Court rules that medical marijuana coverage not required; two insurers add medical marijuana coverage option
The Nova Scotia Court of Appeal has overturned a human rights decision that would have required a benefit plan to provide medical marijuana coverage, while two Canadian insurers have broadly given plan sponsors the option of including medical marijuana coverage under their extended health care benefits. An overview of medical marijuana was previously provided in the October 2017 News & Views.
Nova Scotia Court of Appeal finds denial of medical marijuana coverage is not discriminatory
In April 2018, the Nova Scotia Court of Appeal released its decision in Canadian Elevator Industry Welfare Trust Fund v. Skinner, overturning a decision of the Nova Scotia Human Rights Board which had found it was discriminatory for a benefit plan not to provide coverage for medical marijuana.
Mr. Skinner was injured on the job and his doctor authorized the use of medical marijuana, which Mr. Skinner found beneficial. He applied for coverage of his medical marijuana costs with his employerprovided benefits plan, which limited coverage to prescription drugs that were approved by Health Canada. Coverage was denied as medical marijuana has not been approved by Health Canada and does not have a drug identification number (DIN).
Mr. Skinner filed a complaint with the Nova Scotia Human Rights Tribunal alleging that the denial of coverage was discriminatory based on his physical disability. The Tribunal Board of Inquiry (the Board) agreed, finding the exclusion was based on Mr. Skinner’s disability and was therefore discriminatory. The Board held that the benefits plan must provide coverage for medical marijuana. Subsequently, the Health and Welfare Trust appealed to the Nova Scotia Court of Appeal.
The Court of Appeal asked whether it is discriminatory for a private drug plan to limit reimbursement for the cost of drugs to only those approved by Health Canada. The Court unanimously found that medical marijuana coverage is not required under human rights legislation.
The Appeal Court stated that all benefit plans have limits, which apply to all plan members. The court further stated that limiting coverage to drugs approved by Health Canada is reasonable and not discriminatory. Although Mr. Skinner suffered an adverse impact from the denial of coverage, the adverse impact was not based on discrimination due to disability.
Two insurers offer voluntary option to reimburse medical marijuana for plan sponsors
As noted in the October 2017 article, there are currently few examples of private plans in Canada providing medical marijuana coverage. While medical marijuana is legal, it is not an approved therapeutic drug in Canada and does not have a DIN assigned by Health Canada, which is the criteria most plans use to determine which drugs are eligible for reimbursement.
Early in 2018, Green Shield Canada and Sun Life announced they will offer coverage for medical cannabis as a non-prescription drug extended health care expense. For a plan sponsor, coverage implementation is optional and is subject to an annual maximum per individual. Prior authorization will be required, licensed producers must be used, and coverage is limited to certain conditions (for example, Sun Life permits reimbursement in cases of cancer, multiple sclerosis, rheumatoid arthritis, HIV/AIDS, and patients requiring palliative care).
Similar coverage may be available from other insurers subject to negotiation (particularly for self-funded administrative services only contracts) but these are the first broad offerings in the Canadian marketplace. The prospect of added claims costs is likely to be key for many plan sponsors in considering changing their plan. While the annual maximums available from these two insurers are well below the estimated $10,000 annual cost of medical marijuana for a regular user, it still represents a significant added cost on top of existing extended health care costs, which have been rising steadily for years.
The Skinner decision provides that it is not discriminatory for a benefit plan to limit reimbursement for prescription drugs to only those approved by Health Canada. However, in light of ongoing developments in the insurance marketplace, extended health plan sponsors may wish to examine their benefit plan provisions.
The Skinner case addressed a controversial issue and there were a number of intervenors on both sides of the appeal. It remains to be seen if the decision will be appealed to the Supreme Court of Canada.
Medical marijuana is a highly fluid issue generating a high level of interest from organizations in Canada.
The upcoming legalization of recreational marijuana, the continued introduction of provincial cannabis legislation and ongoing clinical research into the medical use of cannabis ensure the issue will remain relevant for some time.