The Times They Are a Changing – The Evolution of Insurance Coverage for Medical Marijuana

July 24, 2017 | Helen D.K. Friedman, Evan Bawks

As we celebrate the 50th Anniversary of the Summer of Love (1967-2017), listening to vinyl/download versions of Jefferson Airplane, Janis Joplin and the Grateful Dead, it is clear some aspects of counter-culture have become mainstream.

With the advent of new Health Canada Regulations in 2015, following the Supreme Court’s ruling that users of medical marijuana should be permitted to consume the product in more varied forms than smoking dried buds, the demand for insurers to cover medical marijuana under benefit plans has increased exponentially.  At the same time, the current retreat from opioid prescription has left a gap in products available to treat chronic pain.  These factors are shifting the landscape and mindset of employers, insurers and adjudicators towards coverage extension.  Most recently, the food giant Loblaws extended coverage for medical marijuana to its approximately 45,000 employees under policies managed by Manulife and Great-West Life.

It is possible that Loblaws’ extension of coverage is simply a supply chain support to the Shoppers Drug Mart application to Health Canada for the license required to sell medical marijuana.  (Loblaws attributes the extension to evolving clinical evidence for use as treatment for specific medical conditions).  Setting supply chain innovation aside, extension of coverage under insurance plans and by statutory tribunals has been well underway for years.  Adjudicators, employers and insurers are tuning in, turning on (the benefits coverage) and dropping out (of coverage denials).

Background – Regulatory Scheme for Medical Marijuana

In R. v. Parker, 2000 CanLII 5762 (ONCA), the Ontario Court of Appeal considered the impact of medical marijuana in the context of a criminal proceeding under the Controlled Drugs and Substances Act (CDSA).  The accused Parker was suffering from epilepsy and found smoking marijuana substantially reduced instances of seizure.  Since he had no legal source of marijuana, he cultivated it for himself, which led to him being charged under the CDSA.  The Court of Appeal held the lack of a viable medical exemption from the enforcement provisions under CDSA violated the accused’s constitutional right to life, liberty and security of the person pursuant to section 7 of the Charter of Rights and Freedoms, as it would force individuals to choose between their liberty and their health.

Parker eventually led the federal government to establish the Marihuana Medical Access Regulations (MMAR) which set out a framework for an individual, with appropriate authorization from a medical practitioner, to access marijuana for medical purposes.  Pursuant to the MMAR, an individual with appropriate authorization could purchase marijuana from Health Canada sources of supply or, upon approval from Health Canada, was permitted to cultivate marijuana for his or her own use. (Note that the federal statutes and regulations all use the spelling “Marihuana” instead of the more common “Marijuana”).

In 2013, the federal government revised the guidelines for access to medical marijuana through the Marihuana for Medical Purposes Regulations (or MMPR), which made some changes to the MMAR and sought to restrict possession limits and licences for the providers of medical marijuana.

Originally, only dried marijuana was permissible for use under the regulations. In June 2015, in R. v. Smith, 2015 SCC 34, the Supreme Court of Canada broadened the available forms of marijuana to be used for medical purposes to include cannabis oil and fresh marijuana buds and leaves, in addition to dried marijuana.

The MMPR stipulated that the MMAR would phase out and be fully repealed by March 31, 2014. As a result of the prohibition on issuing licences and lowering possession amounts under the MMPR, an injunction was sought in the Federal Court (in Canada v. Allard, 2014 FC 280), to preserve the MMAR and to limit the provisions of the MMPR. Injunctive relief was granted and was upheld by the Federal Court of Appeal (2014 FCA 298). The full case on the merits was heard in 2016, with the Federal Court declaring that the entire MMPR was unconstitutional and leaving a period of time for Parliament to pass appropriate remedial regulations (2016 FC 236 & 237).

As a result, the Access to Cannabis for Medical Purposes Regulations (ACMPR) came into force in February 2017. This regulation replaces the MMPR and MMAR and is the central mechanism for controlling medical marijuana in Canada. The Narcotic Control Regulations, CRC c. 1041, allows medical practitioners to prescribe marijuana despite the provisions of the CDSA, while the ACMPR (and previous MMAR and MMPR) dictates the circumstances under which the exemption could be exercised.

Under the ACMPR, consumers of medical marijuana can access cannabis from a licenced producer by first becoming a client of the producer, which requires filing an application with the client’s information and obtaining a “medical document”, a term defined by the regulations. Applicants may, in lieu of providing a medical document, obtain a registration certificate issued by the Minister (which also requires a medical document).  The registration certificate allows an individual to grow their own marijuana instead of purchasing it from a licenced producer. Section 129 provides that only residents of Canada may become clients of a licenced producer. The “medical document” information is set out in section 8, which states that a health care practitioner may provide a medical document for a person under professional treatment which must include their personal information, the address where the consultation with the practitioner occurred, the daily quantity of marijuana, (in grams), which the practitioner authorizes for the person and the period of use (which cannot exceed one year).

What medical marijuana does not have, however, is a Drug Identification Number (DIN).  The absence of a DIN is a major barrier to insurance coverage and is also a deterrent to many doctors who are asked to prescribe it.  A DIN confirms the product has been evaluated and approved for sale in Canada and identifies the manufacturer, brand name, medicinal ingredients, strength, pharmaceutical form and route of administration.  According to the Canadian Life and Health Insurance Association, if medical marijuana was issued a DIN by Health Canada, it would be far more likely to be covered by health insurance.  The process to obtain a DIN involves rigorous clinical research, generally including 10 year double blind studies. Instead, some licensed medical marijuana producers are assigning Product Identification Numbers (PINs).  PINs are available when a drug or product is classified as an investigational drug or non-pharmaceutical. The purpose of the PIN is to make it as easy as possible for insurance administrators to approve or cover product costs under a benefit plan.

Context in Statutory Accident Benefits Cases (Ontario)

Persons injured in motor vehicle accidents, particularly those with chronic pain and anxiety issues, are submitting requests for coverage to their accident benefits insurers.

Currently, the Statutory Accident Benefits Schedule (SABS) provides medical benefits for:

s. 15(1) … “all reasonable and necessary expenses incurred by … the insured person as a result of the accident for,

(c) medication

(2) Despite subsection (1), the insurer is not liable to pay medical benefits

(a) for goods or services that are experimental in nature.

Further, section 38 provides:

38(2) An insurer is not liable to pay an expense in respect of a medical benefit … that was incurred before … a treatment plan … unless,

(c) The expense is reasonable and necessary as a result of the impairment sustained by the insured person for,

(i) drugs prescribed by a regulated health professional, or …”

Whether or not medical marijuana is experimental in nature may be somewhat fact specific, depending on the nature of the impairment.  Medical marijuana may be considered experimental with respect to some impairments but not others.

The cases below outline some of the considerations applied by SABS adjudicators pertaining to ‘experimental’, ‘reasonable and necessary’, administrative requirements and funding for medical marijuana.

TN v. The Personal Insurance Company of Canada, FSCO A06-000399, FSCO 3853

In Arbitrator Bayefsky’s seminal July 26, 2012 decision, medical marijuana was found to be a good and service of a medical nature.  On the issue of whether or not it was experimental in nature, the insurer successfully established a prima facie case that, in general, the use of marijuana for treatment in neuropsychiatry (brain injury) was experimental.  The Arbitrator then incorporated the reasoning in Paquette v. Certas, FSCO A05-000934 as to the meaning of “experimental in nature”.  While accepting scientific principles should underlie the interpretation of terms, the SABS was intended to be a more remedial regime concerned with the provision of a therapeutic medical service.  There was no requirement to prove with medical or scientific certainty that a treatment be therapeutic or effective.  Accordingly, a low threshold was set.  In TN, the Arbitrator accepted that the use of marijuana for some of TN’s symptoms, namely pain, anxiety, insomnia and poor appetite, would not be considered experimental.  The fact that the use of marijuana to treat these symptoms remains controversial, did not relieve the insurer’s obligation to cover the cost provided that it was reasonably required as a result of the accident. As well, the Arbitrator noted evidence that conventionally prescribed medications (for pain) also carried significant risks and further accepted evidence that marijuana may be beneficial in mitigating those risks.  (This line of reasoning has become even more cogent five years later.)

Doyon v. Allstate Insurance Company of Canada, FSCO A15-002442, FSCO 4993

In this case, Doyon sought payment of medical marijuana expenses for the period June 2012 to November 2014 in the amount of $12,600.  The insurer had agreed to fund the medical marijuana and/or related growing equipment provided it complied with the terms of Doyon’s licence.  The stumbling block, however, was the provision of documentation confirming that the amounts claimed were provided by licensed suppliers in accordance with the terms of the licence.  In this case, some of the marijuana and equipment had been purchased outside the terms of Doyon’s licence, specifically from “gray area” suppliers including compassionate societies.

While accepting the insurer’s need to confirm properly incurred expenses, the Arbitrator was prepared to accept the Health Canada price guide and Doyon’s prescription for a specific level of consumption (in grams) to fill in the gaps.  In so doing, the Arbitrator followed a Workplace Safety and Insurance Appeals Tribunal practice of accepting the Health Canada price with evidence of a specific level of consumption to set a monetary benefit.  On a go forward basis, in order to satisfy the insurer’s requirement for proof, no less than once per year Doyon was required to submit written confirmation of the amounts of medical marijuana she was consuming.

MJ v. Pembridge Insurance Company, 2017 CanLII 1556 (ON LAT)

MJ sought funding for two grams of medical marijuana per day.  The insurer was prepared to fund the same however, required MJ to conform to the regulatory scheme.  Specifically, the MMPR, which was still in force at the time, prescribed a “medical document” and the information required in the medical document to allow holders to possess medical marijuana.  MJ was unable to produce a proper medical document to confirm entitlement to possess and use marijuana for medical purposes.  Accordingly, the Tribunal agreed with the insurer, absent the proper medical documentation, the insurer was not required to fund the expense.

Based on these decisions, expert evidence is available to support the argument that medical marijuana is not experimental in nature, at least for some conditions.  Whether it is reasonable and/or necessary may be more fact specific.  Another line of inquiry is whether consumption is as a result of the accident.  The focus of the recent SABS decisions on the administrative aspects of funding rather than the therapeutic aspects of the product is a tacit admission that times have changed.  Since SABS insurers are entitled to offset for collateral benefits, coverage developments outside the SABS context are becoming increasingly relevant.

Outside the Accidents Benefits Context

A number of other tribunals have addressed entitlement and funding for medical marijuana in the broader insurance context.

Skinner v. Board of Trustees of the Canadian Elevator Industry Welfare Trust Fund, 2017 CanLII 3240 (NS HRC)

This particular decision, under the Human Rights Commission of Nova Scotia, considered whether employee benefits under Skinner’s group plan could include coverage for medical marijuana (specifically, whether or not exclusion of coverage was a violation of the Human Rights Act in Nova Scotia).  The plan restricted coverage to “medically necessary” drugs or medicine but did not define this term.

The decision contains an in-depth and lengthy review of coverage considerations and policy language, including a number of Ontario Human Rights Tribunal decisions which generally found no grounds for discrimination when benefit plan administrators declined funding for medical marijuana.

The Tribunal ultimately agreed that Skinner experienced discrimination as a result of the group plan’s decision to deny coverage and further held this decision was not supported by a reasonable justification. The Tribunal ruled in favour of coverage for medical marijuana.  Reimbursement was ordered only when the medical marijuana was purchased from a producer licensed by Health Canada or a person legally authorized to produce for the complainant.

Corporation of the City of Hamilton v. Hamilton Professional Firefighters Association, 2016 CanLII 16885 (ONLA)

This labour arbitration decision relates to claim for payment of medical marijuana for a grievor’s spouse.  Payment was denied as the expense was not covered by the group benefit plan and because the drug had not been assigned an identification number (DIN) by Health Canada under the Food and Drug Regulations.  The collective bargaining agreement provided reimbursement for drug expenses specifically when the drug in question was approved by Health Canada under the Food and Drug Regulations. Although medical marijuana was approved for sale in Canada by Health Canada, it had not be incorporated by the Food and Drug Regulations. The arbitrator gave deference to the language in the collective agreement and the grievance was denied and dismissed.

Decision No. 221/17, 2017 ONWSIAT 460

This recent WSIAT decision outlines the principles considered by the Tribunal when a worker seeks entitlement to reimbursement for the costs of medical marijuana from the Board following a workplace accident.  Under the Workplace Safety and Insurance Act, a worker is entitled to health care benefits “as may be necessary” as a result of the injury. This includes “prescription drugs”.  (Note that this wording is similar to SABS wording).  The decision granted the worker’s application noting:

[10]      A number of Tribunal decisions have granted entitlement for medical marijuana as a necessary health care expense where the marijuana prescription is for a work-related injury, the worker has a severe impairment, and the worker has been granted an exemption by Health Canada to possess or cultivate marijuana for medicinal purposes.  Tribunal decisions have generally required that there be medical support for the use of marijuana to treat the compensable impairment and that other alternatives first be explored.

[11]      In Decision No. 2445/15, the Vice-Chair provided a succinct summary of the circumstances under which the Tribunal will provide funding for the use of medical marijuana.  As stated in Decision No. 2445/15, the mainstream approach taken in previous Tribunal decisions (see Decision Nos. 480/151393/141537/12, and 491/12) where entitlement for medical marijuana has been granted is as follows:

  • The worker experiences constant and debilitating pain related to the worker’s compensable workplace accident;
  • The worker’s treating physician has recommended and/or prescribed medical marijuana to treat the worker’s ongoing debilitating pain;
  • The worker has obtained from Health Canada the necessary authorization to legally possess medical marijuana with the approval of the worker’s physician;
  • Other methods of pain control have been tried to address the worker’s pain, but have proven to be less effective or practical than medical marijuana; and
  • There are no circumstances which make it inappropriate for the worker to use medical marijuana to treat ongoing pain.

[12]      Decision No. 2335/06I held as follows:

The Panel does not dispute that there may be controversy in the medical community about the effectiveness of marijuana in relieving pain.  The same may be said to be true of many types of medication however.  Notwithstanding the controversy surrounding the success of marijuana as a treatment for pain, we see nothing in the legislation or policy which prohibits an adjudicator from concluding that the use of marijuana could be an appropriate health care measure to be used in treating intractable pain arising from a compensable injury.  While one would expect that the use of marijuana would be the exception rather than the rule in treating pain, we are satisfied that in the appropriate case, the prescription of marijuana is a form of treatment that can [sic] authorized for injured workers.  In our view, this is one of those cases.

We see no reason why requests for payment of marijuana-related expenses ought to be treated as excluded from the Act.  As we interpret the legislation and policy, we believe it provides that entitlement to marijuana can be granted if the evidence establishes that it is required as a result of the injury and it improves the quality of life of a severely impaired worker.

In reaching our decision, we have been particularly influenced by the fact that Health Canada has seen fit to allow this worker access to marijuana.  As noted in the Health Canada information included in the case materials, the Marijuana Medical Access Regulations, which came in to force on July 30, 2001, established a framework to allow access to marijuana by individuals suffering from “grave or debilitating illnesses, where conventional treatments are inappropriate or are not providing adequate relief”.  Health Canada has approved the worker’s access to marijuana on this basis.

[13]      The above decision was interpreted by the Vice-Chair in Decision No. 882/15 to mean that using marijuana for medicinal purposes would be the exception and not the rule.  Entitlement is granted in each cased based on the particular facts of the case.

WSIB adjudicators continue to address the issue on a case-by-case basis, while acknowledging the benefits for treatment of certain symptoms.  For other insurers, policy wording remains critical.

Coverage by Incremental Extension

The extension of private insurance to cover medical marijuana is incremental.  In March 2015, a University of Waterloo student, covered by Waterloo’s Student Health Plan, petitioned the University of Waterloo’s Student Union as the Plan Sponsor to ask Sun Life to make an exception under their plan to fund his medical marijuana.  The student had exhausted other medications to ease his chronic headaches. He submitted his medical marijuana expenses under his plan and was denied.  Following his presentation, the Student Union requested Sun Life make an exception and cover the costs.  Sun Life confirmed medical marijuana is not an eligible expense in its standard benefit plans, but it would consider requests for exceptions if directed by the Plan Sponsor.  Manulife advised of a similar policy in similar circumstances.  The extension of coverage does not mean University of Waterloo students were automatically covered for medical marijuana, rather, the door is open for others to follow the exemption process.

The incremental approach allows insurers to justify payment on a case by case basis.

Loblaws’ coverage, while ground breaking is also incremental.  The coverage is limited to $1,500 per year, with the actual cost of the product to plan members being significantly higher.  Similarly, Loblaws’ coverage is only extended to treat symptoms of multiple sclerosis and the side effects of chemotherapy for cancer patients.  Presumably, this accords with “grave or debilitating illnesses” criteria, where conventional treatments are not providing adequate relief.

In the private plan context, Administrative Services Only plans or self-funded, self-insured plans are more likely to extend coverage.  These plans are administered by insurance companies while the costs of coverage are paid by the employers.  Self-insured companies are able to choose what their benefit plans cover and in so doing, are responding to their employees’ needs.

In this context, Windsor Ontario Union LIUNA Local 625 extended coverage for medical marijuana to its members as a means of reducing opioid use and the consequent and attendant costs of opioid addiction ultimately borne by the insurers, including OHIP.

In keeping with safety concerns, LIUNA’s coverage extension allows for medical marijuana to its retired or permanently injured workers.  For those members who are still on the job, only medical cannabis oil products with reduced THC will be covered.  Union members pay for the prescription up front and are reimbursed.  The Union intends to monitor how often opioids are prescribed after the extension of medical marijuana coverage, in order to determine whether their objective has been achieved.

On June 15, 2017, the Ontario Public Service Employees Union (OPSEU) introduced a plan allowing OPSEU employees, their spouses and dependants to claim up to $3,000 annually for medical marijuana.  The product must be prescribed by licensed physicians and obtained from legally authorized vendors.  Of note, coverage is not limited to specific medical conditions.

With the advent of coverage extension under collateral benefit plans, accident benefits insurers may ultimately have the opportunity to offset some costs of medical marijuana claims.  While coverage remains incremental, there are positive indications for future offsets, given the extension of coverage for medical marijuana under the WSIB, Quebec’s CSST, and Veterans’ Affairs via Blue Cross and the delisting of higher-strength opioid medications under the Ontario Drug Benefit program, effective January 2017.  The delisting of these substances will create further demand for ‘safer’ (and more organic) pain control medication.

There is no doubt that the times they are a changing.