Company did nothing wrong by changing insurance carriers

Worker with MS thought previous carrier had better LTD coverage, but company changed carriers with employee input and didn’t know worker had the disease

An Ontario court has ruled that a company did nothing wrong when it changed its insurance carrier to the perceived disadvantage of a worker with Multiple Sclerosis (MS).

Eugenia Stancu joined engineering firm The ECE Group in June 1998. As part of her benefits package she received short- and long-term disability coverage. The benefits were funded by the company under a group insurance policy provided by Aetna Canada.

In October 1998 Stancu learned she had MS but she continued to work full-time. In June 2000 company employees, by a majority vote, changed their long-term disability (LTD) carrier from Aetna to UnumProvident.

In October 2000 Stancu told the company she had MS, and in February 2001 it was agreed she would work a four-day week. In a followup letter she acknowledged the request and the fact her benefits would be adjusted accordingly.

In June she asked to be returned to full time, in part because she feared working the reduced week would preclude her from getting disability benefits should her illness worsen. The request was denied because Stancu’s doctor had recently said she could only work four days a week.

On Aug. 28, 2001, Stancu filed a claim for LTD benefits. Three days later, the five people in her department were advised their employment would be terminated effective Dec. 31, 2001. That was also the date when all benefits provided by the company would end.

In September Stancu filed a claim for short-term disability benefits, which UnumProvident paid up to Dec. 31, her last official day of employment. In February 2002 she filed a claim for long-term benefits, which UnumProvident paid — based on a 30.5 hour week — for the period ending on April 4, 2002 — the date Stancu’s doctor said she was able to return to work.

Stancu filed a suit against ECE and UnumProvident. She said switching of insurance carriers to UnumProvident wrongfully deprived her of the superior LTD coverage of the Aetna policy.

The Ontario Superior Court of Justice ruled against Stancu. It was not clear Aetna’s coverage was more advantageous to Stancu than UnumProvident’s, it said. In any case the decision to change LTD carriers was made, before the company was aware of Stancu’s illness, by a majority vote of the employees. There was nothing improper about the proposal to change the benefits package and no breach of the employment agreement.

For more information see:

Stancu v. E.C.E. Group Ltd.

, 2005 CarswellOnt 4893 (Ont. S.C.J.)

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