And the Times They Are A’Changing The Evolution of Insurance Coverage for Medical Marijuana – Update

November 3, 2017 | Helen D.K. Friedman

In our previous publication[1], we discussed the incremental extension of coverage for medical marijuana under various types of insurance benefit plans and recent caselaw regarding insurer funding for medical marijuana.

By way of update, Skinner v. Board of Trustees of the Canadian Elevator Industry Welfare Trust Fund [2], a 2017 decision of the Nova Scotia Human Rights Commission (NSHRC), was appealed by the Board of Trustees.  The appeal was heard October 2, 2017, by the Nova Scotia Court of Appeal and a decision is pending.  The appeal was “supported” financially and strategically by Aurora Cannabis Inc. and CFAMM (Canadians for Fair Access to Medical Marijuana)[3].

Those with intervenor status include 12 large Atlantic Canada-based employers including Irving Shipbuilding, Sobeys Inc., Medavie Blue Cross, and 12 other Welfare Benefit plans.  The Nova Scotia Human Rights Tribunal, as well as The National ME/FM Network, a group which represents people across Canada with chronic pain, also intervened.  The magnitude of interest reflects the need for the insurance industry to tune into the ramifications of coverage, both from an approval and denial perspective.

Skinner, injured in an automobile accident in the course of employment, developed chronic pain, anxiety and depression refractory to conventional treatment.  Workers Compensation denied his claim and an appeal was pending.  In the interim, his employer’s auto insurer funded medical marijuana for Mr. Skinner for approximately two years.  When he reached his policy maximum of $25,000.00, Mr. Skinner applied to the Trust as his group benefits provider for funding of medical marijuana but was denied.  He applied to the NSHRC alleging discrimination by the Trust in denying his claim.

While the NSHRC found the Trust to have discriminated against Skinner in refusing to fund his medical marijuana, the impact of the decision may be particular to Nova Scotia as their Human Rights legislation does not contain the same benefit plan exclusions as other jurisdictions.  The NSHRC had evidence that the Nova Scotia Ministry of Community and Social Services was required to pay for medical marijuana as a “special need” under the Employment Support and Income Assistance Act and medical marijuana was a compensable drug under the New Brunswick Workers’ Compensation Act.  The NSHRC was hampered by a lack of evidence as to any undue financial hardship to the Welfare Trust if coverage for medical marijuana was imposed.  Presumably, evidence could be marshalled on both sides with respect to the financial impact.  The NSHRC specified their decision did not imply other benefit plans should cover medical marijuana.  Their decision was limited to the effects of the denial in the face of the wording of the Trust plan, acknowledging alternate wording could effectively exclude coverage.

The most significant barrier to medical marijuana coverage, as indicated in our earlier publication and raised by the Trust, is the absence of a Drug Identification Number (DIN).  Without a DIN, coverage as a medication is unlikely.  A number of benefit plans provide for individual healthcare spending accounts (HSA) which allow an annual discretionary amount for “approved medical expenses”.  The HSA allows plan members to be reimbursed for eligible out of pocket, health-related expenses not covered by their extended health and dental plans.  Reportedly, medical marijuana is listed as an eligible expense in many HSAs.

Some HSAs base their eligible medical benefits on the Canada Revenue Agency (CRA) list of eligible medical expenses.  As of 2015, CRA has confirmed that medical marijuana purchased under appropriate authorization is an allowable medical expense at tax time.  The CRA website includes medical marijuana and marijuana seeds as eligible expenses.  For those without benefit coverage but with a medical marijuana authorization, the cost can be mitigated as an allowable medical expense above a certain threshold. That said, the taxpayer still has to fund the product to begin with.

Intervention in Skinner by the National ME/FM Action Network may signal an opportunity for a more fulsome consideration of the broader cost/benefits of coverage inclusion.  The Journal of Pain (official journal of the American Pain Society)[4] in June 2016 referenced a study which suggests that many chronic pain patients were substituting medical marijuana for opioids and other medication and finding the benefit of medical marijuana to be greater than opioids.  The article suggests that using medical marijuana for chronic pain may result in decreased opioid use.  While the initial study requires further investigation, insurers could potentially benefit by covering the cost of medical marijuana if it would reduce costs connected with prescription opioids.  Most if not all prescription opioids are covered under benefit plans.   Potentially, coverage extension for medical marijuana may lead to reduced benefit and societal costs connected to prescription opioids.

The level of interest in the Skinner appeal and the implications for employers, welfare trusts and insurers is a sign that the times, they are a’changing.  As a result, insurers are being called upon to review their policy wordings and determine whether medical marijuana is a product which will be covered and if so, under what circumstances and at what cost.  Legalization of recreational marijuana in July 2018 is likely to play a part in the analysis.

[1]a Claims Canada August/September 2017, Volume II, No. 4.

1b Miller Thomson Insurance Law blog, July 24, 2017

[2] 2017 CanLII 3240 (NSHRC)

[3] CFAMM Media Release, September 28, 2017

[4] The Journal of Pain, June 2016, Volume 17, Issue 6
“Medical Cannabis Use is Associated with Decreased Opiate Medication Use in a Retrospective Cross-Sectional Survey of Patients with Chronic Pain” – Kevin F. Boehnke, Evangelos Litinas, Daniel J. Clauw.


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