As the broader legislative and societal underpinnings related to marijuana use undergo rapid shifts, employers and the courts are adapting. It seems almost every month brings news about an organization that’s extending medical plan coverage either proactively — such as Shoppers Drug Mart, Veterans Affairs Canada and the Ontario Public Service Employees Union — or in reaction to the decision of a court or tribunal.
Even though many of the details are pending, the future legislative framework is now clear enough that employers need to adapt their human resources policies and benefits plans to the new norm.
The starting point for employers today is to understand how their existing programs and practices can and should adapt to an environment that includes both medical marijuana and legalization of the drug for recreational use. When it comes to human resources policies, employers should look at them from two perspectives:
- How do they currently deal with employees who take legal prescription drugs, such as painkillers, that may affect their performance at work? They need to align their practices around medical marijuana with those policies.
- How do they currently manage employees who take legal, non-medical substances, such as alcohol, that may affect their performance? Again, they need to align their practices around recreational marijuana with those policies.
As a result, employers need to review and amend a range of policies in areas such as drug testing programs, impairment at work and requirements for safety-sensitive positions. Without the element of illegality, marijuana fits nicely into existing frameworks.
Taking that approach, one topic that appears regularly with respect to medical marijuana and safety-sensitive positions is the lack of reliable ways to test for impairment. People will often point to the ability to do breathalyzer tests for alcohol impairment as the point of comparison. But once we shift the comparison to opioids instead of alcohol, the difficulty in testing for impairment becomes more meaningful.
Many of those policies have always required subjective observation and difficult conversations to manage them properly in the workplace. Adding marijuana to the policy may raise the number of those conversations but it doesn’t change their underlying nature. If an employee had dental surgery and is coming to work taking a painkiller, an employer should treat the person similarly, regardless of whether the drug is Percocet or medical marijuana.
Issues for benefits plans
In light of a ruling by the Nova Scotia Human Rights Commission in January, employees are increasingly asking why benefits plans don’t cover medical marijuana if, like other drugs, it requires a prescription. It’s a good question. There are a couple of aspects to the answer.
The first is that a prescription drug typically needs to have a drug identification number assigned by Health Canada to be eligible for coverage. Medical marijuana doesn’t have one.
Second, a medical marijuana patient using two or three grams per day will spend up to $10,000 a year, so the costs are significant. The issue arose in the 2016 auditor general’s report, which indicated that Veterans Affairs was on track to spend $25 million on medical marijuana in 2016/17.
Lastly, most benefits plans don’t cover every drug with a drug identification number without limits or restrictions. When it comes to medical marijuana, the following are the four most common drug plan features that may apply:
Prior authorization: The plan covers a drug subject to certain medical criteria. Prior authorization is common for highcost drugs, in part to ensure a member is using them for the approved medical conditions.
Annual limits: For some drugs, plans will identify annual limits to recognize that a medical value exists while also acknowledging the possibility that some members are taking the product outside of the requirement for medically necessary use. Examples include drugs for erectile dysfunction and weight loss.
Managed formularies: A growing number of Canadian plans are implementing formularies to denote a list of drugs the plan does and doesn’t cover.
Exclusion of over-the-counter drugs: Most benefits plans don’t cover products that don’t legally require a prescription, such as non-prescription painkillers. As of July 1, 2018, marijuana won’t legally require a prescription.
Just like every other element in a benefits plan, each employer will need to review what makes sense for its organization. As a result, different organizations will come to different conclusions.
To get there, here are some questions plan sponsors should be asking today about how they’ll deal with covering medical marijuana after July 2018:
- Is the comparison to over-the-counter drugs the best analogy? Should they exclude marijuana on that basis?
- Do they have a managed formulary? If they do, how will the formulary manager determine the costs and benefits of medical marijuana versus other therapeutic alternatives?
- In the absence of Health Canada prescription guidelines, how might they apply prior authorization?
- Does an annual limit make sense? On what basis should they set the limit to balance employees’ medical needs and the potential increase in cost?
The final question that employers need to ask, but they likely can’t answer today, is whether medical marijuana will increase or decrease overall plan costs. There’s some anecdotal evidence that employees who take medical marijuana reduce their use of other prescription medications. There’s also a hypothesis that use of medical marijuana in some cases will help employees manage their conditions better and thus lead to reduced absenteeism or greater productivity at work. It will be important to test those hypotheses in the future as actual Canadian benefits plan data arise.
A proactive approach
With or without coverage under the core benefits plans, medical marijuana is eligible for reimbursement today if the employee has a health-care spending account. Regardless of the approach employers choose, plan sponsors may decide there’s value in communicating that fact more proactively to employees.
And beyond the benefits questions, the challenge for employers of having one legal framework today and another in a few months is the need to have some interim policies in place. But what the situation doesn’t create is a reason to delay getting post-July 2018 strategies and policies in place. Using the right perspective should enable employers to review and adapt existing policies now.
Tim Clarke is the founder of TC Health Consulting.
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