Federal Court declines review of public-service health-plan claim refusal

The Federal Court has dismissed a retired public servant's challenge to a health-plan reimbursement refusal, finding that the plan's appeal authority was exercising private powers rather than the public authority needed to trigger federal judicial review.

In Théberge v. PSHCP Administration Authority, 2026 FC 861, Justice François Joyal ruled on October 15, 2026, that the court lacked jurisdiction to review the individual claim decision. He awarded no costs.

The ruling leaves the reimbursement dispute's merits undecided. The court did not determine whether the refusal was unreasonable or whether the authority had breached procedural fairness.

A health-benefit dispute raised a jurisdiction question

Alain Théberge, a retired federal public servant, sought reimbursement of $17 for a laboratory test for his spouse under the Public Service Health Care Plan. Canada Life rejected the claim in January 2025, and the plan's Administration Authority upheld the refusal on June 11, 2025.

As the judgment explains, the dispute concerned how the plan's supplementary coverage interacted with provincial coverage. The authority treated the test as ineligible for reimbursement because Ontario covered it when requested by a particular type of specialist, although it had been requested by a general practitioner in this case.

Théberge applied for judicial review. Before examining whether the refusal was justified, however, the court had to decide whether the authority was acting as a federal board, commission or tribunal under the Federal Courts Act.

The judgment describes the plan as a private health-insurance arrangement covering more than 800,000 federal public service employees and retirees and their eligible dependants. Canada Life assesses claims as the plan administrator. The separate Administration Authority oversees aspects of the plan's operation and manages its appeal process.

A federal connection did not establish a statutory power

Justice Joyal explained that the Federal Court has the jurisdiction Parliament has given it. For this form of judicial review, the analysis required identifying the particular power being exercised and tracing its source. The decision also had to involve an exercise of state authority with a sufficiently public character.

The authority's government connections did not settle those questions. It had been incorporated through letters patent issued by the Treasury Board under the Financial Administration Act, but its creation under federal legislation did not mean that every decision it made exercised statutory power.

The relevant power was deciding appeals from rejected individual claims. The judge found that it came from the Public Service Health Care Plan Directive, a negotiated instrument involving the Treasury Board, bargaining agents and the National Association of Federal Retirees.

The directive is treated as part of the collective agreements between the Treasury Board and participating bargaining agents. It establishes a separate appeal process and makes the authority's appeal decisions final and binding. The court considered it closer in character to a collective agreement than to legislation or regulations.

Théberge argued that section 7.1 of the Financial Administration Act supplied the statutory foundation. The judge rejected that argument: the provision gave powers to the Treasury Board, not to the authority. The Treasury Board's use of those powers to negotiate and approve benefit terms as an employer did not turn the negotiated directive into legislation.

The claim decision was also private in nature

The court reached the same jurisdictional conclusion on a separate basis. Even a public body can make private decisions, and the authority's handling of an individual insurance claim was essentially private.

Government sponsorship did not change that character. Here, the federal government was acting as an employer providing benefits to employees and retirees. The authority operated at arm's length: the government appointed some directors but did not direct its work or control its appeal decisions.

The legislation expressly states that the authority is neither a Crown corporation nor a Crown agent. Its claim-appeal process was part of a negotiated arrangement, with an appeals committee representing the employer, employees and retirees.

Théberge also pointed to the authority's designation as a government institution under access-to-information and privacy legislation. Justice Joyal found that this imposed transparency and privacy duties without changing the authority's legal status or independence in managing its affairs.

An earlier ruling supported the result

The court's analysis followed Pontbriand, a 2011 Federal Court decision that likewise found the authority was not acting as a federal board or tribunal when deciding an appeal from a rejected claim.

Justice Joyal allowed Théberge, who represented himself, to file additional written submissions responding to the jurisdiction issue. The respondent did not object.

The application was ultimately dismissed for lack of jurisdiction. The decision concerns the source and nature of the authority's individual claims-appeal power; it does not resolve the correct interpretation of Théberge's coverage or endorse the fairness of the refusal.