In 2019 the legislature amended the SABS to confirm that the med/rehab limits are exclusive of HST. But when exactly is HST payable in accident benefits claims?
HST has been a hot topic in accident benefits over the past few years, spawning class action lawsuits, a Divisional Court appeal and a legislative amendment. However, the basic question of what types of services are subject to HST has not been hotly contested.
In the recent decision of Almasalmah v Travelers Insurance, the LAT confirmed that treatment provided to AB claimants is typically HST exempt. In this case, a social worker was attempting to charge HST on services proposed in a treatment and assessment plan (OCF-18). The insurer approved the social worker treatment, but denied the HST, as well as some overhead/ administrative expenses. The claimant disputed the denied portion of the treatment plan and the matter proceeded to a hearing. In the decision, Adjudicator DiBattista referenced Part II of Schedule V of the Excise Tax Act, which outlines services that are tax exempt, and he noted that this Schedule specifically addressed social worker services. Adjudicator DiBattista concluded that the HST being claimed was not payable and stated “Denying sales tax on a tax-exempt service is a black and white matter that does not require a detailed explanation… This should never have been part of the treatment plan as the provider is neither liable to collect nor remit HST on these services.”
All OCF-18 forms contain a line for HST “if applicable”. So how do you determine if HST is actually applicable if it is being claimed by a treatment provider?
As confirmed by Adjudicator DiBattista, Part II of Schedule V of the Excise Tax Act is dedicated to Health Care Services that are exempt from HST. The list of services includes, but is not limited to, chiropractic, physiotherapy, acupuncture, occupational therapy and psychological services. Any services outlined in this Schedule that are provided for the purpose of treating an injury, or assisting with coping with an injury, are exempt from HST. Therefore, most treatment submitted by way of an OCF-18 in an accident benefits claim should be HST exempt.
Whether or not an assessment is HST exempt requires an analysis of the primary purpose of the assessment. Examinations that address entitlement to accident benefits, such as insurer’s examinations, are not HST exempt because the purpose of the assessment is to determine eligibility for benefits rather than the protection, maintenance or restoration of the health of an AB claimant. However, assessments for the primary purpose of treatment planning and progress reports prepared by a treatment provider who has a professional-client relationship with an AB claimant may be HST exempt.
Legitimate treatment providers who do not need to remit HST should not be adding HST to tax exempt services proposed on OCF-18s. However, this recent LAT decision is a good reminder to AB adjusters and defence lawyers to always scrutinize OCF-18s and related invoices when HST is being claimed.
See Almasalmah v Travelers Insurance, 2024 CanLII 2645 (ON LAT)
