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Board of arbitration holds employer cannot limit employee choice in health care supplies

August 12, 2022

Another board of arbitration rejects an employer’s effort to limit where employees can purchase medical supplies

In 2019, a board of arbitration determined that a hospital employer could not force its employees to purchase compression stockings, paid for by their benefit plan, from its own pharmacy. Another board of arbitration has come to the same conclusion.


When Unity Health created an “Approved Provider Network” (APN) limiting where employees could obtain certain types of medical supplies – notably compression stockings, tens machines, braces, orthotics, orthopedic shoes – CUPE Local 5441 and OCHU challenged that decision. The APN was introduced after the discovery of a significant number of fraudulent benefit insurance claims. Employees could only buy these supplies from the list of third-party approved providers unless an exception was granted by the employer. This meant that employees could not purchase medical supplies from their health care provider, unless that provider was added to the list.

The Award

An arbitration panel, chaired by Arbitrator Parmar, found that the APN was a violation of the collective agreement, writing, “We find that a rule which results in employees being denied coverage for these supplies, despite the fact that their claim is a legitimate and valid one, is a failure to provide the required level of coverage”.

The panel noted that the APN interfered with employee choice about their health care and held there was no practical distinction in the personal choice involved in choosing a provider that prescribes medical supplies and one that sells those supplies. It also rejected the employer’s arguments that the APN was just an “administrative practice” and the “flipside” of delisting providers and found that there was no evidence that the APN was standard industry practice. The panel accepted the Union’s argument that the APN results in a failure to provide the requisite benefits coverage because it leads to the denial of legitimate claims.

The panel also ruled on the timing and scope of information that must be provided when there is a change of insurance carrier under art. 18.01 and 18.02 of the CUPE Central Agreement in the hospital sector. It determined that the employer does not just have to give 60 days’ notice of the change, it must also to provide “enough information to both explain the proposed change and to ascertain the views of the employees”  (although the employer does not have to engage in a process of actually ascertaining the views of employees). In this case, the employer failed to give the union notice of a new dispensing fee cap, and that was found to be a breach of the collective agreement. The hospital also breached the collective agreement by failing to provide a copy of the new master policy within a reasonable time – in this case – 16 months.

Read the decision here.


Kelly Doctor

Practice Areas

Labour Law