PSAC Grievance on Canada Life Healthcare Transition Advances

The Public Service Alliance of Canada (PSAC) has confirmed that its grievance regarding the transition of the Public Service Health Care Plan to Canada Life will proceed to a hearing. This decision follows the union’s assertion that the transfer, which affects over 1.5 million public servants and their families, violated the collective agreement and workers’ rights.

The grievance was filed in February 2024, shortly after the administration of the health plan transitioned from Sun Life Financial to Canada Life on July 1, 2023. Since the switch, numerous public servants have reported significant issues with claim submissions and accessing necessary coverage. Complaints included difficulties reaching call centre agents and unexpected loss of coverage for vital medications.

According to PSAC, the independent board responsible for handling such disputes has ruled in favour of allowing the grievance to move forward. In a recent news release, PSAC stated, “This ruling means PSAC can keep pushing for accountability and real solutions for members who have been affected.”

The Public Service Health Care Plan provides optional coverage to approximately 1.7 million federal employees, retirees, and eligible dependants. With the change in administration, many public servants, particularly those living abroad, faced confusion over claims submissions to MSH International Canada, a subcontractor of Canada Life. Reports indicate that some individuals accrued thousands of dollars in unpaid medical claims due to challenges accessing the online portal or contacting MSH International.

A report from a federal committee on government operations in June 2024 recommended that the government provide compensation to employees who experienced financial losses due to the transition. While individual claim denials will be addressed through a separate appeal process, PSAC asserts that “broader failures in how the plan is run” can be contested through the grievance.

The union has accused the government of “poor management” during the transition, claiming it breached the collective agreement by failing to uphold workers’ rights to a functional health care plan. PSAC further argues that the government has violated the human rights of workers based on factors such as disability, family status, age, sex, and gender identity and expression.

In response to these claims, PSAC is seeking a declaration from the government acknowledging the violation of the collective agreement. The union is also pursuing compensation for affected members, which includes damages for financial losses and general damages for stress and suffering.

The case will be heard by the Federal Public Sector Labour Relations and Employment Board, an independent quasi-judicial tribunal that oversees collective bargaining and grievance resolution within the public sector. PSAC anticipates that the hearing will be scheduled in the upcoming months, allowing for a more thorough examination of the grievances raised by its members.