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July 10th, 2018 – The Impact of Marijuana on Employee Benefit Plans & The Workplace
Today, many businesses with benefits and even those without are trying to understand the evolving framework of legal cannabis. Those with benefits are concerned about claims and both are debating their responsibility in terms of access in the workplace.
The history is complex and at times controversial. Cannabis was outlawed in the 20’s at a time of real drug prohibition. In 1999 the Canadian government, recognizing some medical benefits legalized medical marijuana as an exemption to the Controlled Drugs and Substances Act. In 2001 in response to legal challenges, MMAR (Marijuana Medical Access Regulations) was formed permitting home grown for those with doctor referrals. In 2013 Canada evolved that to MMP(urpose)R which basically stopped home grown but allowed for commercial growth for medical purposes. In 2015 after a Charter of Rights and Freedoms challenge, new class exemptions began to allow licensed producers to sell cannabis oil, fresh buds and leaves and allow users to alter different forms. In 2016, Access to Cannabis for Medical Purposes Regulations are formed re-allowing homegrown for medical use rules. 2017’s Bill C-45 will legalize cannabis for recreational use on October 17, 2018.
The question for employers becomes a matter of establishing new HR policies. While there is a lot of hype around what that may entail, the reality is many HR handbooks already cover use of controlled substances while in the performance of duty and marijuana falls under most of those guidelines. The issue for some is that it is far less detectable or obvious and much costlier to test for. In fact many police forces have admitted publicly they will not have the staff training and equipment to properly test drivers for it by the time it goes legal.
In terms of the impact of medical marijuana on employer health plans and drug claims levels there are issues. Currently there’s no DIN’s so covering under the standard portion of an employer drug card for example is not yet up to speed. In addition, while there are many declared benefits of cannabis for health reasons the reality again does not meet the background hype. Many of the suggested treatments are still years away, awaiting clinical studies verifying scientifically that there is an inherent positive remedy produced. This is not uncommon. Many drugs become available for their primary health objective then later get approved for other approved uses.
There’s also the producer landscape. There are a large variety of strains and strengths. There is no patent so wading in for big pharma has taken time while they surveyed the landscape. Without control or patent protection they essentially become farmers. As the products become more complex we will certainly see them participate more in this marketplace.
Currently insurers typically approve marijuana for 3 specific areas; spasticity in Multiple Sclerosis patients, nausea reduction for chemotherapy patients and relief of chronic pain. For sure there will be other areas approved but it will be a gradual process. Marijuana for medical purposes has some safeguards in place as one would suspect. Rules prevent patients from requesting from multiple sources and paperwork documenting the medical need is required. To date only doctors and in Ontario, nurse practitioners can prescribe and dosage is limited to 5 dried grams per day. Most users reported using just 1-3 grams per day. It can only be purchased with the referral from a licensed producer.
So, if an employee can’t walk into the pharmacy and use their drug card how can they make a claim? The reality is very few plan sponsors have added medical marijuana to their base plans. This means your plan likely does not cover it yet. Will that change? Yes, already several providers have added access through specific Health Care Spending Accounts as a mechanism to cover some of these expenses for employees while limiting cost exposure. Employers also have the ability to put claims for themselves and employees through a Cost Plus arrangement.
There have been human rights challenges already to benefit plans being anti-selective by not covering cannabis but generally that doesn’t hold water. An employer has the ability to put a limit on their plan, select a specific formulary they wish to use and this is no different. The bigger HR issue is what to do with an employee prescribed marijuana as their medication that they may take while at work. It will be up to individual firms to determine their own regulations on topics like that. Obviously if operating heavy machinery there may be a higher risk than another employee in an office setting.
There is also the employee’s other situations that come into play. An asthmatic is unlikely to smoke it as a treatment and someone with ongoing depression may not be prescribed it as a common side effect is lack of motivation. Previous high level personal users may be excluded by their physician for fear of dependency. Physicians may also be concerned about liability based on the risk of the employee’s job description or daily life activities if they were higher risk and required a more acute attention level.
Costs to the system should be very minimal for a variety of reasons. The first being the low adoption rate onto benefit plans for a variety of reasons including higher costs than cheaper opioids. Secondly, cost control using caps on HCSA’s and Cost Plus limits plan administrator’s exposure. Next, the drug may not be prescribed by the physician if the employee does not have coverage or it will cost them more than a current opioid option. Lastly may be that in the conditions where it’s adopted for treatment of it may actually represent a very low cost solution for example in the case of preventing spasticity seizures. Really, we’re at the infancy of the potential of cannabis and until more clinical studies show effectiveness for other treatments the cost to the system will not be invasive. Be ready for a slow, evolving process to cannabis as an employee benefit.