Manitoba Public Insurance - Dirty Little Secrets

Did you know that . . .

Autopac offers absolutely no compensation for pain and suffering, no matter how serious and painful your injuries might be?
MPIC pays you relatively little for horrible permanent injuries? Check out some of these figures.
Your post-accident take-home income replacement (Income Replacement Indemnity) will immediately drop by 10%, and will only ever increase by Cost of Living (about 2% per year) from that point forward under Autopac, if you sustain a career-ending injury in an auto accident?
You lose all of your employer subsidized benefits, such as medical, dental, vision care, prescription drug plan? The MPIC Act does not require MPIC to replace these even if you sustain a career-ending injury in an auto accident.
You are not permitted to sue following a serious auto accident under Autopac even if the accident was directly caused by a vehicle defect which is the subject of a class-action lawsuit? Only MPIC can sue and they keep all the proceeds of the lawsuit.
As a student, you are particularly at risk from the MPIC Act?

The information presented on this Web site flows from the MPIC Act, nearly 180 pages of dry, boring legalese. This Web site is intended to demonstrate to Manitobans just how terribly unprotected they really are by Autopac should they be injured in an automobile accident. Neither MPIC nor the politicians responsible care much about this, as is shown by their failure to address any of these shortcomings over the years that Autopac has been in force. They also prefer that you do not know about any of these shortcomings, which is why not much is ever said about the Act until it affects you.

It is the MPIC Act which allows MPIC to do all these things. It is the Law and it applies, period. There is no redress despite what you may believe or are told. I know some of these statements seem unbelievable, so bear with me and you will learn the truth about MPIC and Autopac!

Like most of you, I always thought that Autopac was better than most plans. After all, MPIC tells you that at every opportunity. I took at face value what I read in MPIC information pamphlets, heard from MPIC public relations and from the politicians. Since my injury though, I've discovered some horrible realities about Autopac. I've discovered that much of what you read about Autopac are misleading, half-truths or outright deception by MPIC executives or by politicians leading you to believe what you want to hear. They never actually lie, but present things in a way that leaves the reader with the impression that all is well with your insurance coverage Read on. I think you will be shocked. I hope you will also be angry.

That's correct. In the mid nineties, when MPIC went to the no-fault format, they cut costs by doing away with the need for lawyers to lobby on behalf of their clients for pain and suffering settlements. They accomplished this by doing away with any settlement at all for pain and suffering. So even if you must undergo months and months of excruciatingly painful skin grafts or some such procedure, MPIC will not give you one thin dime in compensation.

As an injured Manitoban, you will immediately lose 10% of your take-home pay. Over time, replacement income will drop to less than half of what you would have been taking home because your only pay raise while on replacement income is Cost of Living. You also lose all employer subsidized benefits, such as medical, dental, vision care, prescription drug plan.

This is what the MPIC Act allows MPIC to do. These are some of those things you cannot appeal. Here is a simple example of how someone can be affected if they are injured.

Suppose your salary level at the time of your accident is such that you net about $30,000 after taxes, Canada Pension Plan (CPP), Employment Insurance (EI) and such deductions as medical, dental, vision care, etc. In other words, after paying your taxes, your CPP and EI premiums, and your share of all your various benefits, you take home $30,000 annually.

If you are injured and cannot work, you will receive from MPIC an Income Replacement Indemnity (IRI) which is equal to 90% of your net income. You would now receive approximately $27,000 annually, instead of the $30,000 you took home prior to the accident. So, you've already lost $3000, or 10% of your take-home pay, but don't forget, you no longer have taxable income, which means that NO tax deductions or tax refunds are possible, so forget RRSP contributions. You no longer contribute to CPP or EI and you've lost all your employer-subsidized benefits. MPIC does compensate you a token amount for the loss of a few of these benefits, but nowhere near enough for you to replace them on your own. If you're lucky, your spouse has a plan that you can share. Otherwise, it's Blue Cross or nothing. And you pay by the way, because MPIC will not replace any of these benefits.

Whatever CPP you will eventually receive is now frozen, and will only ever begin increasing if and when you start working again, if you are able and can find a job. You accumulate no seniority, no vacation pay, no sick days or overtime. Nor can you deduct Registered Retirement Savings Plan (RRSP) contributions, education deductions, charitable donations, medical expenses or other typical tax deductions because you no longer have taxable income from which to deduct them.

At some point, probably within a year or two, MPIC will undertake something they call a "determination". This means that MPIC will decide if your physical condition will permit you to undertake some other type of work. If so, then MPIC will come up with a new employment for you (it can be anything your physical condition will allow you to do), calculate what that new employment would pay, full-time and "offset" (reduce) your IRI by that amount. It doesn't matter whether your original IRI was established based on part-time earnings; they'll still use full-time determined salary to offset this. And MPIC doesn't care whether you actually find a job; they'll deduct the value of your determined salary from your IRI just the same. Don't forget that the amount MPIC offsets was tax-free IRI money. Whatever you actually earn in your new job (if you get one) will now be taxable, effectively reducing take-home pay by an additional 30% or more.

The fact that IRI only increases by Cost of Living will have a profoundly negative affect on your lifestyle over time. When my own IRI was first established, it was based on a gross annual salary of $38,000 (my actual salary at the time). Ten years later, MPIC calculates my annual salary to be $46,000 (2% per year for ten years). Actual salary for someone at my level and experience is now $68,000. So, I've lost $22,000 per year gross salary after 10 years (nearly $400 per week, take home), and the gap will continue to widen. It is this same phenomenon that screws students, but the effect is much worse because of the length of time they'll be affected.

Within the MPIC Act, there is a provision for a retirement income and it is called Retirement Income Benefit, or RIB. It kicks in at age 65. You may ask, "If it is in the Act, how can MPIC avoid paying it?" Let me explain how this black magic is done. First, MPIC offsets (remember offsets means reduces) every dollar of RIB by whatever residual pension income you draw (credits you had already earned from your old employment at the time of your accident). This is quite reasonable, since RIB was intended to replace lost pension. But then MPIC offsets what is left of your RIB by whatever CPP and by Old Age Security (OAS) you draw at age 65. Finally, MPIC offsets the remainder of your RIB by any RRSP income you may have (even if it is funded from a spousal RRSP!). The only people who can expect to draw RIB are those with few or no private pension credits, few or no CPP credits, and few or no RRSP credits (immigrants, ex-convicts, students, perhaps). The net result is that many Manitobans will not be able to draw any RIB at all. Think of it! The MPIC Act permits MPIC to commandeer all your CPP/OAS/RRSP to minimize or to eliminate its own obligation to pay RIB. All you will be left with at your retirement is likely only what you were able to sock away on your own before your accident.

Are you beginning to see how MPIC works? Publicize the positives with of lots of fanfare, and quietly avoid the negatives. You are left with the illusion that you are well protected. As you can see, your standard of living and retirement will be seriously compromised because the MPIC Act allows it and MPIC could care less.

MPIC literature speaks of several methods and levels of redress, such as the Manitoba Ombudsman, the Fair Practices Office and even a formal Review Commission, but the sad truth is that they don't work to protect you from the terrible effects of the MPIC Act.

MPIC proudly flaunts all these appeal mechanisms in pamphlets and other written material provided to Manitobans. These leave you with the impression that there are many levels of review and redress built into the Act to protect Manitobans. The truth is, by law, these so called appeal mechanisms only deal with the administration of the Act but never with the content of the Act. In other words, as long as MPIC doesn't violate the MPIC Act itself (and we've already seen how self-serving the act really is), MPIC may do whatever it wants. If you believe that the Act is biased, doesn't fairly compensate you, or is just plain unfair, tough. In my case, my IRI is probably half what my take-home pay would have been and I expect to receive one third of the retirement benefits I would have received had I not been injured. You know what MPIC officials have to say about this? "RIB coverage is expansive but is not unlimited. It is simply meant to help customers to ensure they are not left in a catastrophic financial situation in their retirement years and meets the needs of the vast majority of our customers". Apparently, they have decided that a pension reduced by almost 70% meets my needs, and somehow avoids a catastrophic financial situation. I hope it will meet your needs too!

As a student, you're really screwed by MPI. If you sustain a career-ending injury, You will receive an IRI and probably RIB at age 65, but you'll never earn anywhere near what you might have, had you completed school. Doctor, lawyer, engineer, accountant; it doesn't matter what you almost were. Under current legislation, you will receive a monthly IRI payment of about $1,730. Not much of a return for 4 years of University and all that hard work, is it? And what about the $50,000 you still owe on your student loan? Too bad! When you turn 65 you can expect to draw about $1,200 per month (in today's dollars) for your retirement. Of course your IRI ceases when you reach 65.

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Oh yes! Have a look at the section of the MPIC Act which deals with COMPENSATION FOR PERMANENT IMPAIRMENT. This refers to a lump sum payment from MPIC to compensate you for such things as loss of an arm, or a leg, or an eye, etc. MPIC has developed a schedule that defines the lump sum you will receive for every conceivable permanent injury you could incur. It reads much like the price list in a butcher shop, but instead of dollars per kilogram, the schedule provides a percentage per injury. The percentage corresponding to a particular injury is then multiplied by the MAXIMUM you could receive to arrive at a dollar amount. The MPIC website shows this maximum to be $138,073 effective March 1, 2011. If you examine the schedule, you will see that, for the loss of your arm (at the shoulder) or your leg (at the hip), you would receive 50% of the maximum, or $69,037. If you were to lose both legs or both arms, or an arm and a leg, of course then you'd receive $69,037 for each loss or $138,073 in total. Here are some examples of what MPIC might pay for other injuries:

If you were pregnant and lost your baby, that's only worth $9,964. Note that you are only permitted to collect up to the maximum of 100% or $138,073. So for example, if you lost both arms, both legs and your vision, you would be paid as if you had lost just both arms. In this example, the loss of your legs and your eyes is a freebee for MPIC. It makes you wonder why MPIC even calls it insurance.

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Yes, there is a lot you can do. Be very vocal. Send letters and E-Mails to the Premier, to the Minister of Justice and to MPIC. Send them to your MLA. Let them know that you are not happy with MPIC. Pester them relentlessly. Write letters to the editor. Educate your friends and relatives because they probably don't know about this either. Don't forget, the MPIC Act could affect anyone, not just drivers. If your infant child, son, daughter or grandchild is hurt in an auto accident, he or she will be affected.

If there is one thing politicians hate, it is bad publicity and public pressure. If enough Manitobans put enough pressure on the politicians, they'll change the Act. Remember a few years back when MPIC wanted to give away its $27 million surplus instead of returning it to those Manitobans who had paid the high auto premiums? Public outcry soon put a stop to that, and drivers received a cash rebate instead. Let's work together again and get the MPIC Act changed! It doesn't matter to me any more, but it might matter to you or your loved ones.

Write to Eric Herbalin, President & CEO MPIC, to Mary Ann Kempe, Senior VP Corporate Relations MPIC, and Kelvin Goertzen, Minister of Justice and Attorney General.

Minister's Office
Phone: 204-945-3728
Fax: 204-945-2517
Email: minjus@leg.gov.mb.ca
104 Legislative Building
450 Broadway
Winnipeg, MB R3C 0V8

Think Autopac's got your back? Don't count on it! Read on.

Did you know that . . .

There is no payout for pain and suffering.

It is quite possible and even likely that MPIC will avoid paying any retirement income benefit to you at all, despite the fact that there is a provision for retirement income for injured Manitobans in the MPIC Act.

MPIC literature speaks of several methods and levels of redress, such as the Manitoba Ombudsman, the Fair Practices Office and even a formal Review Commission, but the sad truth is that they don't work to protect you from the terrible effects of the MPIC Act.

Students are particularly vulnerable.

Could it get worse?

It seems like Manitobans are screwed then. Is there nothing I personally can do about this swindle?

Here are some useful E-Mail links and phone numbers: