Recreational Cannabis will be legal in Canada as of October 17, 2018. While this has come with a lot of media attention, many may not realize that Medical Cannabis has been legal in this country since 2001. Over 300,000 Canadians currently treat medical conditions with Marijuana.
This article highlights the most frequently asked questions by employers and key considerations for group insurance plans.
Scientific Evidence of the Therapeutic Value of Cannabis
Growing evidence exists to suggest that Cannabinoids, the active therapeutic ingredient in Cannabis, can effectively treat certain medical conditions including:
• Reducing chemotherapy-induced nausea and vomiting
• Managing spasticity and neuropathic pain associated with multiple sclerosis
• Stimulating appetite for HIV/AIDS patients
• Preventing epileptic seizures
While a number of studies have shown Cannabis to be effective, the amount of testing has not yet reached the level required for other prescription drugs nor has Cannabis been approved as medicine by Health Canada (no Drug Identification Number, commonly known as DIN, has been issued). According to the Canadian Medical Association (CMA), physicians do not have consensus on its value and many remain hesitant to discuss this form of treatment with their patients.
Cannabis-Derived Medication and By-Products
Further scientific studies are underway for prescription drugs which use Cannabiniods as an active ingredient. As clinical trials take place, other Cannabiniod options besides the plant will become available. Additional therapeutic uses may also be discovered.
Common Employer Questions and Concerns Related to Group Insurance
Is the cost of Medical Cannabis reimbursed under employer-sponsored group insurance plans?
Many insurers have been weary of including coverage for Cannabis, pointing to a lack of clinical efficacy vs alternative treatments. Medical Cannabis has been legal for almost 2 decades, yet only this year have just a handful of insurers made coverage options available to employers. Even when possible, coverage is a last resort option, subject to maximums and a long list of medical criteria.
Are employers required to cover the cost of Medical Cannabis for employees and their family members?
Just as there is no legal obligation to insure every prescription drug approved by Health Canada or every type of health treatment, employers are not required to offer coverage for Medical Cannabis under their group insurance plans.
If an employer elects to add Medical Cannabis coverage, can this affect the cost of group insurance plans?
Current Cannabis costs vary between $8 and $12 a gram depending on the licensed producer and type of product. Assuming an average consumption of 1 to 3 grams per day, a regular user can incur close to $10,000 in costs per year. Even with health pooling mechanisms or stop-losses in place, this type of claim can cause group insurance premiums to increase, particularly for smaller groups. For this reason, reimbursement is typically limited to a fairly low annual maximum and subject to specific eligibility criteria.
What are other employers doing in respect to Medical Cannabis insurance coverage?
To date, few employers have added coverage for Medical Cannabis under their group insurance plans.
Now that Cannabis is legal, researchers will have more flexibility to conduct studies in order to test its effectiveness and develop additional cannabis-derived prescription drugs.
As much will change within the coming years, a more conservative ‘wait-and-see approach’ is recommended, unless an employer has a strong philosophical inclination to include Medical Cannabis in their group insurance plan.
Available Group Insurance Coverage
When available, Medical Cannabis is never a default option and remains available at the discretion of the employer. Benefits are payable under the health plan not the prescription drug plan, as Medical Cannabis has not been issued a DIN. Coverage is typically limited to a fairly low annual maximum for specific medical conditions only, and is subject to prior authorization and step therapy.
This said, Medical Cannabis is on Canada Revenue Agency’s list of eligible medical expenses, making it possible for patients to apply for the Medical Expense Tax Credit when filing their income taxes annually. This also means that the cost of Medical Cannabis may be reimbursed under Health Care Spending Accounts (HCSA) administered by insurers.
As insurers’ coverage criteria vary, we have included links to some of their respective websites below. We also encourage you to reach out to us to discuss your own workplace situation, objectives and concerns.
Medical Cannabis @ Sun Life Financial as at March 1, 2018
Medical Cannabis @ Greenshield Canada as at March 26, 2018
Medical Cannabis @ Manulife Financial as at September 2018
Medical Cannabis @ Great-West Life estimated launch January 2019