In Okanagan College, 2026 BCLRB 39, the B.C. Labour Relations Board considered whether a long-term disability plan that ended coverage at age 65 was protected by the bona fide group or employee insurance plan exception under section 13(3)(b) of the B.C. Human Rights Code.
The decision is important for employers, plan sponsors, unions and benefits advisors. It confirms that an age-based limit in a genuine benefit plan will not necessarily lose statutory protection simply because other, potentially less discriminatory, plan designs may be available.
Background
The case arose from a challenge to a long-term disability plan that terminated coverage and benefits at age 65. The union argued that, after mandatory retirement was eliminated in British Columbia, employees who continued working beyond age 65 should not lose LTD protection solely because of their age.
The arbitrator accepted the union’s position in part. He found that the denial of post-65 LTD coverage was prima facie discriminatory. He also found that the LTD plan was not protected by the bona fide plan exception in section 13(3)(b) of the Human Rights Code. As a remedy, the arbitrator directed the employer to take reasonable steps to amend the LTD plan so that employees age 65 and older would have access to meaningful LTD coverage.
The Board set aside that part of the award.
The Board’s decision
The Board held that the arbitrator applied the wrong legal test.
The central issue was the application of the Supreme Court of Canada’s decision in New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc., 2008 SCC 45. Under Potash, a plan will be bona fide if it is legitimate or genuine, adopted in good faith, and not adopted for the purpose of defeating protected rights.
The Board emphasized that this is not the same as asking whether the specific plan term is the fairest, most generous or least discriminatory option available. It is also not an inquiry into whether the employer could have purchased a different product or whether a more protective design was available in the market.
That distinction was central to the outcome. The arbitrator had found that the LTD plan was legitimate and adopted in good faith. However, he went further and considered whether the employer could reasonably continue to maintain the age-65 cutoff in light of changes following the elimination of mandatory retirement and the availability of some post-65 LTD products.
In the Board’s view, that approach improperly introduced a reasonableness and proportionality analysis into the Potash test.
No ongoing duty to re-justify the plan
The evidence showed that some post-65 LTD coverage could be obtained. For example, coverage to age 70 had been quoted at a significant premium increase, and other more limited options were also available.
The arbitrator treated that evidence as important because it suggested that some form of post-65 LTD coverage could be provided without destabilizing the plan.
The Board disagreed. It held that the availability of alternative plan designs did not mean that the existing LTD plan ceased to be bona fide. The statutory exception does not require an employer to continually re-justify an age-based plan limit as insurance products, demographics or market conditions evolve.
This is the key employer-side takeaway. Section 13(3)(b) protects bona fide plans. It does not require employers to establish that their plan design is optimal.
Charter values did not change the statutory test
The arbitrator also relied on Charter equality values to support a proportionality analysis. The Board rejected that approach when applying the statutory exemption.
The Board drew an important distinction between applying section 13(3)(b) under the existing Potash framework and challenging the constitutionality of section 13(3)(b) itself. In the Board’s view, Charter values could not be used to alter the statutory test that applies to bona fide group or employee insurance plans.
The Board did not decide the constitutional issue. It remitted the remaining Charter challenge to section 13(3)(b) back to the arbitrator.
Key takeaways
The decision provides useful guidance for employers and plan sponsors that maintain insured benefit plans with age-based limits.
In particular, the decision confirms that:
- section 13(3)(b) remains a meaningful defence for bona fide group or employee insurance plans;
- an age-based limit does not lose protection simply because another benefit design may be available;
- the statutory test does not require proof that extending coverage would be impossible, unaffordable or destabilizing; and
- constitutional challenges to the statutory exception remain a separate issue.
The decision is favourable for employers. It confirms that, under the current statutory framework, the focus is on whether the plan is bona fide, not whether the plan could have been designed differently.
At the same time, the decision should not be read as the final word on age-based limits in benefit plans. The constitutional challenge remains outstanding. If the legal landscape changes, it is more likely to do so through that challenge, or through legislative reform, than through a broader interpretation of the existing bona fide plan exception.
