ith 29 states and the District of Columbia now allowing the use of medical marijuana, it’s conceivable that the drug could be covered under an employee health plan or workers’ compensation plan. In Canada, which has legalized medical marijuana, some large employers have already announced that they will cover the drug under their employee benefit plans.
In an environment in which opiate addiction continues to escalate, there may be more openness to alternative pain medications. “There are many concerns about young people using marijuana for any reason,” said Mary Kay O’Neill, MD, a partner with HR consultancy Mercer in Seattle. Yet, “there are also public-policy reasons to look at medical marijuana more closely” because there is less danger of overdosing compared to other medications, like opiates.
However, reimbursing medical marijuana, which contains or is derived from the cannabis plant, risks opening up a host of questions and potential liabilities for employers. As with any complex legal issue, employers should confer with legal counsel before making any decisions in this area.
Barriers to Reimbursement
The main sticking point with more widespread and reimbursable medical marijuana use is that the federal government still classifies marijuana as a Schedule I drug that represents a high risk of abuse and carries the harshest range of criminal penalties—a designation marijuana shares with heroin, LSD, ecstasy and peyote. As a result, medical marijuana has not been approved by the U.S. Food and Drug Administration and is unlikely to be until it is reclassified to a lower schedule.
This Schedule I classification also creates a number of issues for employers considering reimbursing medical marijuana. It may be difficult to find an insurance carrier that is willing to offer health insurance or workers’ compensation plans that cover medical marijuana unless compelled to by law. Therefore, only employers with self-insured plans are likely to see this coverage as an option.
What if a self-insured employer wants to cover medical marijuana? The current plethora of different state and local laws and regulations, coupled with uncertainty at the federal level, does not make for easy administration of medical marijuana reimbursement. “It is difficult to come up with policies for national employers, who are often reluctant to administer a patchwork benefit,” said O’Neill.
At the same time, “pharmacy benefit managers don’t want to take on risks by covering medical marijuana,” she said. Marijuana’s current classification as a Schedule I drug also makes it difficult to fund and conduct vigorous research into the efficacy of medical marijuana, a core prerequisite for inclusion in prescription drug formularies. If this type of research measured outcomes for patients taking medical marijuana, it would become much easier to make a case for reimbursement.
“Can taking medical marijuana be shown to get people back to work faster and with better outcomes, lower costs and less impact from long-term usage compared to other types of therapy?” asked Michele Hibbert-Iacobacci, head of information management and support for Mitchell Casualty Solutions in San Diego and co-author of a white paper on the issues associated with medical marijuana reimbursement. These are the key questions that need to be answered. However, many available studies “have only a few hundred participants compared to the thousands characteristic of most serious medical research, and there is no widespread study of outcomes,” she said.
Safety and compliance issues are also important. Depending on their industry, employers may need to accommodate employees using medical marijuana to prevent safety risks and regulatory compliance violations. For example, companies in the transportation industry, which must comply with rigorous federal safety regulations, would have to carefully manage any employee who is using medical marijuana as part of recovery from a workers’ compensation injury.
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The movement to legalize recreational use of marijuana has gained tremendous momentum in recent years with an increasing number of states passing or considering laws to ease or eliminate penalties for marijuana use. As a result, the marijuana-growing industry has become more mainstream and has invested heavily in lobbying. This is particularly important at the state level, given that state laws govern insurance.
“I don’t see how this train will stop rolling,” said Hibbert-Iacobacci. “The industry is huge. It employs a lot of people. They just have to show that its use is safe from a medical perspective.”
For now at least, employers may simply consider that being for or against medical marijuana reimbursement is a way to reinforce their brand as an employer.
“There is often a certain stigma to covering medical marijuana,” said Larry Casey, shareholder with law firm Davis, Malm & D’Agostine in Boston. “Is it something that would make an employee want to come work for the organization? In an industry or area of the country that is progressive about the use of marijuana for medical purposes, covering medical marijuana could help an organization be seen as a progressive employer.”