In a decision on a preliminary issue, dated November 18, 2016, Arbitrator Schnapp held that a catastrophically impaired Applicant missed the two year limitation period to dispute the Insurer’s refusal to pay housekeeping and attendant care benefits.
In Mayo v. Economical, the Applicant was involved in a serious MVA on May 2, 2005. Following the accident, the Applicant received various benefits under the SABS, including housekeeping and attendant care benefits. Economical sent the Applicant an OCF-9 near the two year mark advising that no further housekeeping and attendant care benefits would be paid after the 104-week mark as per sections 18 and 22 of the SABS. The language of these two sections was attached to the OCF-9. The Applicant did not dispute the denial until more than eight years later, when he also applied for a determination of catastrophic impairment. Ultimately the Applicant was deemed to be catastrophically impaired but Economical maintained that the Applicant was statutorily barred from proceeding to Arbitration with respect to his entitlement to attendant care and housekeeping for failing to adhere to the two-year limitation period.
Various arguments were raised on behalf of the Applicant; however, the main argument was that there can be no denial prior to entitlement. The Applicant argued that since an insured cannot receive post-104 week housekeeping and attendant care benefits unless he/she is deemed catastrophically impaired, the catastrophic designation being a “threshold requirement” to receive these benefits. The Applicant took the position that the OCF-9 did nothing more than advise that he lacked the status to claim housekeeping and attendant care benefits beyond the 104 week mark since it was not open to Economical to deny post-104 week housekeeping and attendant care benefits at the time the OCF-9 was issued. The Applicant also argued that since there is no limitation period for applying for catastrophic designation or for disputing an insurer’s denial of a catastrophic application, to accept Economical’s position would be to accept that insurers can create a time limit/limitation period for when an insured must apply for catastrophic impairment determination, which goes against recent decisions such as Guarantee v. Do and Machaj v. RBC.
Economical successfully argued that the Do and Machaj decisions were not relevant to the issue in this case because it was the specific benefits claimed that were denied not catastrophic designation. The Arbitrator found the reasoning in cases such as Sommerville and State Farm and Ramalingam and State Farm instructive on the point that the SABS does not contemplate two versions of housekeeping and attendant care benefits (pre-104 week and post-104 week) which have two separate applications and require two separate denials. The Arbitrator also agreed that it could not have been the Legislature’s intent to require insurers, once a valid refusal was issued at the 104-week mark, to be unable to continue assessing the Applicant but possibly be required to pay retroactive benefits once the insured is deemed catastrophic, potentially several years later. The Arbitrator agreed that this would place significant prejudice on the insurer and result in an unfair/illogical outcome. Finally, the Arbitrator also agreed that, while a catastrophic impairment determination affects an Applicant’s entitlement to a greater tier of benefits, it does not dispose of the two-year limitation period to dispute the denial of those benefits.
The decision will be posted on the FSCO Web site shortly.