Ask before you offer disability coverage to foreign contract workers

I’m currently tracking two human resource trends that will likely remain strong in 2013 and beyond and which are generating questions in the benefits world.  They are: (1) Increased global hiring and (2) increased outsourcing.

The impact of these developments – and they have been noted on a number of human resource trend prediction lists for 2013 – is that we are fielding more questions about providing disability coverage to contract workers who come into Canada on a temporary work visa.  Providing health coverage for these individuals is relatively straightforward; providing disability coverage is a little more involved and employers should ascertain the insurer’s coverage criteria for foreign workers before offering this benefit.  Be aware that some carriers don’t offer disability insurance at all to foreign contract workers; others do but usually with some restrictions and limitations.

For insurers that do offer disability coverage to foreign contract workers, some of the following boundaries might apply:

• Coverage limited to duration of the work visa with maximum time frames imposed
• Insurer must be notified when the individual’s employment status changes from contract worker to permanent resident
• In the event of a disability payment, insurers may have varying rules as to when payments cease, for example, two years after the date of disability.
• There may be allowances for work permit extensions.
• Foreign contract workers must be listed during annual renewal census reviews.
• Coverage ceases upon leaving Canada.

In short, as Canadian hiring practices continue to tap into foreign talent and more non-Canadians enter the workforce on foreign worker visas, make sure you investigate your disability insurance details before making any promises to prospective candidates.  You want to make sure you have the appropriate coverage in place.  

Judy Buckley

V.P. Consulting