Termination of Benefits for Employees over 65

March 11, 2015

The number of workers over the age of 65 has risen significantly in recent years.  The increasing number of older employees who are choosing to remain in the workplace, combined with the (near) elimination of mandatory retirement, has raised many considerations that employers have not previously addressed. One such consideration is the termination of benefits after an employee reaches the age of 65. While most employers routinely terminate benefits at age 65, the changing workforce demographic has created a demand for benefits coverage for older workers. Unfortunately, it is difficult to provide benefits to employees past the age of 65 because insurers either will not provide the coverage, or will only do so at a cost that is unacceptable to the employer. This has created conflict between some employers and employees, and has led to legal challenges.

In Ontario, the Human Rights Tribunal ruled in Kartna v Toronto (City), [2014] OHRTD No. 387 that the termination of long-term disability benefits for workers over the age of 65 does not infringe the Ontario Human Rights Code (the “Code”). In that case, a unionized employee filed a complaint alleging that the termination of his LTD benefits when he turned 65 was discriminatory on the basis of age. The Tribunal upheld prior case law which established that under the Code and the Ontario Employment Standards Act (“ESA”), differential treatment on the basis of age in respect of group insurance is permitted if the person is over 65. This is because Section 25(2.1) of the Code provides that the right to equal treatment is not infringed by a group insurance plan that complies with the ESA, and the ESA only prohibits discrimination in respect of a benefit plan on the basis of age if the person’s age is more than 18 years but less than 65 years. Therefore, the ESA and the Code do not prohibit discrimination in respect of a benefit plan on the basis of age if the person is 65 years of age or older.

Other provinces in Canada have similar exceptions in their human rights legislation. For example, Section 6(g) of the Nova Scotia Human Rights Act provides that the prohibition on discrimination in Section 5(1) does not apply to “prevent, on account of age, the operation of a bona fide pension plan or the terms or conditions of a bona fide group or employee insurance plan”.  While these provisions provide some protections to employers, it is likely that employees will continue their efforts to secure benefits after the age of 65. Moreover, there is some question of the constitutionality of the exemptions in human rights legislation. For example, in Ontario, the question of whether the exemption violates the Canadian Charter of Rights and Freedoms is currently before the Human Rights Tribunal in Talos v Grand Erie District School Board. This issue is likely to evolve significantly in the coming years and employers would be well advised to stay abreast of changes in this area of the law.

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