Health & Science

Mass. High Court Rejects Medical Cannabis Insurance

By Willis Jacobson
Oct 29, 2020
OAKLAND, CA - JANUARY 16: A worker looks through a bag of marijuana that will be used to make marijuana infused chocolate edibles at Kiva Confections on January 16, 2018 in Oakland, California. Less than one month after recreational marijuana sales became legal in California, dispensaries are reporting a shortage in pot edibles. The number of manufacturers in the state has been reduced by nearly two thirds due to new regulations and state approved potency levels. (Photo by Justin Sullivan/Getty Images)

The Massachusetts Supreme Judicial Court ruled this week that insurance companies are not obligated to reimburse injured employees for MED expenses. It’s the latest ruling on medical cannabis insurance, an issue that lawmakers are grappling with in several states.

Daniel Wright brought the case to the Massachusetts high court with an eye on receiving reimbursement for more than $24,000 in MED expenses he incurred while treating chronic pain he says was brought on by workplace injuries in 2010 and 2012. The court sided with earlier decisions in the case and rejected Wright’s workers’ comp claim on grounds that the state’s MED program does not require such reimbursements, and that forcing the reimbursements would be akin to compelling insurance companies to break federal law.

The decision (read it here), delivered Tuesday, highlights the discrepancies that MED users can face when seeking insurance reimbursements. Regulators and/or judges in multiple states have agreed with Massachusetts that insurance carriers aren’t liable for pot-related expenses, but some state courts and lawmakers have taken the opposite view.

In Massachusetts, the justices wrote in their order that the state specifically avoided including reimbursement requirements in its regulations in an effort to not require third parties to become involved in the procurement of a federally illicit substance.

“It is one thing for a state statute to authorize those who want to use medical marijuana or [to] provide a patient with a written certification for medical marijuana, to do so and assume the potential risk of federal prosecution; it is quite another for it to require unwilling third parties to pay for such use and risk such prosecution,” read the decision. “The drafters of the medical marijuana law recognized and respected this distinction.”

The ruling likely marked the end of the line for Wright, who was looking for the court to overturn prior denials from an administrative judge and the state’s Department of Industrial Accidents. Those previous denials were based on similar grounds as the denial from the state’s high court.

Even in issuing the denial, however, the Massachusetts Supreme Judicial Court noted in its order that the current legal landscape for MED law “may, at best, be described as a hazy thicket,” and that the U.S. Department of Justice has added to the confusion with several changes to its enforcement practices, “leaving in place no clear guidance.”

The justices wrote that they reviewed the MED statutes of 22 other states and found that they also did not include language in their laws that required insurance reimbursements.

That could soon change, however.

Courts in New Jersey and New Hampshire over the past two years have ruled in favor of cannabis reimbursements in workers compensation claims. New Jersey has also advanced a bill that would require workers’ compensation, personal injury protection and health insurance coverage for the use of MED under certain circumstances. The requirement would be dropped, according to the bill, upon intervention by the federal government. 

That New Jersey bill, which was first introduced in January, was reported out of the state’s Assembly Appropriations Committee on Monday. It will next go to state lawmakers for potential adoption.

A similar bill is pending in New York.

While those legislative proposals have been hailed by some workers’ rights advocates and supporters of cannabis legalization, some members of the insurance industry have raised concerns.

The American Property Casualty Insurance Association (APCIA), which says it represents nearly 60% of the U.S. property casualty insurance market, filed an amicus brief with the Massachusetts Supreme Judicial Court in April that called on the court to uphold the previous denials in the Wright case.

“Prudent companies do not risk violating criminal laws,” read a portion of that brief. “No insurer (or employer) should be forced to take such a risk, simply to participate in the workers’ compensation insurance marketplace.”

Still, there are some options for MED – and even REC – users looking to cut down on expenses.

Novus, a Miami-based company, offers “Cannabis MedPlans” that aim to fill the gaps in areas that traditional insurance plans don’t cover. The plans, which start at $20 per month for CBD-only and go up to $39 per month for the most comprehensive THC and CBD package, are open to everyone in state-legal markets.

Novus recently began partnering with Canna Group LLC, which specializes in electronic payment systems for high-risk businesses, to expand the offerings, the companies announced Thursday.

Sami Spiezio, the founder of Canna Group LLC, said the plans function a lot like discount cards and save consumers about 55% on cannabis costs on average. 

He acknowledged that federal legalization could spell the end for such plans, as more traditional insurance carriers would enter the space, but said his team and Novus were “excited about the fact that we can provide something now.”

He noted that even with federal legality, it will still take time for a national regulatory framework to be developed and put in place.

“We feel we’ve got a three- to four-year window to be able to provide a service to people,” Spiezio said. “[After] that point, they’ll be able to get it through their traditional means.”

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