When it comes to issues such as medical marijuana, it’s important to draft tightly worded benefits plans, according to a Toronto lawyer.
Ross Gascho, a partner at Fasken Martineau DuMoulin LLP, was one of the speakers at the firm’s pension, benefits and litigation seminar in Toronto on Thursday. Gascho looked at two case studies involving coverage of medical marijuana. The first, Hamilton [City] v. Hamilton Professional Fire Fighters’ Association, involved a denial of reimbursement for medical marijuana that centred on the lack of a drug identification number. In the second case, Skinner v. Board of Trustees of the Canadian Elevator Industry Welfare Trust Fund, the Nova Scotia Human Rights Commission ordered the plan to cover the drug. The ruling is now under appeal.
“From a benefit plan perspective, the two cases show the importance of having tightly drafted benefit plans,” said Gascho.
“There is less focus on how benefit plans are worded. Generally that’s my observation, that there’s much more focus on how retirement and savings plans are worded but less on benefits plans. And yet, when you look at the words that were used in the Hamilton case, where they were clear — for example, that the drug had to have a drug identification number — that was much more crisply drafted than in the elevator case in which it just said, ‘Well, it has to be medically necessary,’ even though they were probably trying to get to the same result,” he added.
“In many instances, the employer is relying on a standard form document that the insurance company has prepared. In other instances, the employer or the employer’s consultant has prepared a document that sets out the terms of the plan. But as the two cases I looked to show, there are significant differences in terms of, or there can be significantly different results arising directly out of, how those things were drafted. I think the marijuana cases are an object lesson in the importance of how the plan is drafted.”
Gascho also highlighted the importance of language, suggesting banal wording can have unintended consequences.
“We see this over and over again in pension plans as well, that what were relatively innocuous statements turn out to have legal effect. In this case, the relatively innocuous statement in the elevator decision was that the plan has done well financially and, as a result, the trustees have been able to extend further benefits over time. I’m sure that when that statement was written, they had no idea that they were going to be creating a legal right for someone to get more from the plan than the trustees thought it provided.”
At the event on Thursday, Gascho also spoke of the challenges ahead as legalization of recreational marijuana approaches.
“I think that [when it comes to] setting the regulations under the Cannabis Act, I’m sure that Health Canada and the Ministry of Health are working furiously to figure out what those are,” he said. “And then, the road bumps will potentially be interpreting them, as happens in all regulatory structures. What’s unusual for Canada is that it is taking a much more comprehensive legislative approach to marijuana than most other countries. It will be interesting . . . once we have regulations and once we’ve been through some cases under the regulations, to see how our framework looks and how well it works relative to other countries.”