A recent arbitration decision from the Financial Services Commission of Ontario (FSCO) has concluded that an accident benefits insurer has an obligation to ensure that a graduated return to work is possible before terminating income replacement benefits.
In the decision Nader and State Farm [FSCO A13-003230], Javed Tabey Nader was injured in a motor vehicle accident and was unable to return to his pre-accident job. His accident benefits insurer, State Farm, sent him to insurer’s examinations and the assessors concluded that he could participate in a graduated return to work program. State Farm then notified Mr. Nader that they were discontinuing his income replacement benefits after the period that the insurer’s assessors concluded that the graduated return to work would be completed.
No one from State Farm ever checked to see if Mr. Nader’s employer was able to accommodate a graduated return to work, which it could not. Moreover, when State Farm was advised that Mr. Nader did not return to work, State Farm did not find out why this did not happen and simply maintained their denial.
Arbitrator Bujold concluded that Mr. Nader was entitled to income replacement benefits for the first two years of his accident benefits claim and made the following comments with respect to a special award of $5,000.00:
Dr. Armitage’s opinion that Mr. Nader could return to work was premised on the availability of a graduated return to work program, and the provision of active rehabilitation and other supports as may be reasonably required to facilitate the attempt. However, neither Dr. Armitage nor State Farm knew whether graduated work was available, and the OCF-9 provided no guidance or direction to Mr. Nader with respect to what was expected of him in terms of investigating, arranging or participating in a graduated work return. More importantly, when advised that Mr. Nader had not returned to work, State Farm took no steps to ascertain the reasons for his non-return to work, help determine the availability of graduated work, and either help facilitate a graduated return to work (if available) or proceed with a vocational assessment to explore other employment options, including possible upgrading. Instead, State Farm simply maintained its denial. In these ways, State Farm acted unreasonably, and its withholding of income replacement benefits from this point became subject to a special award.
This decision is an important lesson to insurers of their obligation to keep an open mind and to continue consideration of entitlement to accident benefits even after the benefit has been denied.
The decision can be read in its entirety by clicking on the link below.