Medical Marijuana & Workers Compensation: The Implications of Recent Legislation

April 4, 2017

Now that 28 states have legalized the medical use of marijuana, this legislation will inevitability impact how both employers and insurers handle impending workers compensation claims. Along with this localized legislation, states are also beginning to take additional steps to ensure that prescribed individuals have access to this treatment and that the marijuana being dispensed in these areas is regulated. Most recently, The Pennsylvania Department of Health approved several zoning permits for medical marijuana dispensaries or growing facilities in Pennsylvania, with seven approved for Philadelphia.

Although medical marijuana has become widely accepted as an effective method of pain treatment, especially as an alternative to dangerous opioid prescriptions, the use or possession of marijuana is still considered a federal crime under the Controlled Substance Act of 1970. Due to this conflicting legislation at the federal versus state levels, many insurers and organizations remain unsure about who should pay for this type of treatment, legality issues and if this will further complicate the claims process.

Considerations for Employers & Insurers
Because marijuana is still classified as a Schedule I drug under federal law, many businesses are still questioning if they should – or if they are legally required – to cover marijuana under workers compensation claims.
As issues begin to arise across U.S. courtrooms, this contradictory legislation continues to cloud an already complex decision. As of February 2017, six states in the U.S. have covered medical marijuana under workers compensation. For example, a New Jersey judge recently ordered a lumber company to reimburse an injured employee for medical marijuana prescribed for neuropathic pain in his hand after he suffered an injury from a power saw at the lumber plant. Across the country, Arizona enacted the Arizona Medical Marijuana Act, which states that workers compensation carriers are not required to pay for medical marijuana.

Another major concern is that because marijuana is still classified as a Schedule I drug, it is not approved or regulated by the FDA. With this lack of regulation, it could make it difficult for a patient to follow dosage standards, which could lead to unexpected and detrimental side effects.

Adding to this already complex landscape, it is not clear how the claims process will be affected.  For example, there are risks associated with paying for medical marijuana treatment, including a potential delayed return to work or even addiction. In addition, if an employee’s judgement is impaired due to an incorrect dosage and it results in another accident, the organization could be held liable. The unexpected effects of medical marijuana are especially hazardous in already risky environments, such as manufacturing plants, construction sites or whenever heavy machinery is involved.

Equally important, if an organization does cover the cost of medical marijuana treatments for employees, it further complicates workplace HR policies regarding drug use. Policies will need to be adjusted to ensure that the treated individual does not become a workplace safety hazard. This is especially important for states such as Pennsylvania that will now house newly zoned medical marijuana dispensaries. Because of the proximity of these facilities, an increase in employees seeking this type of medical treatment is inevitable. Considering the changing political landscape, some medical costs could end up shifting from group health coverage to other social programs like workers compensation, also adding to the uptick in the number of employees requesting coverage.

As more states begin to legalize the medical use of marijuana, legislation will most likely be enacted to clarify how this should be treated under workers compensation. As these issues play out in courtrooms across the country, employers will need to work closely with their brokers to understand not only how to best adapt and adhere to this legislation, but also to determine if they should – or shouldn’t – cover medical marijuana under workers compensation.

Lisa L. Talley, ARM
Senior Claims Consultant
The Graham Building
Philadelphia, PA, 19102



We’re happy to answer any and all of your questions. Let us help you find coverage solutions that work best for you.
contact us >