April 24, 2017, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
16-000726 v Aviva: Entitlement to Income Replacement Benefits several years after accident; is applicant barred from applying for benefits; is an EOB considered a denial of benefits; MIG; PAF; when does clock begin to run;
Date of Decision: February 13, 2017
Heard Before: Adjudicator Brian Norris
DECISION ON A PRELIMINARY ISSUE
- Should this application for an IRB be dismissed as it was filed more than two years after the insurer’s refusal to pay the benefit claimed, in accordance the Schedule?
- Should this application for an IRB be dismissed because G.P. failed to apply for benefits within 104 weeks of the accident pursuant to section 4 (1) 1 of the Schedule?
- The application for an IRB should be allowed to proceed. The Explanation of Benefits dated October 19, 2006 was not a denial of benefits and did not start the two year limitation period. There is no requirement in s. 4(1)1 that G.P. apply for an IRB within 104 weeks of the accident. Regardless, G.P. made her original claim for an IRB within 104 weeks of the accident.
G.P. was injured in an accident on August 31, 2006, and she received an IRB until her return to work on September 30, 2006. On October 19, 2006, Aviva sent an Explanation of Benefits that acknowledged G.P.’s eligibility for an IRB and advised G.P. that
“the Insurer is not required to pay an income replacement benefit, for the first week of the disability (Wait Period Aug 31/06 to Sept 06/06) and for any period longer than 16 weeks (Until Dec 20, 2006) after the accident, in the case of an insured person whose impairment comes within the Grade II Whiplash Guideline, if the accident occurred after April 14, 2004”.
Aviva also included a standard form which advised G.P. of her rights to dispute. On November 26, 2015, more than nine years after G.P. had returned to work, she advised Aviva that she is completely disabled and unable to work. She provided Aviva with a medical opinion, which supports her position that she is unable to work, and made a claim for reinstatement of her IRB. Aviva denied the reinstatement of the IRB, advising G.P. that it was “unable to give any further consideration to [G.P.’s] income replacement benefit claim as per our OCF-9 dated October 19, 2006”. Aviva also requested the production of various medical documents in an effort to “properly address [G.P.’s] accident benefit claim”.
Unable to resolve the dispute, G.P. filed for mediation with the FSCO. Mediation was unsuccessful and G.P. filed an appeal with the LAT.
The parties requested that the Tribunal decide as a preliminary issue whether G.P. can proceed with her application for IRB as it is limitation-barred, or because she did not make her application for IRB within 104 weeks of the accident. The Arbitrator heard no evidence regarding G.P.’s entitlement to an IRB, and make no finding on the merits of her claim which is a matter for the hearing adjudicator to decide.
G.P. takes the position that:
- The EOB that Aviva relies on as a denial of the IRB does not terminate the benefits, it only calculates benefits; and
- G.P. submits that, until her request for reinstatement in November 2015, she did not make a claim for IRB beyond September 30, 2006, therefore there is no claim for Aviva to deny.
Aviva takes the position that:
- The EOB was a denial of G.P.’s claim for IRB in 2006. The application must be dismissed for failure to dispute the denial within the 2-year limitation period in accordance with s. 51 of the Schedule; and
- In the alternative, Aviva submits that the application must be dismissed as G.P. made a new claim for IRB in November 2015, which was not made within 104 weeks of the accident as required by s. 4(1) 1 of the Schedule.
Was the appeal filed outside of the two-year limitation period?
The Arbitrator reviewed the law and the evidence and noted that, the two-year limitation period starts when an insurer provides an insured with a refusal to pay which is clear, unequivocal, and advises the insured of their appropriate dispute resolution options.
Aviva relies on the EOB dated October 19, 2006 as a valid refusal to pay the benefit claimed. It submits that G.P. is barred from commencing this proceeding as it has been more than two years since Aviva refused to pay the benefit claimed. G.P. argues that there was no claim for benefits for Aviva to deny. She submits that there is no claim for an IRB beyond September 30, 2006 until her letter dated November 26, 2015. It is G.P.`s position that the EOB Aviva relies on as a denial does not terminate benefits, but instead calculates benefits.
It is notable why Aviva advised G.P. how long she may be eligible for an IRB. The period of eligibility is based on the statutory entitlement prescribed by the Schedule which applies to injured persons who fall within the Pre-Approved Framework Guideline (PAF). In the case of a Grade II Whiplash Associated Disorder, which G.P. was initially diagnosed with, the maximum period of entitlement is capped by statute at sixteen weeks.
The PAF is a characterization of impairments from a previous version of the Schedule which is much like the Minor Injury Guideline of today. It was reserved for soft tissue injuries, and granted a statutorily defined set of benefits for insured persons found to be in the PAF. Unlike the Minor Injury Guideline, the PAF granted an insured person IRB.
Aviva relies on the PAF as a denial of IRB entitlement beyond December 20, 2006. By doing this, Aviva contends G.P.’s impairments as falling within the PAF, and advising G.P. of the statutory limitation of G.P.’s IRB to 16 weeks by the Schedule, constitutes a clear and unequivocal denial of G.P.’s claim for IRB beyond December 20, 2006.
The Arbitrator disagrees for the following reasons.
- The characterization of G.P.’s impairments as being within the PAF was a determination of G.P.’s entitlement to benefits. The limitation of those benefits was by operation of the Schedule, not a decision by Aviva to terminate those benefits at the end of 16 weeks. It is well established that the Schedule is consumer protection legislation. A lay person would not read the EOB as an unequivocal denial of benefits, but as statement of entitlement. This is particularly so for G.P. whose application for reinstatement of IRB disputes that her case is one of “an insured person whose impairment comes within the Grade II Whiplash Guideline”.
- Should G.P. be successful in her claim that her impairments are outside the PAF, she would not be bound by the statutory limits which were based on the initial characterization of her impairments. Aviva has an obligation to continuously adjust the file and must consider G.P.’s claim that her impairments take her out of the PAF. The Arbitrator took the view that the limitations clock starts with Aviva’s December 18, 2015 denial of G.P.’s claim that she is entitled to benefits beyond those granted by the PAF.
On this basis the Arbitrator found that the EOB dated October 19, 2006 is not a clear and unequivocal denial of G.P.’s claim for IRB. The Arbitrator also determined that there is no requirement in the Schedule which dictates that, in order to collect an IRB, an insured person must apply for an IRB within 104 weeks of the accident. The Schedule only requires that the insured person must have suffered a substantial inability to perform the essential tasks of her employment within 104 weeks post-accident. The legislation is silent on when an applicant must apply for an IRB, and the Arbitrator rejected Aviva’s submission on this basis.