California employers have been dealing with the ramifications of legal medicinal marijuana for years. Now that voters have passed Proposition 64, legalizing so-called “recreational” marijuana use, the CWCI expects that employers face a new reality of potentially outdated workplace policies, employee accommodation, and the applicability of drug-free workplace guidelines. Workers’ compensation carriers and self-insured employers in particular must begin to consider the impact that Proposition 64 may have on claims processing.
According to the CWCI report “Working Through the Haze: Implications of Legalized Marijuana for California Workers’ Compensation System,” last August the National Conference of State Legislatures adopted a resolution asking the federal government to remove marijuana from Schedule I. But the following day, the Drug Enforcement Agency announced that it would not remove marijuana from its Schedule I classification, reaffirming its determination that the drug’s therapeutic value has not been scientifically proven. Thus it remains illegal under federal law. As a Schedule I drug under the Controlled Substances Act, marijuana may not be prescribed, administered, or dispensed, and it is illegal to possess, use, purchase, sell, or cultivate.
Thus, even in states where medical marijuana is legal, doctors can only write a “recommendation” for the remedy.
But the federal government has decided it has higher priorities than enforcement of its anti marijuana stance. The US Department of Justice has actually formalized a “hands-off’ policy, leaving enforcement of minor drug activity up to the states, while the federal government’s priorities have been restricted to eight significant issues, including the operation of drug cartels, narcotics activity leading to violence, and preventing drugs from being provided to minors. “For states … that have enacted laws to authorize the production, distribution, and possession of marijuana, the Department expects these states to establish strict regulatory schemes that protect the [priority] interests identified by the Department,” leaving the decision on whether to enforce restrictions on marijuana being sold to minors or trafficked to other states, federal authorities could step in with enforcement. Otherwise, states can decide to legalize, tax, and regulate marijuana.
Out of 25 states that allow medical marijuana, only five explicitly exempt workers’ compensation payers from liability for medical marijuana. And at least one state has no legislation or judicial case law either requiring or prohibiting workers’ compensation payers from reimbursing an injured worker for medical marijuana.
The remainder of the states that allow medical marijuana, including California, rely on analogous statutory language that precludes a private health insurer from being forced to pay for marijuana. In California, Health and Safety Code Section 11362.785(d) specifically provides that nothing in the state’s medical marijuana program shall require any other health insurance provider or health care service plan to be liable for reimbursement for the medical use of marijuana.
But there may be a developing trend toward compelled compensation, if other states follow the lead of New Mexico. Beginning with a New Mexico Supreme Court case in 2014, New Mexico has required reimbursement for medical marijuana pursuant to that state’s workers’ compensation statute requiring provision of “reasonable and necessary” medical treatment services to an injured worker.
And the trend toward finding compensability for marijuana treatment seems to be spreading. Beyond New Mexico, workers’ compensation payers have been required to reimburse payments for medical cannabis in Minnesota, Maine, Connecticut, and Massachusetts. In two cases from Maine, for example, the Appellate Division of the workers’ compensation system upheld rulings from an administrative law judge that marijuana could be a compensable form of medical treatment for injured workers.
Only two reported cases at the California WCAB have addressed a claims administrator’s liability for marijuana treatment. The first, in 2012, Cockrell v. Farmers, did not directly resolve the question of compensability for medical marijuana. Instead, the Appeals Board merely returned the matter to the trial level for consideration of the impact, if any, of the prohibition against payment for marijuana by health insurance providers under Health and Safety Code §11362.785(d). It appears the case was thereafter resolved by settlement. But in 2013, a second case, Pedro de Dios v. Carroll’s Tire Warehouse, specifically found that the workers’ compensation carrier was not liable for reimbursement of medical marijuana under the Health and Safety Code exemption.