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Claims Management

Managing Medical Marijuana Reimbursement for Workers’ Compensation Claims

Complexities around medical marijuana show no signs of easing, leaving workers’ compensation insurers in the dark when it comes to reimbursement policies. What will it take to clear the air?

August 14, 2023

While 38 jurisdictions, including D.C., have legalized medical marijuana, only six of those 38 require workers’ compensation carriers to reimburse for medical marijuana. In fact, six of these jurisdictions prohibit reimbursement of any kind in relation to medical marijuana usage in workers’ compensation cases.

“Medical marijuana is still a Schedule I substance under the Controlled Substances Act (CSA) and is not an approved treatment through the Food and Drug Administration (FDA),” said Anthony Bustillo, Assistant Vice President, Data Analytics – Deputy Chief Risk Officer at Safety National. “This classification leaves insurers hesitant to elect coverage, but in states without any reimbursement policy regulations, it can leave insurers open to court challenges.”

Here we cover the current limitations of medical marijuana usage in workers’ compensation claims and what the future may hold for increased adoption.

The Continued Gray Area

TPAs will typically deny coverage of medical marijuana usage so as not to contradict federal regulations, which could create an inadvertent liability. They also rely on the advice of their clinicians, which wholly do not recommend it as a treatment option due to possible contraindications. Additionally, TPAs will also look to the position of employers, and most employers do not support this treatment option due to safety-sensitive positions or federal funding or contracts.  However, TPAs have seen few requests for reimbursement thus far, so not many issues have occurred.

How Usage Can Impact Employment

Many states have adopted laws protecting employees using medical marijuana. Anti-discrimination laws, disability protections, and workplace accommodations are part of these protections. However, these vary widely by state, and often court decisions will still favor employers in states with undefined restrictions, even when an employee’s use is outside of work hours. Further complicating the issue is the unreliability of drug testing for tetrahydrocannabinol (THC). Unlike a blood alcohol level (BAC) provided by a breathalyzer, no test can accurately determine an employee’s impairment level due to metabolic factors, like body fat or dehydration.

Employment for medical marijuana users can depend wholly on the nature of their job. For example, employers working with federal agencies, grants, or contracts are confined to the parameters of the Drug-Free Workplace Act of 1988, which holds a zero-tolerance policy for drug use. For employers operating outside of federal contract limitations, influences like societal views, the state of current recruiting and retention, and state protections can all play into their policies around marijuana use.

Opioids vs. Medical Marijuana

Medical marijuana use is often defended with the claim that it is less addictive than opioid use in pain management. While that benefit may be true, the overall comparison is not so simple. Due to its classification as a Schedule I drug, research on medical marijuana is extremely limited. The enactment of the Medical Marijuana and Cannabidiol Research Expansion Act could change that, allowing research into its effectiveness as a treatment.

While opioids have been studied at length, a significant risk is involved with usage, including drug dependency, addiction, and even overdose. Marijuana has shown to be a promising alternative, with fewer side effects, but more research is needed on its effectiveness, which will require reclassification as a Schedule II.