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Supporting Gender Transitions In Policy Documentation

Recently, the grandchild of one of Certified Financial Planner Léony deGraaf Hastings’s clients transitioned from identifying as male to identifying as female. Since the grandchild was a beneficiary on her client’s life insurance policy, deGraaf Hastings, of deGraaf Financial Strategies, inquired with the insurance company, Empire Life, about how to handle this change.

“Since my client is still able to update her beneficiary designations, it was recommended that she simply sign a new beneficiary designation form, and where it asked for the ‘relation,’ she could update it from her grandson to her granddaughter, or she could update it to ‘grandchild,’” she explains. “If she did not have the capacity to make this update, at the time of claim the beneficiary may be asked to provide ID.”

More generally, Empire Life director of communication services

SHOULD EI CHANGE PROMPT BENEFITS PLAN ADJUSTMENTS?

Effective December 18, 2022, the federal government extended employment insurance (EI) sickness benefits to 26 weeks from 15 weeks. Clients who are plan sponsors may be considering adjusting their benefits plans to take advantage of this change if they have a long-term disability (LTD) elimination period shorter than 26 weeks.

That’s not necessarily the best move, says Nicholas Landry, senior benefits consultant with BFL Canada.

“EI is a rather limited benefit. Employers that understand the balance of protection and employee responsi-

Karen Smith says it’s straightforward to change a gender and/or a name with a written request and a legal document that supports the request. The company provides a confirmation notification to clients and asks them to keep that with their policy contract.

Canadian Life and Health Insurance Association (CLHIA) assistant vice-president of strategic communications and public affairs Kevin Dorse adds that while there is no standard approach across the industry, some insurers have updated their forms and applications to include a category other than male or female — generally, adding “non-binary” or “other.”

“The life and health insurance industry is very sensitive to the concerns individuals have with being able to define the gender they identify by when they are applying for life and health insurance, or in any other interaction with their insurer,” Dorse says.

“Our members respect the rights of people who are transgender and non-binary and are always making efforts to accommodate how individuals wish to identify.” – Alison MacAlpine bilities generally don’t want to change their long-term disability elimination period. As an employee, if you are entitled to some form of compensation, they would prefer that you are able to access benefits as soon as possible,” he says.

One downside to lengthening the LTD elimination period is that employees won’t have access to early intervention and case management that has the potential to shorten the time they spend receiving LTD benefits.

That said, when the LTD elimination period starts before 26 weeks, there could now be overlap with EI and this may mean employees have to return some of their EI benefits. Importantly, that’s not the case when employees close their EI claim as soon as they get approval for LTD — so there’s an easy remedy.

More of a case can be made for adjusting short-term disability plans that have an EI carve-out provision. These plans pay benefits early in an absence and then again after EI payments stop. That second stage may now overlap with the longer duration of the EI sickness benefit. As with LTD, the problem with overlapping benefits is that employees may have to pay back some EI benefits.

Whether plan sponsors opt to adjust their plans or not, Landry says the EI change gives advisors an opportunity to share an important message with business owner clients: “Make sure you’re reviewing your benefits plan regularly, and that what you have is aligned with your total compensation strategy and your risk sharing strategy with employees.” – AM

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BY ERIN BURY