The lawyers at Aaron Waxman & Associates are experienced with Disability, Personal Injury and Employment claims.
One of the significant changes in the new Statutory Accident Benefits Schedule (SABS), coming into effect on September 1, 2010 is a definition of incurred expenses. The definition relates to housekeeping and home maintenance, caregiver and attendant care expenses. These benefits are available to injured claimants who meet a certain injury threshold or have purchased optional insurance benefits.
The regulation reads as follows:
S. 3 (7) For the purposes of this Regulation,
(e) subject to subsection (8), an expense in respect of goods or services referred to in this Regulation is not incurred by an insured person unless,
(i) the insured person has received the goods or services to which the expense relates,
(ii) the insured person has paid the expense, has promised to pay the expense or is otherwise legally obligated to pay the expense, and
(iii) the person who provided the goods or services,
(A) did so in the course of his or her regular occupation or profession, or
(B) sustained an economic loss as a result of providing the goods or services to the insured person;
This differs from the previous regulation in that there was no specific definition of incurred expense and it explicitly stated that an aide or attendant could be a family member or friend with no special qualifications. Many claimants would use a friend or family member especially if the insurer was refusing payment as they could not afford to hire a professional and were uncertain if they would recover from the insurer.
That situation still exists so again many claimants are reluctant to hire a professional and risk being out of pocket a significantamount of money.
The important question then becomes what constitutes an economic loss. This is not defined in the regulation and it is anticipated that claimant’s lawyers and insurer’s counsel will take widely different views on its interpretation. For example, insurance companies are interpreting economic loss as time missed from work or some other significant loss. Claimant’s representatives are taking the position that economic loss is a broad term and could include transportation expenses to travel to the claimant’s home, the cost of cleaning or other supplies, an unemployed person who may not have as much time to actively seek employment because they are providing assistance, etc. Until a test case goes before an arbitrator both sides will likely stand their ground.
Under the previous regulation it had also been determined in the McMichael v. Belair cases that an expense is incurred even if the service is not performed. It was sufficient that the expense would have been reasonable and necessary and that it could be quantified.
Interestingly the new SABS partially addresses this issue in Section 3(8):
(8) If in a dispute to which sections 279 to 283 of the Act apply, a Court or arbitrator finds that an expense was not incurred because the insurer unreasonably withheld or delayed payment of a benefit in respect of the expense, the Court or arbitrator may, for the purpose of determining an insured person’s entitlement to the benefit, deem the expense to have been incurred.
It remains to be seen whether the use of the term “unreasonably withheld” modifies the findings in McMichael. The wording in the regulation raises the question of whether the claimant must first incur some expenses in order for payment to be unreasonably withheld. As the new regulation defines incurred this may override the McMichael decisions.
The bottom line is that clients who are making housekeeping, caregiver and attendant care claims need to be aware of the criteria for who can provide these services and what steps they must take to ensure they receive the benefits they are entitled to. However, until the Financial Services Commission of Ontario has made a decision with regards to these issues it seems likely the insurers will continue to deny claims where the provider is not a professional or missing time from work.
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Disability & Personal Injury Blog