The largest federal public sector union has secured a critical step in its fight over the botched transfer of the Public Service Health Care Plan to a new administrator. The Public Service Alliance of Canada (PSAC) announced this week that a policy grievance it filed will move forward to a hearing.
Grievance Targets Plan Transfer Failures
PSAC filed the grievance in February 2024, arguing that the federal government's handling of the transfer violated the collective agreement and workers' rights. The shift moved administration of the plan for more than 1.5 million current and former public servants and their families from Sun Life Financial to the Canada Life Assurance Company on July 1, 2023.
The federal board that adjudicates such disputes has now ruled that the union's case can proceed. "This ruling means PSAC can keep pushing for accountability and real solutions for members who have been affected," the union stated.
Persistent Problems Plague Members
Issues began almost immediately after the switch. Public servants reported widespread difficulties with filing claims and accessing their coverage. Problems included:
- Inability to reach call centre agents.
- Sudden loss of coverage for critical medications.
- Major confusion for members living abroad dealing with subcontractor MSH International Canada.
The troubles were not short-lived. More than a year later, many members, particularly those overseas, still faced hurdles. Some accrued thousands of dollars in unpaid medical claims while struggling with online portals and unresponsive services.
Seeking Compensation and Systemic Fixes
While individual claim denials are handled through a separate appeals process, the union's grievance targets the "broader failures in how the plan is run." PSAC contends that the "poor management" of the transition breached the collective agreement by failing to provide a functioning health care plan.
This development follows a June 2024 report from the federal government operations committee, which recommended the government compensate employees for financial losses suffered due to the changeover. The upcoming grievance hearing represents a formal, legal avenue to pursue that compensation and demand systemic corrections for the plan's administration.
