Two more agencies that provide services to people with developmental disabilities have filed suit against the B.C. government for allegedly mishandling employee benefit plans.
The Fort St. John Association for Community Living and the Vernon and District Association for Community Living join three other agencies already suing the government and trustees of the Healthcare Benefit Trust.
The organizations are among more than 50 that have banded together to take on the government and the non-profit trust. The dispute revolves around a deficit racked up by the Healthcare Benefit Trust, which administers health and welfare benefits for thousands of employees in the health and social sectors across B.C.
Community living agencies pay premiums to the trust, which pools the money and uses it to cover claims by the agencies’ employees. The trust posts a deficit when it pays out more money for claims than it has in the pool.
The trust has a number of pools, but the one for community social-service agencies has had a deficit for a number of years due to a rise in long-term disability claims. The shortfall fluctuates, but at one point last year hit $14 million.
The trust has been imposing a surcharge on member agencies in order to pay down the deficit. In addition, organizations that withdraw from the trust face exit levies that purportedly represent their share of the shortfall.
A number of agencies, however, have left the trust and refused to pay the levies. They dispute that they are responsible for the deficit, arguing that government forced them to join the trust as part of a mediated labour settlement in 1999.
“We just feel that it wasn’t our debt,” said Cindy Mohr, executive director of the Fort St. John Association for Community Living. “We didn’t have a choice in going to HBT and … with any uninsured plan there should be enough premiums to cover any liability that ensues.”
Mohr said the agencies decided to pursue legal action after negotiations with the province failed to resolve the dispute.
The lawsuits allege that the government interfered in the running of the Healthcare Benefit Trust and caused fees to be set so low that they failed to cover a rise in long-term disability claims. The agencies also argue that their expenses are covered by the province — and since the government benefited from the low rates and would have paid any surcharges, it should pay the exit levies, too.
The lawsuit further notes that the exit levy for the Fort St. John association increased from $67,000 in 2010 to $79,000 in 2011 without explanation.
The government and the trust have yet to file statements of defence, but both have argued that the agencies are contractually required to pay the levies and knew they would be on the hook for any shortfalls.
The government also says it has arranged for agencies to pay back the exit levies over 10 years so as to lessen the impact.
“This is a plan that ensures that the financial integrity of the trust is protected for those who benefit from it, primarily on long-term disability, and at the same time ensures no impact on services,” the government said Tuesday in a statement.
The trust also supports the repayment plan. “HBT must continue to act in interests of the trust, our member agencies, and on behalf of those employees with disabilities who are entitled to receive … benefits,” it said in a statement.
