Medical marijuana: A smoking hot topic for health and benefit plans
Bill C-45 (Cannabis Act) created quite a stir in April 2017 when it was introduced to the House of Commons. The bill’s intention is to create a framework to control the production, distribution, sale and possession of cannabis in Canada. It should be noted that the Cannabis Act focuses on recreational marijuana and is not expected to change the way individuals access cannabis for medical purposes. Even though Bill C-45 is still under review, it could become effective by July 1, 2018 should it be approved.
Canadian legislation surrounding medical marijuana has changed dramatically over the years. Access to cannabis for medical purposes was first permitted in Canada in 1999 under Section 56 of the Controlled Drugs and Substances Act. The Minister of Health had the authority to grant special exemptions to individuals who were suffering and dying from debilitating illnesses. However, it was still generally considered a crime to possess cannabis in Canada at this time.
Since then, several important court cases—along with changes in societal opinion—have contributed to changes in Canadian legislation. Today, medical marijuana can be obtained through a health practitioner’s prescription and bought from a licensed producer. However, this begs the question: can employees claim medical cannabis under their group health and benefit plan?
Medical marijuana and benefit plans
In most cases, for a drug to be reimbursed as an eligible expense under a group benefit plan in Canada, a Drug Identification Number (DIN) is required. In order for a drug to be sold and receive a DIN, Health Canada must review and approve its safety, efficacy and quality against the standards of the Food and Drug Act and its regulations. To date, cannabis is not an approved therapeutic drug in Canada and does not have a DIN. While carriers may reject claims under this basis for fully insured plans, some self-funded administrative services only (ASO) plans may have more flexibility in choosing what is to be covered under their plans. Since the employer is the one paying the claims and the carrier is only administering the plan, ASO plans may have more flexibility to tailor their decisions.
While medical marijuana is generally not eligible under a group extended healthcare benefit, it can be acceptable as a healthcare spending account (HSA) expense. Since the regulations for HSA expenses rely on the guidelines of the Canada Revenue Agency—and specifically expenses that are eligible under the Medical Expense Tax Credit—medical marijuana is generally an eligible expense through a HSA.
Special cases in Canada
Recently, there have been some plans that have covered medical marijuana for a variety of reasons. Notable employer decisions and exceptions include the following:
- A student at the University of Waterloo was successful in having the health insurance provider cover his medical marijuana in 2014. This was approved based on the student’s medical evidence, the financial impact on the plan and how the coverage affects the student’s personal and academic well-being.
- In 2017, the Nova Scotia Human Rights Commission determined that prescribed medical marijuana for a Nova Scotia man must be covered by the Canadian Elevator Industry Welfare Trust Plan (a multi-employer plan).
- Loblaws and Shoppers Drug Mart recently announced the addition of medical marijuana to their benefit plan with a $1,500 annual maximum. Claims will only be considered for prescriptions to treat symptoms of multiple sclerosis and side effects of chemotherapy.
- Ontario Public Service Employees Union (OPSEU) announced the addition of medical marijuana to their benefits plan on June 15, 2017, with a $3,000 annual maximum. There are no medical condition limitations.
- In an effort to reduce opioid use and addiction, an Ontario construction union, LiUNA! Local 625, extended coverage for medical cannabis to its retired, disabled workers and dependents.
With the likely legalization of recreational marijuana looming, an increasing number of individuals view medical cannabis as an acceptable form of treatment, which can drive a benefit plan’s usage up. Undoubtedly, the pressure is likely to increase on plan sponsors to provide coverage and the potential cost impact for marijuana could be significant. Insurance companies are still hesitant to provide specifics on the projected cost impact, citing a lack of credible data. Nonetheless, the estimated cost of a regular marijuana user is projected to be around $10,000 per year. Beyond group benefits, medical marijuana in the workplace raises a number of concerns for employers and relevant policies should be proactively reviewed or created.