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Terminating Benefits At 65 Is A Slippery Slope

We’ve seen a massive shift in our collective attitudes towards equal rights in the workplace, but ageism is one area where we are seriously falling behind, and it can have a detrimental impact on our society.

Pushing retirement and removing benefits are just twin elements tied into these archaic rules that haven’t been updated to reflect the new workplace.

We need to stop viewing age as a liability – and more as an asset.

Why are many employer plans still using “65” as a criterion for ending insurance contracts?

In 2006, Ontario passed a law that effectively ended the ability of employers to terminate workers when they turned 65. However, through loophole’s in the system, the province’s Human Rights Code and Employment Standards Act still allows employers to cut workers off benefits and not be concerned about a discrimination claim on the basis of age.

All of that is about to change, and companies will soon find themselves on the wrong side of history should they continue down that path.

Talos vs. The Grand Erie District School Board 

Brantford teacher, Steve Talos went toe-to-toe with the Grand Erie District School Board after they cut off his health, dental, and life insurance benefits when he turned 65.

The Human Rights Tribunal of Ontario voted in favour of Mr. Talos and called it a violation of the Charter of Rights and Freedoms, essentially determining that section 25(2.1) of the Code “did breach the equality guarantee of the Charter by permitting lower compensation to older workers.”

This decision is monumental and could open the floodgates to further lawsuits towards employers who still try to lean on the Human Rights Code and Employment Standards Act to clip their employee’s benefits out from underneath of them.

Have there been legislative changes to stop discrimination of benefits?

The Ontario Human Rights Commission has recommended legislative changes to stop discrimination of benefits for active employees at 65, but so far nothing has gone through.

However, legislative changes could be on the way with the recent decision by the Human Rights Tribunal of Ontario, because it has exposed this glaring loophole that companies are taking advantage of to be able to get away with what is essentially age discrimination. Age, including assumptions based on stereotypes about age, should never be a factor in decisions about lay-off or termination of employee benefits.

A deeper look at the numbers

According to a report from Statistics Canada in 2015, there are more than 400,000 full-time and almost 300,000 part-time Canadians working past the age of 65 – a figure that was already up almost 300% from 1990.

A recent survey of 170 Canadian employers indicates:

  • 25% of employers no longer provide health and dental coverage for active employees past the age of 65,
  • Only one-third of employers have developed any formal policies regarding employee health coverage past 65.

4 areas on where I think this will change

Many health and employment policies have not kept up with the reality of the changing demographics – and to be perfectly frank, it’s not against the law. I think this court case with the human rights called into question is the first of many big changes in the following areas.

  • Disability Insurance: My prediction is that you’re going to see disability as a primary example of someone taking it all the way to the Supreme Court and go to war. I predict that long-term disability will be for a fixed period (2 years, 5, years, 10 years) rather than to age 65, and insurance companies will have no choice but to remove that “to 65” option.
  • Life Insurance: This depends on the insurance company and how they set it up, because a lot of them claw back to 50% when an employee turns 65. Some will terminate the remainder at 70 and others at 75. I know that more people are going to contest that and show they’re working well past the age of 65 and understandably need their life insurance coverage just as they did in their early 60’s. The cost of life insurance isn’t even a huge thing. It obviously depends on how much coverage they have, but a large company might only have a handful of people north of 65, so it’s not a big cost savings thing.
  • Health and Dental: You can extend it with a couple of insurance companies past 75 – 85, but a lot of them stop it at 75.

There have been a lot of other court cases saying this has been discriminatory, (for example, not being able to get medical cannabis,) but “Talos vs. Grand Erie District School Board” is the first big case that I know of – and it’s set to change the entire landscape.

Ageism and archaic rules are still invisible issues with tangible effects

So if price isn’t a determining factor, then why are we still dead set on using the age of 65 as this anchor to justify if a person is still a competent worker? And if you enjoy your work and are really good at it, why do we need to force someone into retirement and leave them financially exposed by pulling their benefits?

It should never be about age; it’s about what you know, how well you know your product, and your level of service for your clients and key stakeholders. In order to combat ageism in our society, we need to stop beating home this message that older workers are essentially of lesser worth and value than their younger co-workers. If someone has a certain set of skills that are relevant and useful, why would they not be viewed as a valuable resource to a company?

It’s time we start viewing the elderly more as an asset than as a liability.

The modern workplace is evolving, and the whole concept of “mandatory retirement at 65” is the only thing that needs to be given a gold watch and sent packing.