'It's at a crisis point': Dubious insurer practice of paying less than Ontario minimum wage appears to be spreading

Ontario’s insurance regulator says a major insurance company was just wrong when it told a man grievously injured in a hit-and-run to find caregivers to work for less than minimum wage.

But even as the Financial Services Regulatory Authority of Ontario warns insurers that the dubious practice is against the rules, it appears to be taking hold in many cases anyway, as critics say the companies are putting profits first.

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“It’s not right,” said Tom Rakocevic, the NDP’s insurance critic. “The government needs to step in and these guidelines need to reflect what PSWs earn and what they deserve. There’s no excuse for insurance companies to do this — they are making record profits,” he said.

And lawyer David MacDonald of law firm Thomson Rogers told CTV News he believes the regulator should go further, and prosecute the company, Economical Insurance, for its behaviour in denying coverage to what he called deserving applicants.

“It has a responsibility to address insurance conduct,” MacDonald said. “The regulation is called unfair or deceptive acts or practices.”

Rakocevic and MacDonald were responding to a CTV News Toronto investigation into how 59-year-old Alan Weymouth was unable to get certain accident benefits despite almost a year having passed since he was maimed in a hit-and-run collision last march.

Weymouth can’t walk or do basic tasks after his femur was shattered. But he doesn’t have a personal support worker, he says, because his insurance company, Economical Insurance, has insisted that he pay $14 an hour.

“It’s sad,” he said in an interview. “They shouldn’t be able to get away with treating people like that.”

In a statement to CTV Toronto, the regulator said Economical's approach does not line up with its guidelines.

Alan Weymouth is seen in this undated image.

“The insurer would be incorrectly interpreting the statutory accidents benefits schedule,” said FSRA spokesperson Russ Courtney in a statement to CTV News.

“FSRA’s guidelines do not set an hourly wage,” he said, encouraging those affected by this practice to file a complaint with FSRA.

Accident benefits are typically available quickly so that people injured in crashes don’t have to wait for court settlements, and the regulator has guidelines about how much to pay.

At first glance, the rates are $14.90 per hour for routine personal care, $14.00 for basic supervisory functions, and $21.11 for complex health care and hygiene.

But a guideline issued by FSRA’s predecessor agency said a health-care worker should figure out how many hours are necessary, and the company should multiply that by the hourly rate to get a monthly total that could be applied to any company or any rate.

Several insurance companies are apparently ignoring the guideline, and limiting the care only those who work for less than the guideline, which makes finding anyone to actually provide care impossible, observers said.

“It’s at a crisis point where accident victims are not getting the treatment, not getting the attendant care they deserve because insurance companies have misinterpreted the law and focused on their profits as opposed to the people who they are supposed to help,” said Nainesh Kotak, the chair of the Long-Term Disability Section of the Ontario Trial Lawyers’ Association.

Finding a worker is especially difficult in an environment where health-care workers are in such high demand after the pandemic, said Laurie Davis of the Ontario Rehabilitation Alliance.

“Very often the provider has to say to the insurer we cannot provide care at this amount,” she said. “It’s frustrating and heartbreaking.”

Economical Insurance had said in a statement to CTV News that it was just following the rates set by the government regulator.

But after the regulator’s statement, it referred questions to insurance industry lobby group, the Insurance Bureau of Canada.

“Ontario’s insurers are focused on delivering immediate benefits to help those injured in collisions recover as quickly as possible through their no-fault accident benefits,” the IBC said in a statement.