Accident Benefits were sold as accessible consumer protection legislation read generously in favour of the injured. However, increasingly we are seeing a limiting of the availability of benefits specifically in the way in which the injured is entitled to incur a benefit.

A most recent commentary came via the Divisional Court decision in Malitskiy v. Unica Insurance Inc., 2021 ONSC 4603.

Before discussing the decision a few basics about how Attendant Care is applied for via a Form 1. The Form 1 is the form used to apply for Attendant Care. The form is broken into three different “levels” of care i.e. part 1, part 2 and part 3. Each level of care has a corresponding dollar amount that is used in the calculation of the monthly amount of Attendant Care available. The dollar amounts are as follows as of today:

Part 1 – $14.90

Part 2 – $14.00

Part 3 – $21.11

The monthly attendant care is calculated by multiplying the hourly rates referenced in the specific part with the weekly allotment of hours in that part. You then add the three parts to obtain your Form 1 monthly amount.

The relevant rates in Malitskiy were:

Part 1 – $13.19

Part 2 – $10.25

Part 3 – $19.35

The decision of the Divisional Court is in the context of an accident that occurred on March 16, 2014 when the injured Malitskiy sustained significant physical, psychological and cognitive injuries including a traumatic brain injury and multiple fractures. The injuries were deemed catastrophic by the insurer.

The initial LAT decision ruled that Malitskiy was entitled to a maximum benefit of $6,000.00 per month of attendant care. The decision was overturned by Reconsideration at the LAT and was then heard by the Divisional Court earlier this year. The issue in dispute was not how many hours of care were required, this was an issue of how to incur the approved benefits.

The insurer argued that the initial attendant care decision was wrong as the actual number of hours worked was less than the Form 1 hours stated.

Prior to the decision in Maltsiy, the insurer was obligated to pay the monthly amount from the Attendant Care Form 1. This approach was routinely followed and supported by many court decisions including the Court of Appeal in Belair v. McMicahel which upheld the reasoning offered by Director’s Delegage Makepeace whom held:

 

Belair submits that the word “incurred” indicates that attendant care benefits provide indemnity coverage only, and therefore no benefits are payable for any period when the service was not obtained or the expense incurred. However, the accident benefits scheme is consumer protection legislation, and this sometimes requires “bright-line boundaries” that produce anomalous results in certain circumstances. Belair’s position has serious implications for the claims process. Kennelly illustrates the problem: if benefits for a given period are not payable unless the services were received, the insurer stands to benefit from refusing to pay for services claimed, whether for medical, rehabilitation, attendant care, housekeeping or other services…

The Divisional Court ruled in Malitskiy that the hourly rates prescribed in the Form 1 are the maximum rates to be paid by the insurer.

Application of the Divisional Court ruling:

This decision forces more process on an injured person and requires more record keeping and submissions to the insurer. This really gives the insurer more “ammunition” to simply deny claims when adjusted in bad faith. At the end of the day, it denies care for the particularly injured and the particularly poor who cannot make up for the gaps in support.

It is virtually impossible to hire someone for $14.00 an hour. These rates are below minimum wage. The insured has no right when purchasing their policy to negotiate the rates. As a result, many accident victims would hire an attendant for less hours listed in the Form 1 at higher rates, than would be reimbursed the total monthly cost of the Form 1.

Is it fair to have an insurer only obligated to pay rates that are below minimum wage? Is it fair to have the gaps in support funded by the injured accident victim?

I say this in the context of the following facts related to Attendant Care since I started my practice in 2004:

1. The maximum monthly amounts available to an insured have never increased.
2. The definition of “incurred” has drastically changed to disallow families from performing the care and being paid to restricting care being provided by a professional or a family member who has sustained a corresponding income loss.
3. COVID has reduced the amount of attendant care services being obtained due to fear of exposure.
4. Less supports for care available through government agencies such as CCAC.
5. Significant reduction of the amount of attendant care available in a standard policy of insurance by approximately half in the case of the Catastrophically injured unless optional benefits are purchased.

The consequences of the decision can be devastating to an injured victim with little means of support. The decision essentially forces an accident victim to pay market rates for attendant care that they know will not be fully covered by their insurer.