of infertility, and (2) are dispensed by a licensed pharmacist or by a physician or surgeon, legally authorized to dispense such drugs and medicines… It is specifically provided that no benefits shall be payable for any of the following: (1) contraceptive preparations and devices (other than oral contraceptives). (2) any single purchase of drugs or medicines which exceeds a three month supply. (3) any drug or item which does not have a drug identification number as required by Section 005 of Division l of the Food and Drugs Act, Canada (4) drugs that are registered under Division 10 of the Food and Drugs Act, Canada [emphasis added] [25] The collective agreement at the time provided the following with respect to prescription drugs: 34.2 The Supplementary Health and Hospital Insurance Plan shall include reimbursing employees for the following: - 12 - (a) ninety percent (90%) of the cost of all prescription drugs that by law require a physician's prescription, including injectable drugs, and medicines prescribed by a licensed physician or other licensed health professional who is legally authorized to prescribe such drugs, and dispensed by a licensed pharmacist or by a physician legally authorized to dispense such drugs and medicine. For clarity, life- sustaining drugs shall continue to be covered on the same basis as under the previous collective agreement. Provided that a generic drug is listed in the Canadian Pharmaceutical Association Compendium of Pharmaceuticals and Specialties, reimbursement for drugs covered by the Plan will be based on the cost of the lowest priced generic version of the drug that the dispensing pharmacist can readily provide, unless the prescribing physician or health professional stipulates no substitution, in which case the reimbursement will be based on the cost of the drugs prescribed. [26] The matter had proceeded as a policy grievance. There were no specific facts pleaded or, at least, none presented in the award, which were said to constitute an improper denial of benefits in any given individual case. Neither, it is fair to say, is there a clear presentation of the specific issue at hand. Having said that, it is also clear from the award that, reflecting the bargaining between the parties, the issue, in broad terms, was whether the limitations articulated in the Plan survived the parties’ collective bargaining, or, more accurately, whether the provisions of the agreement served to extinguish the limitations of the Plan. And, in the course of the award (at pp. 5-6, for example), the Board did (at least parenthetically) enumerate the “qualifiers found in the insurance plan (those being, reimbursement for drugs that are “medically necessary” for a “diagnosed illness or injury” and payable at “customary and reasonable charges [sic]”).” [27] Given the ultimate irrelevance of the extrinsic evidence in the case, the parameters of the Board’s inquiry were relatively contained. Its response was simple and direct. Beginning at p. 19, the Board observed: - 13 - The collective agreement contemplates that it may contain conflicts or enhancements. The parties have provided for that circumstance in Article 31.2 and, more particularly, in Article 31.5. Article 31.2 is clear that the benefits contained in the September 1, 1997 insurance plan are frozen, “subject to” the terms of the collective agreement. Article 31.5 recognizes that the collective agreement “supplements” the plan, that is, it provides additional material, and further provides that the collective agreement terms prevail over the plan in the event of any conflict between the two… …a plain reading of Article 34.2(a) discloses no ambiguity. There is a clear direction that the Supplementary Health and Hospital Plan “shall include” reimbursement for “ninety percent (90%) of the cost of all prescription drugs that by law require a physician’s prescription…..” in circumstances where the drug and medicine is a) prescribed by a licensed physician or other health professional legally authorized to prescribe such drugs, and b) the drug and medicine is dispensed by a licensed pharmacist or by a physician legally authorized to dispense such drugs. There is a recognized limitation that the plan need only reimburse drugs on the basis of the cost of the lowest priced generic version of the drug unless the prescribing health professional stipulates no substitutions. The language of “all prescriptions drugs” is reinforced by clarifying that “injectable drugs” are also included. There are no other limitations or qualifiers in respect of reimbursement such as those reflected by the plan. In light of Article 31.5 of the collective agreement, this direction for payment prevails over the terms of the plan. [emphasis added] And at p. 29 the Board concluded: …Article 34.2(a) of the collective agreement requires the employer to reimburse employee drug claims provided only that the claim meets the requirements of that provision of the collective agreement, that is, that the drug and medicine (which by law requires a physician’s prescription) has been prescribed by a licensed physician or other licensed health professional legally authorized to prescribe such drugs and that it is dispensed by a licensed pharmacist or a physician legally authorized to dispense such drugs and medicine. [emphasis added] - 14 - [28] Again, it might have been useful had the Board specifically enumerated the Plan limitations related to prescription drug coverage that were extinguished by the provisions of Article 34.2 (a) of the collective agreement, but there can be no doubt that Board is saying that all such limitations, certainly to the extent they are found in portions of the Plan dealing with prescription drugs, have been replaced and extinguished by the collective agreement. Much of the focus was on the “medically necessary” limitation found in the Plan, detailing the bargaining exchanges between the parties. There can be no doubt, however, that the Board’s conclusion is that the only limitations which remain are those set out in the agreement. Thus, all of the limitations, including the RNC limitation no longer apply to prescription drug benefits. [29] I am persuaded that a similar approach ought to be taken in the case before me. Put most simply: the Plan, the legacy language, as it were, identifies and defines “Paramedical Covered Expenses” (including those for massage); the collective agreement identifies and defines “eligible expenses” to be reimbursed for paramedical expenses (including those for massage). While there are obviously differences in the language, from the lens of our inquiry, these are essentially two separate sets of provisions each purporting to address the same thing – what massage related expenses are covered and on what terms. But it is not my role to attempt to merge or harmonize these sets of provisions. Rather, I must begin with and preserve the preeminence of the collective agreement. The collective agreement provisions are a given and cannot be diminished by the terms of the Legacy plan. There is an important nuance to the language of 31.2: 31.2 Subject to the provisions of this Agreement, the benefits contained in the Benefit Plans as they were constituted on September 1, 1997 shall be provided to full time employees on the same terms and conditions as were in place on September 1, - 15 - 1997. These benefits and terms and conditions may only be altered by mutual agreement of the parties. [30] The purpose of this provision is to preserve, to freeze benefits which existed in 1997, unless and until those benefits are altered by mutual agreement of the parties, i.e., by amendment to the collective agreement. It is true that this “freeze” also applies to the terms and conditions of the frozen benefits. Notwithstanding, I am of the view that the purpose of the clause is to freeze benefits, to ensure those benefits previously provided are continued unless and until the parties agree otherwise. The purpose is not, as the employer would have me do here, to preserve restrictive limitations on benefits after the parties have negotiated language which does not include any such restrictions. [31] On that basis, I am persuaded that the RNC limitation no longer applies to claims for massage services. Such claims are subject to the per visit and the annual limitations, but the former RNC limits do not apply. [32] I should note that I am bolstered in my conclusion by the following. The parties, in 2015, jointly published a lengthy and comprehensive document which is a Benefit Guide for OPS Employees represented by AMAPCEO. At page 9, it includes the following definition: Reasonable & Customary Fees usually charged for standard medically approved services, procedures and supplies normally applied in the treatment of a particular illness or condition and provided at cost equivalent to the average charged for such treatment in the location where such treatment is provided. However, "reasonable & customary" fee restrictions do not apply to the provision of certain coverage, e.g., prescription drugs, diagnostic procedures, orthotics, or orthopaedic shoes. - 16 - [33] Both parties pointed to this same paragraph to support their positions. The employer noted the explicit references to types of coverage, like prescription drugs, where RNC does not apply did not include any such reference to massage services. For its part, the union acknowledged that lack of specificity, but reminded us that the list of coverages where RNC does not apply was, on its face, not an exhaustive one. [34] Whatever the route to their agreement, the parties now do agree that RNC limitations do not apply to prescription drug coverage. But, since the award in the prescription drugs case, there has been no meaningful or relevant change to the collective agreement language. And despite the fact that RNC limitations are not explicitly singled out, referenced and excluded in the collective agreement language, the parties agree that these limitations do not apply. [35] Once again, the language related to paramedical services and, more specifically, massage is clearly different, but the shape of the interpretive exercise is virtually indistinguishable. Like prescription drugs, the Plan identified the covered expenses and included an RNC limitation. Like in the case of prescription drugs, the collective agreement provision identifies and describes the eligible expenses but includes no reference to RNC limitations. [36] It is difficult to see how the question regarding the continuing application of RNC limitations in these two cases would or should be answered differently in one case from the other. More specifically, it is difficult to see an interpretive path, which leads to the preservation of RNC limitations in the case of massage benefits, that is not inconsistent with the conclusion of the Board in the prescription drugs case. This is not a case for the application of the well-known Blake principle (and no one suggested it was). Yet, I am buttressed in the conclusion I have arrived at independently, in knowing that any possibility of inconsistent determinations of this Board is avoided. - 17 - [37] Having regard to all of the foregoing, I am satisfied that RNC limitations are not applicable in cases of claims for massage expenses. And, in view of this conclusion, it is not necessary for me to inquire into the propriety of the insurer’s introduction of a new RNC limitation based on a 30-minute massage session. [38] A final observation. The insurance company witness’s evidence sometimes characterized RNC limitations as largely invisible, as limitations always operating in the background, at the ready to be pressed into service in the interest minimizing insurer risk exposures. Her conception of the limitation was overly broad and in at least some instances, a questionable fit with some collective agreement provisions. But in the specific context of our case and that of massage benefits, where there is a $35 per visit cap, it is difficult to conceive of circumstances where, if it existed, an RNC limit of $110 for a one-hour visit or even $72.00 for a half hour visit would ever have any practical application or consequence. And yet, this case proves that legitimate expectation to be ill- founded. But that is the only because of a remarkable confluence of facts yielding an exceptional constellation. For the RNC limitation to have been even potentially relevant required all of the following: • That the claim be for a dependent child. (The union was not challenged in its assertion that had the very same claim been made for services rendered to the complainant rather than to her child, she would have received full payment) • That the covered bargaining unit employee have a partner. • That the partner have independent benefits coverage. • That the partner’s birthday be earlier in the calendar year than the employee’s. • That the partner’s independent coverage provide a greater benefit than that under the collective agreement (in our case, had the spouses each had identical coverage, each carrier would have paid their $35 maximum for a total of $70, RNCs, if they existed, would not be engaged; it is only because the spouse’s coverage was superior that the collective agreement insurer sought to pay less than the $35 maximum, relying on the RNC applying to the total amount paid cumulatively in both claims). - 18 - [39] Neither party provided any evidence or data regarding the actual or expected frequency of such a claim. There was no suggestion that similar facts had arisen in the past. It may well be that the facts of the instant case are a “one-off” or represent a possible configuration of facts unlikely to be repeated with any significant amount of frequency. In my experience, these parties and their representatives have a strong and mature bargaining relationship. Without relinquishing the interests of their principals, they are, far more often than not, able to fashion positive, fair and workable resolutions to collective bargaining problems. Those aspects of the parties’ relationship will, no doubt, endure. [40] Having regard to the foregoing, I have concluded that the RNC limitations found in the Plan with respect to massage benefits do not apply to claims for massage services. I remit the matter to the parties to dispose of in accordance with the term of my ruling. I will remain seized in the event they encounter any difficulties in that regard. Dated at Toronto this 19th day of July 2022 “Bram Herlich” ________________________ Bram Herlich, Arbitrator - 19 - APPENDIX – PARTIAL AGREED STATEMENT OF FACT PARTIAL AGREED STATEMENT OF FACT Joint Book of Documents – Tab 1 The Collective Agreement and the September 1997 Canada Life Supplementary Health and Hospital Insurance Plan 1. The present matter relates to a claim for massage benefits filed by the Complainant on behalf of her dependent son, AH. 2. Following Canada Life’s assessment of the claim on March 31, 2020 (detailed below), AMAPCEO filed a dispute on May 11, 2020, which was then referred to Independent Third Party Review pursuant to article 32.2.2.2 of the Collective Agreement. Per the regular practice of the parties, the Dispute was initiated through a Release of Information form, attached at Tab 2. A copy of an email between Canada Life and the Employer, copied to AMAPCEO, is attached at Tab 3. 3. The Parties agree that Arbitrator Bram Herlich is properly seized of this matter. 4. A copy of the benefits provisions (articles 31-36) of the 2018-2022 Collective Agreement is attached at Tab 4. 5. At all material times, Article 31.1 of the Collective Agreement, under the heading “Benefit Plans for Full Time Employees”, states: “Benefit Plans” in Articles 31-36 means … the Supplementary Health and Hospital Insurance Plan, (including vision and hearing aid coverage), … in force as of September 1, 1997 with the Great West Life Assurance Company or any successor Plan. 6. Attached at Tab 5 is a copy of SH&H Plan in force as of September 1, 1997 as between the Employer and the Great West Life Assurance Company (“GWL”), now the Canada Life Assurance Company (or “CL”) [hereinafter, the “SH&H 1997 Plan”]. AMAPCEO is not a signatory to this document or to any other contracts between the Employer and GWL or CL. 7. The SH&H Plan document has not changed since 1997, even though there have been changes to benefits that have been negotiated through collective bargaining. 8. Article 34.1 of the Collective Agreement provides, in part, that “[t]he Employer shall pay one hundred percent (100%) of the monthly premiums” for the SH&H 1997 Plan. - 20 - 9. Article 31.2 of the Collective Agreement states, in part: Subject to the provisions of this Agreement, the benefits contained in the Benefit Plans as they were constituted on September 1, 1997 shall be provided to full time employees on the same terms and conditions as were in place on September 1, 1997. These benefits and terms and conditions may only be altered by mutual agreement of the parties. 10. The “parties” referred to in Article 31.2 are AMAPCEO and the Employer. 11. The SH&H 1997 Plan document includes a section on “Healthcare Benefits” including “Paramedical Covered Expenses” (page 15). 12. Section D of the SH&H 1997 Plan document, in the Healthcare Benefits section defines “Paramedical Covered Expenses” as follows (page 20): "Paramedical Covered Expenses" means where permitted by law and to the extent that such services or portion thereof are medically necessary and are not covered by the Medical Care Insurance plan or the provincial government hospital plan of the employee's home province, reasonable and customary charges incurred for: out-of-hospital services of a legally licensed Chiropractor, Osteopath, Chiropodist, Podiatrist, Naturopath, Speech Therapist, Masseur or Physiotherapist who readers a service within the scope of his license. It is specifically provided, however, that benefits for such expenses shall not exceed $12.00 for any one such visit. 13. “Reasonable and customary charges” are defined in the SH&H 1997 Plan document [hereinafter referred to as “R&C Limits”]. The SH&H 1997 Plan document states, under the heading “Definitions” (see page 5, para. 15): “Reasonable and customary charges necessarily incurred” means charges for services and supplies of the level usually required for cases of the nature and severity of the case being treated, and which (a) in respect of services, are in accordance with the official fee schedule in the area, or are in accordance with representative fee practices and tariffs where there is no such fee schedule; (b) in respect of supplies, are in accordance with representative prices in the area. - 21 - 14. The SH&H 1997 Plan document also contains a “Provision for Co-ordination Between this Policy and Other Benefits” (the “COB provision”). The SH&H 1997 Plan, in Section C of the COB provision, under the heading “Effect on Benefits” states (page 26, para. 3): …[T]he benefits that would be payable under this Plan without this provision shall be reduced to the extent necessary so that the sum of all the benefits payable for such Allowable Expenses under all Plans … shall not exceed the total of such Allowable Expenses. 15. The SH&H 1997 Plan defines “Allowable Expenses” (at page 26, para. 3): "Allowable Expense" means any necessary, reasonable, and customary item of expense at least a portion of which is covered under at least one of the Plans covering the person for whom claim is made or service provided. 16. Article 31.5 of the Collective Agreement states: The benefits contained in the Benefit Plans are supplemented by the provisions of Articles 32 - 36. Where a conflict exists between the provisions of a Benefit Plan and this Agreement, the provisions of this Agreement shall prevail. 17. Prior to the 2001-2004 Collective Agreement, there was no language in the Collective Agreement referring to massage benefits. A copy of Articles 31-36 of the 1998-2001 Collective Agreement are attached at Tab 6. 18. In the 2001-2004 Collective Agreement, which was ratified and became effective on February 12, 2002, the parties added a number of new provisions related to benefits, notably articles 34.2 (e) – (h). A copy of articles 31-36 of the 2001-2004 Collective Agreement are attached at Tab 7. 19. The following language was added to the Collective Agreement, which became Article 34.2(e). (e) paramedical services include the following coverage per employee and each of their dependants: (i) the services of an acupuncturist, at the rate of thirty-five dollars ($35) per visit, to an annual maximum of twelve hundred dollars ($1200); - 22 - (ii) the services of a speech therapist, at the rate of forty dollars ($40) per half hour, to an annual maximum of fourteen hundred dollars ($1400); (iii) the services of a chiropractor, osteopath, naturopath, podiatrist, chiropodist, physiotherapist and masseur, if licensed and practicing within the scope of their license to a maximum of thirty-five dollars ($35) per visit for each visit not subsidized by OHIP and to an annual maximum of twelve hundred dollars ($1200) for each type of service. 20. Correspondence dated March 25, 2002 from Management Board Secretariat, Compensation Services Branch (Edwin Harrigan) to GWL and copied to AMAPCEO (Robert Stambula) is attached at Tab 8. 21. The text of Article 34.2(e) has remained the same to the present date. 22. The Employer and AMAPCEO jointly prepare “A Guide to Your Benefits For OPS Employees Represented by AMAPCEO”, revised January 1, 2015. This document is posted on AMAPCEO’s website and is also posted on the Employer’s intranet. A copy of this guide is attached at Tab 9. Facts Regarding the Claim at Issue 23. In February 2020, the Complainant’s dependent (her son, AH) incurred a $80.00 charge for a 30-minute massage therapy treatment provided by a registered massage therapist. 24. Both the Complainant and her spouse, DH, had family coverage for the massage therapy treatments under their respective group health insurance plans: DH, under Empire Life, and the Complainant through the benefits offered to AMAPCEO members 25. In accordance with insurance industry standards, the claim was submitted first to DH’s plan as the parent whose birthday (month and day) occurs earliest in the calendar year. 26. Empire Life, as the primary payor, assessed the claim, paid $45.00 of the claim and provided the Complainant with an Explanation of Benefits (“EOB”) statement that outlined how her claim was handled. A copy of the EOB statement from Empire Life, and a copy of the receipt from the massage therapist is attached at Tab 10. 27. On or about March 17, 2020, Canada Life received the Complainant’s EOB statement along with her necessary claim forms for further consideration of payment by Canada Life as the - 23 - second payor. Canada Life paid $27.00 towards this expense. A copy of the statement from Canada Life is attached at Tab 11. 28. In applying the COB provision as the second payor, Canada Life will say that it determined the amount payable by limiting the claim payment to the lesser of: a. The “pre-coordination benefit” (the benefit “payable under this Plan without [the COB] provision”): i.e., the benefit calculated as if Canada Life was the primary payor; and b. 100 per cent of the “Allowable Expense”: i.e., R&C Limit for a 30-minute massage therapy visit in Ontario REDUCED by the amount paid by the primary plan (being Empire Life). 29. In calculating the “pre-coordination benefit” as if it was the primary payor (see (a) above), Canada Life will say that it applies the lesser of: a. The charged amount for the visit ($80); and b. The R&C Limit for the 30-minute visit as determined by Canada Life in 2020 ($72). 30. Canada Life will say that this allowable expense of $72 was then subject to the “per visit” maximum of $35 (and that the annual plan maximum did not apply). Given that the R&C limit for the visit exceeded the “per visit” maximum, Canada Life would pay out the per visit maximum $35, if it had been the primary payor. 31. In calculating the Allowable Expense for this claim as the second payor (see (b) above), Canada Life applied the R&C Limit for the massage therapy visit ($72) and then REDUCED by the amount paid by the primary plan [being $45 paid by Empire Life], therefore amounting to $72 - $45 = $27. Since the “pre-coordination benefit” ($35: see above) exceeded the amount required to provide the Complainant with 100 per cent of the Allowable Expense of her claim ($27: see above), the Complainant received $27 from Canada Life (to bring her to 100 per cent of the Allowable Expense of her claim). 32. By letter dated March 31, 2020 (attached at Tab 12, Canada Life explained the foregoing assessment to the Complainant in its Appeal Decision. The letter stated: We received your appeal on our decision on your massage therapy claim. This letter explains how we assessed it. - 24 - Even though we understand the particular circumstances in this case, we must nevertheless make our assessment in accordance with the policy which provides that the payment under the secondary plan is limited to the lesser of the pre coordination benefit (in this case $35.00) and 100% of the reasonable and customary charge for the service reduced by the amount paid by the primary plan (in this case $27.00). Please take note that the benefits for [AH’s] 30 minutes massage therapy rendered on February 3rd, 2020 have been limited to customary charges of $72.00. We hope our letter helps clarify how we came to our decision 33. AMAPCEO does not contest that Canada Life processed the claim in the manner set out in paragraphs 28 to 31 above. However, AMAPCEO disagrees that R&C limits should have been used to limit the amount of reimbursement and asserts that the claim should have been paid up to the per visit cap of $35. The Employer disagrees with AMAPCEO’s interpretation of the Collective Agreement. 34. AMAPCEO asserts that it was not aware that Canada Life was applying R&C limits to massage claims. AMAPCEO is not copied on correspondence between Canada Life and the employee regarding Canada Life’s assessment of a claim. AMAPCEO asserts that it only became aware of the application of R&C limits to massage claims through the present case. 35. The parties agree that the $72 R&C limit that Canada Life applied to the Complainant’s massage therapy claim came into effect on January 1, 2020. Effective on that date, Canada Life increased the R&C limit for a one-hour massage therapy visit to $110 for a one-hour visit and added a R&C limit for 30-minute massage therapy visits at $72 per 30-minute visit. Facts Regarding the Complainant’s Pre-January 2020 Claims 36. The parties agree that the Complainant had also made massage therapy treatment claims in respect of her son prior to January 2020. In particular, the following claims were made: Date of Claim Total Fee (30 mins) Amount covered by DH’s Plan Amount covered by GWL/CL Total covered Total out of pocket June 26/18 $70 $42 $28 $70 0 Sept 6/18 $70 $42 $28 $70 0 Oct 4/18 $70 $42 $28 $70 0 Nov 12/18 $70 $42 $28 $70 0 Feb 7/19 $70 $42 $28 $70 0 Apr 8/19 $70 $42 $28 $70 0 June 18/19 $70 $42 $28 $70 0 Nov 6/19 $80 $48 $32 $80 0 Dec 4/19 $80 $48 $32 $80 0 - 25 - 37. Canada Life asserts that it administered all the above noted claims as the second payor in accordance with and subject to the terms and conditions of the SH&H Plan, as supplemented by the Collective Agreement.