Health Insurance Claim Denied in Canada: Provincial Rights + How to Appeal

Canada's healthcare system creates a common misunderstanding: because universal provincial health coverage is provided, many Canadians assume they have limited options when a supplemental private health insurance claim is denied. In fact, Canada has a well-developed dispute resolution system for private health and dental insurance, and policyholders have meaningful rights they can exercise.

This guide focuses specifically on private supplemental health insurance — the coverage provided through employers, professional associations, or purchased individually to cover services not included in provincial health plans (dental, vision, prescription drugs, paramedical services, private hospital rooms, and out-of-country coverage).

What Private Health Insurance Covers in Canada

Provincial health plans (OHIP in Ontario, MSP in BC, AHCIP in Alberta, etc.) cover medically necessary hospital and physician services. Private supplemental plans typically cover:

• Prescription drugs
• Dental care
• Vision care
• Physiotherapy, chiropractic, massage, and other paramedical services
• Private hospital rooms
• Out-of-country emergency medical coverage
• Mental health services (psychologists, social workers)
• Medical equipment (orthotics, hearing aids, CPAP machines)

Denials in private coverage commonly involve prescription drugs not on the plan's formulary, paramedical services exceeding annual limits, dental procedures classified as cosmetic, out-of-country claims where the insurer disputes the emergency nature, and mental health coverage limitations.

Your Rights as a Canadian Private Insurance Policyholder

Federal oversight: The Office of the Superintendent of Financial Institutions (OSFI) regulates federally incorporated insurance companies. Most major Canadian life and health insurers (Manulife, Sun Life, Great-West Life/Canada Life, Desjardins, Green Shield Canada) are federally regulated.

Provincial oversight: Insurance companies incorporated in a specific province are regulated by that province's insurance regulator (FSRA in Ontario, BCFSA in BC, AMF in Quebec, etc.).

Key consumer protections:

• The right to a written explanation of any denial
• The right to an internal appeal
• The right to escalate to the OmbudService for Life & Health Insurance (OLHI) for free independent review
• Protection under the Policyholder Treatment Standard issued by the Canadian Life and Health Insurance Association (CLHIA)

The Internal Appeals Process

Before going to OLHI or a regulator, you must exhaust the insurer's internal complaints process. Here is how to do this effectively:

Step 1: Request the Full Written Denial

Call your insurer and immediately follow up in writing requesting:

• The specific plan provision or exclusion that applies
• The factual basis for the denial (e.g., what clinical evidence they reviewed)
• What additional information, if any, could cause them to reconsider

Step 2: Review Your Group Benefit Booklet or Policy Contract

Your group benefit booklet (if covered through an employer) or individual policy contract is the controlling document. Read the relevant sections carefully. Common issues include:

• Drug formularies: If your prescribed drug isn't on the formulary, check whether your doctor can document why a listed alternative is contraindicated for you.
• Annual limits: If your claim was denied because you've hit an annual limit, confirm whether the limit resets at calendar year, policy anniversary year, or contract year.
• Coordination of benefits: If both you and your spouse have coverage, mishandled coordination of benefits can result in improper denials.

Step 3: Get Your Healthcare Provider's Support

For prescription drug, dental, vision, or paramedical denials, your healthcare provider can often supply additional documentation:

• A letter of medical necessity from your physician explaining why the specific drug, treatment, or device is required
• A dental treatment plan with specific procedure codes and clinical rationale
• Documentation that alternatives are clinically contraindicated

This additional documentation is submitted with your internal appeal letter.

Step 4: File a Formal Written Appeal

Write a formal appeal to your insurer's appeals or complaints department. Include:

• Your policy/certificate number and claim reference
• A clear statement that you are formally disputing the denial
• Your grounds for dispute (specific plan provision, clinical evidence)
• Attached supporting documents from your healthcare provider
• A request for a response within 30 days

Keep copies of everything. If this is an employer group plan, your HR department may be able to assist or apply pressure on the insurer — group plan administrators have leverage that individual claimants don't.

Step 5: File with OLHI

If your internal appeal doesn't resolve the matter, escalate to the OmbudService for Life & Health Insurance (OLHI) at olhi.ca. OLHI is free for consumers and handles disputes involving:

• Life insurance
• Disability insurance
• Health insurance (medical, dental, vision, drug)
• Creditor insurance
• Travel insurance

OLHI's process:

1. You submit a complaint online, by phone (1-800-268-8099), or by mail
2. OLHI reviews your complaint to confirm it falls within their mandate
3. OLHI contacts the insurer and attempts early resolution
4. If unresolved, OLHI issues a formal recommendation

OLHI's recommendations are not legally binding on the insurer, but compliance rates are high — insurers generally follow OLHI recommendations. If they don't, OLHI can publicise their non-compliance.

For complaints about federally regulated insurers, you can also file with OSFI and the Financial Consumer Agency of Canada (FCAC) at canada.ca/en/financial-consumer-agency.

Provincial Variations That Matter

Ontario

The Financial Services Regulatory Authority of Ontario (FSRA) regulates provincially incorporated Ontario insurers. The FSRA Market Conduct Division handles consumer complaints at fsrao.ca.

Quebec

The Autorité des marchés financiers (AMF) regulates Quebec insurers. Quebec consumers also benefit from the Consumer Protection Act, which provides additional remedies. The AMF has a consumer assistance centre at amf.gouv.qc.ca.

British Columbia

The BC Financial Services Authority (BCFSA) regulates BC insurers. The Consumer Assistance Program at BCFSA handles complaints.

Alberta

The Alberta Insurance Council (AIC) and the Alberta Superintendent of Insurance handle complaints about licensed Alberta insurers.

Disability Insurance Appeals in Canada

Long-term disability (LTD) claims are among the most commonly denied and hardest fought in Canadian insurance. Key points for LTD denials:

• Own occupation vs. any occupation: Many LTD policies begin on an "own occupation" definition (can you do your specific job?) and shift to an "any occupation" definition after 2 years (can you do any job?). Many denials happen at this transition point.
• Independent Medical Examination (IME): Insurers frequently require an IME from a physician of their choosing. You are entitled to your own IME from your treating specialists — and you should get one.
• Surveillance: Canadian disability insurers sometimes conduct surveillance. If this is a factor, consult a disability insurance lawyer.
• Time limits on legal action: Most LTD policies have a 2-year limitation period for commencing legal action after denial. This is important — don't wait.

For LTD disputes, consider consulting a disability insurance lawyer in addition to using OLHI. Many work on contingency.

Out-of-Country Travel Health Insurance Claims

Out-of-country travel health insurance (often bundled with credit cards or purchased through your provincial auto club) is a common source of denial. Common disputes include:

• The insurer classifying your emergency as related to a pre-existing condition
• Disputes over whether the situation was a genuine emergency (often defined as "sudden and unexpected illness or injury")
• The insurer disputing the reasonableness of costs charged by foreign hospitals

For these disputes, have your treating physician in the foreign country provide a letter confirming the emergency nature of the situation, and work with your Canadian physician to document that the condition was stable and controlled before departure.

Common Mistakes to Avoid

Not filing within the appeal deadline: Most policies require appeals within 90 to 180 days of the denial. Check your policy — this deadline can be strict.

Filing only verbal complaints: Always follow up in writing.

Not using your employer's HR department: For group plans, HR departments can sometimes resolve claims issues that you couldn't resolve alone.

Not checking coordination of benefits: If both spouses have group coverage, coordination must be handled correctly, or claims fall between the cracks.

Accepting a drug formulary decision without a medical necessity exception: Most insurers have an exception process for drugs not on the formulary. If your doctor documents that listed alternatives are ineffective or contraindicated, you may qualify for an exception.

Getting Help

ClaimBack (claimback.app) generates professional appeal letters for Canadian private health insurance disputes. Whether your claim involves prescription drugs, dental, disability, or out-of-country coverage, the tool helps you frame your appeal with the right language and supporting arguments.

Summary

1. Get the full written denial with specific plan provisions cited
2. Review your benefit booklet — look for exceptions to the rule cited
3. Get a letter of medical necessity from your healthcare provider
4. File a formal written internal appeal with a 30-day response deadline
5. Escalate to OLHI if unresolved — it's free and respected by insurers
6. For provincial complaints, use the relevant provincial regulator
7. For LTD denials, consider specialist legal advice given the stakes and time limits