Canada Life ends up as sole bidder for public service health plan contract

The president of the Treasury Board Secretariat (TBS) says Canada Life met the standard to win the contract for the Public Service Health Care Plan even though it ended up the only bidder.

Around 1.7 million federal workers, retirees and their dependents saw their insurance provider switch from Sun Life to Canada Life on July 1.

With the switch came changes to what services and drugs are covered, how they're approved and what happens when they need to talk to an agent. CBC has heard hundreds of stories from people now having problems with long wait times, failing to get through to an agent or being denied a claim without explanation.

Treasury Board President Anita Anand said the bidding process began in 2018 with industry engagement, followed by a request for proposals from insurance providers. In an email Wednesday afternoon, Public Services and Procurement Canada confirmed it received three bids during the request for proposal process for the $514 million contract.

"Towards the end of the process, it turned out that Canada Life was the only bidder remaining, but it was nevertheless evaluated by those technical criteria and met those technical criteria," she said on CBC Radio's Ottawa Morning Wednesday. 

"I want to be clear that there was a standard in place that was met by Canada Life in terms of the scoring of the bids before it was selected."

Short-term fixes coming: Anand

Anand said she has been "pressing" Canada Life for a plan to solve employee issues and there were three solutions being pitched:

• Getting call wait times down to between five and 10 minutes by Dec. 31.
• Having call centres open on weekends for the next several weeks to cut down the backlog.
• Introducing an escalation process for urgent or priority cases.

Anand said changes made to the plan, including claim limits and coverage terms and eligibility, were approved in the fall of 2022 after negotiations between the government, bargaining units and the pensioner representatives.

She said those changes are compounding the issues and Canada Life didn't expect "that there would be so many calls related to the changes … that came into effect on the same day that they took over providing service."

The changes were independent of the switch to Canada Life and involved several coverage increases, though it did introduce new limits related to drug coverage — including a cap on dispensing fees and a requirement for a pre-authorization for high-cost medications — and physiotherapy.

Anand said for people who think a denied claim should be covered, there is an appeal process for members "who don't agree with the decision regarding their claim."

Those appeals are judged on a case-by-case basis.

She said the only thing the government can do at this point is enforce the contractual obligations Canada Life committed to when it won the bid.

We need to make sure we "don't create even worse problems by having no service provider," Anand said.

"There was one bidder and so we need to make sure that the current provider is able to offer its services as much as effectively as possible and as quickly as possible."