Eleven more agencies that work with vulnerable people are severing ties with the Healthcare Benefit Trust, setting the stage for a legal battle with the B.C. government.
Community Living Victoria, which provides services to adults with developmental disabilities, is among those slated to leave at the end of December over concerns about the trust’s deficit.
“There’s something going on that’s just not right, and we don’t want to be left holding the bag,” said board president Carlene Thompson.
The agencies plan to join forces with dozens of other community service organizations that have quit the non-profit trust in recent years.
The organizations are refusing to pay “exit levies,” representing what the trust says is their share of a deficit in its pool of community service organizations. The deficit fluctuates, but was more than $14 million at the end of June, according to the most recent figures released by the trust.
Community Living Victoria says its alleged share of that shortfall tops $400,000 and has been rising.
“The risk of staying totally outweighed the risk of going,” Thompson said. “Whether we end up having to pay or not, we had to get out when we could.”
Karl Egner of Kardel Consulting Services Inc., which is also pulling out of the trust, said about 60 agencies have signed on with law firm Heenan Blaikie and plan to fight the levies in court if necessary.
“Continuing to discuss [the issue] with government was getting us nowhere,” said Egner, whose company was hit with an exit levy of $350,000.
The agencies claim the provincial government should cover the deficit since it forced many of them to join the non-profit trust as part of a negotiated labour deal in the late 1990s.
“We truly don’t believe that it is our debt in the first place,” said Brenda Gillette, executive director of the Chilliwack Society for Community Living, which departs with an exit levy of more than $500,000.
The agencies say the trust caused the deficit by setting its premiums so low that the money coming in failed to cover the payments going out for long-term disability claims. They argue that government should cover the resulting shortfall since it pays the bills and saved money on the low premiums for years.
But government and the trust both say the agencies signed contracts and knew they would be on the hook for any shortfall.
The trust also argues that it’s unfair for departing agencies to leave their disabled employees behind and expect somebody else to look after them.
“The obligation for agencies who leave the trust to pay an exit levy is in place to protect the disability benefits of the trust’s remaining members and is considered a vital obligation,” Social Development Minister Moira Stilwell said in a statement. “This obligation has been communicated consistently over the past several years.”
The government notes it has arranged for agencies to pay exit levies over 10 years so as to lessen their impact and protect services to vulnerable people.
“This is a plan that is fair to taxpayers, while ensuring that the financial integrity of the trust is protected for those who benefit from it, like those on long-term disability,” Stilwell said.
The Healthcare Benefit Trust issued a statement this week noting membership has always been voluntary and that agencies can leave at their convenience.
“All membership terminations are approved by the HBT trustees and are subject to all the contractual obligations within the trust agreement that ensure beneficiaries of the trust continue to receive benefits they are entitled to such as long-term disability benefits,” the statement said.
© Copyright 2013