A 71-year-old man has a heart attack while on vacation in Florida, is treated by angioplasty, returns home to Ontario, and expects to resume his vacation—fully insured—a couple of weeks later. No strings attached. Sound too good to be true? It is.
No insurer is going to cover that risk. Not even on the strength of a letter from a doctor that his patient is now stable. But when the former executive tries to dig into his company retiree pension plan to confirm that he truly would be covered, he can’t locate the fine print that will give him that assurance. Nobody in the benefits department can find it either. All they can offer is an opinion that he would be okay. And that’s a common story with people who look to company benefit plans to cover out-of-province health services.
Usually all they see is a summary of benefits, without the exclusions or limitations or governing definitions. In effect, they don’t really have a contract—and that’s not going to be good enough if they should ever be denied a medical claim running into the thousands of dollars and need to defend their rights to have those bills paid.
Most company pension plans have a lifetime limit on the dollar value of medical benefits. And whether it’s $50,000, $100,000, or even $1 million, remember that has to last over a lifetime; each time there is a drain on that reservoir, it is not refilled. Travellers need a minimum of $1 million of coverage per trip, not over a lifetime.
Many plans also have limits on the extent of time beneficiaries can be out of the country. In the case of the retired executive with the angioplasty, that was a maximum of 12 weeks at a time. There are also no listings of exclusions or definitions of terms such as “medical emergency,” “stable condition,” or “pre-existing condition.” And without a clear listing of what is not covered as well as what is covered, a policy is worse than worthless, because it gives you a misleading sense of security. It also gives all the rights to decide what is or is not payable to the benefits manager, without any recourse to you. A contract cuts both ways.
The primary reason people opt to use pension plan benefits to cover out-of-country emergencies is that they are already paid for, so why pay extra? Why pay for something you already have? Well, the question you have to ask yourself is, “what do I really have?”
Most pension plans are broader in nature and have purposes beyond covering out-of-country travel. In fact, that is not what they were designed for.
The costs of a medical emergency encountered abroad can ruin you. It’s as simple as that. There is no substitute for out-of-country health insurance designed specifically for Canadians who are legal residents of their province.
If you take shortcuts, be prepared to be hijacked.