Today, we’re going to talk about marijuana coverage and benefits plans.
Because of recent legislation changes around marijuana legalization, this is a hot topic for many employers. In this article, we’ll focus on medical marijuana, and look at how it fits into your employee benefits landscape.For more information on how employers can prepare for marijuana legalization as a whole, check out this article by our good friends at Chemistry Consulting.
So let’s get started by looking at key medical marijuana coverage considerations.
How Does Medical Cannabis Work Under Group Health and Benefit Plans?
Today, your employees can get medical marijuana through health practitioner prescriptions. They can also buy it from licensed producers.
As an employer, you might find navigating this challenging from a health benefits perspective.
Here’s why: Because Health Canada hasn’t issued Drug Identification Numbers (DIN) for marijuana-related products yet, you can’t process claims through the prescription drug portion of your benefits plan. Instead, if you want to provide coverage, you need to consider other options, such as:
- the Medical Reimbursement or Cost Plus benefit associated with your extended health plan, or
- through Health Spending Accounts (HSAs).
Why are HSAs a good place to start?Since expense regulations for HSAs rely on the Canada Revenue Agency’s guidelines—and specifically the eligibility requirements of the Medical Expense Tax Credit—medical marijuana claims are generally considered eligible. With HSAs and Cost Plus accounts, employers can set a maximum budget for marijuana-related expenses.
(Related post: How Health Care Spending Accounts Benefit Your Company)
How Can Employees Claim Marijuana Under their Group Benefits Plan?
HSAs aren’t the only options for coverage. In some cases, you can add a separate category for medical marijuana expenses to your company’s existing group benefits plan.
Did you know:
Several insurers are already developing new categories to specifically address this new form of claim. In Canada, Sun Life was the first provider to make the change, and others, like Green Shield, are quickly following suit
Here’s an important tip:
Claim policies and coverage details can vary significantly, so read up on your provider’s offerings before making any changes. You’ll soon see that medical cannabis reimbursement isn’t just a matter of saving up receipts and filing a claim form!
So let’s break down the process, so you can see what it looks like:
Step 1: Add Coverage to Your Existing Health Plan
First, your policy needs an amendment (with pricing considerations) to include this type of coverage to your plan.
Although HR professionals are acutely aware of the Duty to Accommodate, this isn’t currently a legal consideration when offering coverage for medical marijuana under a group benefits plan.
2. Check Eligibility Before Filing ClaimsIt’s important to know that, adding coverage to your plan doesn’t result in an open-ended opportunity for employees to submit marijuana-related claims. The current criteria for eligibility is very strict, and a prior approval process is in place.
For example, Sun Life only offers coverage for specific therapeutic conditions, including:
- palliative care, and
- rheumatoid arthritis
In addition, medical marijuana users have to be registered to qualify for coverage.
So what’s the bottom line?
If an employee uses cannabis for any of the above conditions, but they aren't registered with Health Canada under the Access to Cannabis for Medical Purposes Regulations (ACMPR), they won’t be able to claim expenses.
Tip: Because cannabis has no DIN, medical marijuana expenses are not considered part of the drug program, but part of the medical equipment and services category.
3. Know the Maximum Annual Claim AmountFinally, remember to stay on budget! For example, with Sun Life, the maximum annual range for medical marijuana expenses is $1500 to $6000 per person. Generally speaking, the higher the reimbursement limit, the higher the premium cost.
What Are My Next Steps as an Employer?
It will take some time to fully understand how medicinal marijuana will impact employee benefits. But although many unknowns remain, you can prepare your organization for what’s to come.
Stay up-to-date on cannabis news so you can be proactive and react quickly to any changes. Also, make sure you understand how your insurance carrier treats this type of coverage. Not all providers handle marijuana claims the same way. Finally, work with your benefits advisor to review your plan design and, if necessary, develop a strategy for managing medical marijuana-related costs.
It’s also vitally important to establish reasonable policies and procedures around the use of marijuana, both medical and recreational. This will ensure the health and safety of all your employees.
Although insurance companies remain hesitant to provide specifics around cannabis coverage, this will have to change soon. Legalization of recreational marijuana is just around the corner, and medical use is quickly becoming more socially accepted.
Of course, medical marijuana in the workplace raises a number of concerns for employers beyond group benefits. By being proactive and reviewing, developing, and implementing effective marijuana policies today, you’ll improve communication with your employees and prepare your organization for the future—whatever that looks like.
It will help you learn how the right employee benefits advisor is good for business, and how to choose the best one.