Massachusetts’ highest court ruled Tuesday that a workers’ compensation insurer cannot be required to reimburse a claimant for the cost of marijuana he used to curb chronic pain from a workplace accident, as long as the substance remains illegal under federal law.
While the Supreme Judicial Court’s ruling is in line with decisions by several other states, courts and lawmakers in some jurisdictions are moving in the opposite direction. A New Jersey appellate court ruled in January that the federal law against marijuana has no bearing on an employer’s duty to provide appropriate care to a workers’ compensation claimant. Bills pending in the New Jersey and New York state legislatures would require insurers to reimburse claimants for the cost of marijuana used for therapy.
The Massachusetts ruling ensures that insurers are off the hook for the cost of pot, at least until Congress decriminalizes the drug. The court said the federal Controlled Substance Acts makes possession of marijuana, or even conspiring to possess, a crime punishable by up to a year in prison and a fine of at least $1,000.
“It is not unreasonable, given the current hazy regulatory environment and shifting winds of federal enforcement, for insurance companies to fear that paying for a claimant’s marijuana could expose them to potential criminal prosecution,” the Supreme Judicial Court said.
Workers’ compensation claimant Daniel Wright brought the issue to the court’s attention when he appealed a ruling by the Industrial Accident Review Board to deny his request to dip into funds from a lump-sum settlement with his workers’ compensation insurer to cover the $24,267.86 he had spent on marijuana over a 19-month period.
Wright injured his back while working as an electrician’s apprentice in 2012 and reinjured his back in 2014. He settled his workers’ compensation claim with Central Mutual Insurance Co. in 2016. The carrier created a trust fund to cover Wright’s cost of treating his work injury.
Wright said marijuana relieved his chronic pain and allowed him to avoid the use of opioids. The court said it found his testimony credible, but federal law prevents the state from requiring a third party to pay for federally controlled substance.
The court noted that although Congress passed legislation in 2014 that prevents the U.S. Justice Department from using any funds to take action against states that had legalized medical marijuana, but said that law expires on Dec. 11. What’s more, the Justice Department has changed its stance on enforcement of marijuana laws several times during the course of two administrations, the court said.
“It is one thing to voluntarily assume a risk of Federal prosecution; it is another to involuntarily have such a risk imposed upon you,” the opinion says.
Courts in California, Delaware and Maine have also cited the federal criminal law against marijuana in decisions that found insurers are not liable to pay for the drug.
Ironically, the New Jersey Superior Court Appellate Division noted the same legislation as the Massachusetts decision in its opinion finding that an employer was required to pay for the drug.
In Hager v. M&K Construction, the appellate panel said that there is no evidence that the federal government will take enforcement action against insurers or employers for reimbursing claimants for marijuana. Moreover, the court said the state legislature specifically allowed health insurers to deny claims for marijuana, but it did not enact any such prohibition for workers’ compensation carriers or employers.
The New Mexico Supreme Court issued a similar ruling in 2014. After that, the state Workers’ Compensation Administration adopted a fee schedule fixing the price of pot at a maximum of $12.02 per gram.
The New Jersey legislature may also be on the verge of codifying the marijuana-friendly policy set by the court.
New Jersey Assembly Bill 1708 would require workers’ compensation automobile and health insurers to provide coverage for the use of marijuana unless the federal government intervenes to enforce the federal law that bars the sale or possession of the plant. The bill passed the Assembly Financial Institutions and Insurance Committee in February and passed the Assembly Appropriations Committee on Monday.
Similarly, New York Assembly Bill 2824 would classify marijuana as a prescription drug and require workers’ compensation insurers and state health insurance plans to cover the cost.
“For thousands of patients, medical marijuana is a safer and more effective medication than other drugs, especially opioids,” says a justification statement by the bill’s author, Richard N. Gottfried, D-Manhattan. “While it can be prohibitively expensive for many patients, especially in the absence of insurance coverage, it may often be less expensive than what their insurance coverage pays for other medications.”
According to the National Council on Compensation Insurance, marijuana is legal for recreational use in 11 states and for medical use in an additional 33. Also, 14 states allow the medical use of cannibidiol, a non psychoactive form of marijuana that is said to provide pain relief. Only three states — Idaho, Kansas and Nebraska — ban the use of marijuana in any form, or for any reason.
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