Right to Terminate Group Benefits at 65 on the Road to a Successful Challenge

The number of workers over the age of 65 has risen significantly in recent years. The increasing number of older employees who choose to remain in the workplace, combined with the elimination of mandatory retirement across Canada, has put into question the issue of the termination of benefits after an employee reaches the age of 65.

While most employers routinely terminate benefits at age 65, the changing workforce demographic has created a demand for benefits coverage for older workers. However, providing benefits to employees past the age of 65 can be difficult because insurers either will not provide the coverage, or will only do so at a cost that is too high for the employer. This has led to legal challenges from employees.

Recently one of these legal challenges is moving towards a successful challenge.

A Human Rights Tribunal of Ontario interim decision has ruled that ceasing employee group benefits when the employee turns 65 creates a distinction based on age and is unconstitutional because it violates the equality rights in the Canadian Charter of Rights and Freedoms.

Quick facts

Mr. Talos was a teacher who chose to continue working full-time past the age of 65, but was denied further group benefit coverage (extended health, dental and life insurance benefits) and pension plan due to his age.

Mr. Talos filed a human rights claim to seek monetary compensation of $160,000 for lost benefits and compensation for injury to dignity, feelings and self-respect, and alleges discrimination with respect to employment because of age.

Moreover, Mr. Talos seeks a determination that s. 25(2.1) of the Ontario Human Rights Code is invalid for being in breach of the equality provision of the Charter that enumerates “age” as a protected characteristic. “Age” is also a protected ground under s. 25(2.1) of the Code.

Analysis and decisions

The tribunal considered whether Section 25 (2.1) of the Human Rights Code in conjunction with s.44 of the Employment Standards Act, 2000 and O. Reg. 286/01: Benefit Plans under the ESA breached section 15(1) of the Canadian Charter of Human Rights.

Section 25 (2.1) of the Code states:

Employee benefit and pension plans
25 (2.1) The right under section 5 to equal treatment with respect to employment without discrimination because of age is not infringed by an employee benefit, pension, superannuation or group insurance plan or fund that complies with the Employment Standards Act, 2000 and the regulations thereunder. 2005, c. 29, s. 1 (5).

Section 44 (1) of the ESA states

Except as prescribed, no employer or person acting directly on behalf of an employer shall provide, offer or arrange for a benefit plan that treats any of the following persons differently because of the age, sex or marital status of employees:

1. Employees.

2. Beneficiaries.

3. Survivors.

4. Dependants.

Section 25 (2.1) creates an exemption to equal treatment with respect to employment without discrimination because of age for an employee benefit, pension, superannuation, or group insurance plan or fund that complies with the Employment Standards Act. Section 25(2.1) of the Code, when read together with section 44 of the ESA and O. Reg. 286/01 under the ESA, generally allows employers to terminate benefits for workers over age 65.

The allegation of discrimination was limited to group health, dental and life insurance benefit plans, excluding long-term disability insurance, superannuation and pension plans from consideration in this constitutional challenge.

The challenge was based on the fact that in Canada, all statutory provisions must comply with the Charter. The Ontario Human Rights Tribunal has jurisdiction to consider a Charter challenge where there is a connection to the Code. Therefore, the OHRT has jurisdiction to interpret and to determine the constitutional issue within this Application.

During the hearing, the OHRT heard from various expert witnesses such as economists and actuaries, on the sustainability of benefit plans if health, dental and life insurance benefits are to be extended to employees aged 65 and older. The OHRT concluded that it is not “cost-prohibitive” to continue benefits. In other words, the Tribunal ruled that it is financially sustainable to include employees aged 65 and older in plans that provide health care, dental and modified life insurance benefits.

The OHRT determined that the Section 25 (2.1) of the Code did breach the equality guarantee of the Charter by permitting lower compensation to older workers. And while Section 1 of the Charter (the reasonable limits clause) allows a law to breach another provision of the Charter if there is a sufficient justification for the limit on the Charter right, the tribunal found that the breach of Section 15 was not permitted by Section 1. As a result, Section 25(2.1) of the Code has been determined to be unconstitutional.

Takeaway for employers

This decision is an interim one and the merits of the case are still to be decided.

While employers are still not legally required to provide group health benefits or even group benefits after an employee reaches the age of 65, those that do provide group benefits must listen and pay attention to this decision and understand that they may not be able to rely on the exemption provided by section 25(2.1) of the Code, opening the door for employees to challenge the discontinuance of benefits coverage at age 65 as a form of age discrimination.

We will keep you updated on any legal developments on the topic.


  1. David Collier-Brown

    In my case, my then employer attempted to secure benefits, or a subset of benefits for my under-65 spouse, but the insurer chose to “no bid”, depending on the language of their contract to allow them to not consider the request.

    This posed a problem to the employer, who wanted to provide the services, but were constrained by the language of the contract.

    The latter might well deserve the attention of the courts…

  2. It is blatant age discrimination. It is as plain as the nose on your face.