Marijuana Legalization Update: Five Things You Need To Know

See below from our friends at NCCI regarding a very popular topic these days…Cannabis.

Marijuana legalization continues to be a hot topic in 2019. Most states have legalized marijuana in some form, and there is much speculation around federal activity. NCCI is monitoring legislative, judicial, and other developments as this issue evolves. Our latest update addresses the top five questions on the minds of our workers compensation industry stakeholders.

  1. What is the status of marijuana legalization? Marijuana is still illegal at the federal level and remains classified as a Schedule I drug under the federal Controlled Substances Act. However, there is ongoing activity at the federal and state levels to address marijuana legalization and related issues. The current status of state marijuana legalization is shown in the map below:
    • Recreational marijuana is legal in 10 states plus DC
    • Medical marijuana is legal in 33 states plus DC
    • CBD oil/non-psychoactive forms of marijuana are legal in an additional 14 states under certain circumstances
    • Three states currently do not have laws legalizing marijuana in some form, but two of them (Kansas and Nebraska) have pending legislation
  2. What is happening legislatively in 2019? NCCI is tracking marijuana-related legislation in more than 20 states, as well as at the federal level.Federally, legislation to decriminalize marijuana is pending before Congress. Decriminalization at the federal level is viewed as unlikely in the short term. Meanwhile, Congress is also considering measures that allow for state regulation of marijuana without federal interference and provide protections to financial institutions that serve marijuana-related businesses that are legal under state law.Federal legislation providing protections to financial institutions is already advancing. On March 28, the House Financial Services Committee approved H.R. 1595, which provides financial institutions and insurers that provide services for legitimate cannabis-related businesses with a safe harbor from criminal prosecution.Regarding state legislative activity, as of April 1, an additional 15 states are considering legalizing recreational marijuana and 8 are considering legalizing medical marijuana. NCCI is also tracking several state bills addressing the issue of medical marijuana reimbursement in workers compensation.
  3. Are insurers required to reimburse for medical marijuana in workers compensation? One of the emerging workers compensation issues is whether medical marijuana is reimbursable. Insurers are increasingly receiving requests to reimburse for medical marijuana use for workers compensation treatment. Given the friction between state and federal law, states are faced with the challenge of whether to approve medical marijuana treatment for work-related injuries. This issue is being addressed through legislation as well as in the courts. Over the years, states such as Connecticut, Minnesota, New Mexico, and New York have permitted reimbursement for medical marijuana in certain circumstances. New Mexico has even established a maximum reimbursement amount for medical marijuana in its workers compensation fee schedule. Other states, including Florida and North Dakota, have enacted laws prohibiting payment of workers compensation benefits for medical marijuana. Louisiana passed legislation in 2018 which provided that medical marijuana reimbursement is not required for workers compensation purposes.During the 2019 legislative session, several states—including Hawaii, Kansas, Maine, Maryland, New Jersey, New York, and Vermont—have considered or are considering legislation to authorize the reimbursement of medical marijuana in workers compensation.On the other hand, Kentucky and Oklahoma lawmakers proposed legislation similar to the Louisiana law, which does not prohibit reimbursement, but also does not affirmatively require employers and workers compensation insurers to pay for medical marijuana.
  4. Have there been any new rulings from the courts regarding medical marijuana reimbursement? In addition to state legislation, state courts are addressing the issue as to whether medical marijuana is reimbursable in workers compensation. In March 2019, the New Hampshire Supreme Court held that the state’s medical marijuana law does not prohibit reimbursement under workers compensation. However, the court did not rule that the insurer is required to reimburse. The supreme court remanded the case to the compensation appeals board to provide additional legal support on the federal issues involved in the case; specifically, whether federal law would be violated if the insurer is ordered to reimburse for the payment of medical marijuana.In 2018, the Maine Supreme Court ruled in the Bourgoin v. Twin Rivers Paper Co. case that employers are not required to reimburse for marijuana as a workers compensation treatment. The court determined that because marijuana remains illegal under the federal Controlled Substances Act, Maine’s medical marijuana law is preempted and cannot be used as the basis to require reimbursement.The Massachusetts Department of Industrial Accidents and the Vermont Department of Labor have also recently denied reimbursement for medical marijuana treatment for workers compensation claimants.
  5. Have there been any new developments regarding research studies or a test to determine impairment? One outstanding workers compensation issue is whether medical marijuana is a viable alternative to opioids for pain management and getting employees back to work sooner. Since marijuana is still illegal under federal law, research has been limited to date. Another outstanding issue is how to determine “impairment” for marijuana and the impact on workers compensation benefits if an employee is injured on the job and tests positive. There are efforts under way to develop tests similar to breathalyzers and other methods currently available to test blood alcohol levels, which would better help define what could be considered appropriate “impairment” levels. Until those tests are fully developed and implemented, states and state courts are addressing this issue on a case-by-case basis. For example, in November 2018 the Oklahoma state court of appeals ruled in Rose v. Berry Plastics Corp. that the presence of tetrahydrocannabinol (THC) in an employee’s blood after a workplace accident does not automatically mean that the employee should be denied workers compensation benefits due to impairment. There is also pending legislation in Oklahoma (SB 305) which, among other things:
    • Clarifies instances in which an employer may take action against an employee or applicant who tests positive for marijuana
    • Provides that employers will not be required to permit or accommodate the use of medical marijuana on their premises or reimburse a person for costs associated with the use of medical marijuana
    • Authorizes employers to have written policies regarding drug testing and impairment

The legislation has passed the Oklahoma Senate and is awaiting action in the House.NCCI will continue to track these developments.

Stay tuned to ncci.com for updates on marijuana legislation and other hot topics throughout the year.

https://www.ncci.com/Articles/Pages/II_Insights_MarijuanaFocusupdate.aspx

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Sharlie Reynolds

Sharlie Reynolds

Executive Vice President at Libertate Insurance, LLC

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