Bill 22 in B. C. may require insurers to pay all bodily injury health care costs

Insurers will be on the hook for all health care costs related to bodily injury claims if Bill 22 is passed in British Columbia, warns Jonathan Hodes of Clark Wilson LLP.

Since the 1950s, the insurance industry in British Columbia had an unofficial agreement with the Ministry of Health that insurers would repay the government for hospital costs incurred by claimants injured as a result of the negligence of the insured, Hodes wrote in the Clark Wilson LLP April 2008 newsletter.

In practice, this occurs only occasionally and the agreement is likely unenforceable, he added.

But that may change in the future, now that B. C.’s legislature has introduced Bill 22, the Health Care Costs Recovery Act. Key features of the legislation include:

• when a plaintiff commences legal action for personal injuries or death, he or she must include a health care services claim in the legal proceeding;

• health care services claims would include all government-funded services, including hospital costs, medicare and continuing and future care costs; and

• if an insurer becomes aware its insured has or may have caused personal injuries to or death of a beneficiary, the insurer must notify the government within 60 days. It must then comply with the ministry’s requests for further information.

“If Bill 22 is passed, insurers handling claims in British Columbia will have to contend with the added layer of damages in every claim,” Hodes writes. “In particular, [they] will have to ensure that the relevant notice provisions are complied with in order to close their files.

“U. S.-based insurers will see their B. C. claims fall into line with their experience south of the border, while Canadian insurers will see their exposure increase on virtually every claim.”