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Posted by Simon Pagé, ASA, AICA, December 7 2022
Health Insurance
New Protection Measures for Temporary Foreign Workers

temporary foreign workers
With our acute labour shortage, temporary foreign workers have never been more important within Canadian businesses. 

In this context, the Canadian government recently tightened up the protection of temporary foreign workers. On September 26, 2022, the government passed 13 new regulatory amendments aimed at better protecting them and ensuring the integrity of the Temporary Foreign Worker Program (TFWP) and the International Mobility Program.

These measures will affect all areas of the economy, and extend to all employers who recruit temporary foreign workers, both small and large.

A New Era

Up to September 25, 2022, workers recruited abroad usually arrived in Canada with no other protection than a travel insurance that only covered emergency medical and hospitalization expenses. Such coverage was clearly inadequate in most cases.

During the months when employees familiarize themselves with their new job, they still have health care needs. However, these needs (e.g., prescription drugs, medical consultations, hospital services, etc.) are usually not covered under the travel insurance.

In general, temporary foreign workers are usually entitled to the provincial or territorial health plan 3 months after they arrive in the country. In the meantime, they must contend with limited health coverage, if any. And this is what Ottawa decided to change with one of their regulatory amendments.

Private Insurance for Emergency Medical Care

Under one of the new amendments, all TFWP employers must obtain and pay for private insurance that covers emergency medical care during the period for which the temporary foreign workers are not covered by their provincial or territorial health insurance system.

One exception applies in the case of TFWP employers who employ a foreign worker under an agreement reached between Canada and another country concerning seasonal agricultural workers, where the agreement includes health insurance.

Note that employers are prohibited from recovering these costs from the foreign workers in any form, including through pay deductions or charge back clauses in their employment agreements.

Impact for Employers

This change will involve a direct additional cost for TFWP employers, who will be required to obtain private insurance during a few months for their temporary foreign employees. However, many employers were already offering such coverage to have a competitive edge in recruiting. This will now be a market standard.

Most insurers already offer products meant as temporary substitutes for the various provincial or territorial health plans, payable on a monthly basis. As these products widely differ in terms of types of employees covered, coverage levels, inclusion of dependents, rates, limitations, etc., it is important for employers to select the right product that meets their needs and those of temporary foreign workers.

Impact for Employees

This change is excellent news for temporary foreign workers, who will now be covered for their health care expenses from the moment they arrive in the country. This brings considerable peace of mind to someone who is changing countries for work-related reasons and must rebuild a life in an unfamiliar land.

Impact on Group Insurance

Some group insurance contracts stipulate that employees are eligible for group insurance when they are covered through a product designed as a substitute to the provincial/territorial health plan. In these cases, employees may have to enrol in the group insurance plan sooner than in the past, based on the eligibility rule.

Other contracts rather require that employees be covered under the provincial/territorial health plan to be eligible for group insurance. In these cases, the substitute product will have no impact on group insurance coverage.

What Should You Do as an Employer?

If you are a TFWP employer, you will have to obtain private insurance as a substitute to the provincial or territorial health plan for your new temporary foreign workers. 

It is also recommended to assist employees in their efforts to obtain coverage under the provincial/territorial health plan (usually within 3 months time).

In some cases, these employees will need to be enrolled in the group plan sooner than in the past (depending on the contract).

Other Regulatory Amendments

To learn more about the other regulatory amendments enacted, please visit the Government of Canada website.

AGA Advisors can assist you in selecting the appropriate substitute product for your temporary foreign employees and determining whether they are eligible for group insurance. Do not hesitate to contact us today to discuss this further.

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Simon Pagé has gained more than 10 years of consulting experience in meeting employers’ needs, developing his ability to guide and advise employers on defined contribution pension plans, investment and group insurance. His consulting style is characterized by his efficiency, leadership and integrity, and his ability to communicate clearly on complex issues.
Simon Pagé, ASA, AICA