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Medical Marijuana Costs Reimbursable In Workers’ Compensation Scenario – Cannabis & Hemp

cannabisnews by cannabisnews
May 11, 2021
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United States:

Medical Marijuana Costs Reimbursable In Workers’ Compensation Scenario

11 May 2021


Troutman Pepper Hamilton Sanders


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Q: Is medical marijuana an expense reimbursable by the
employer?

A: For New Jersey employers, the answer is
likely yes. Weednews reports that as of January 9, New
Jersey and 34 other states have legalized marijuana for medical
use, although it remains a Schedule 1 controlled substance at the
federal level. As a result, patients have had to pay out of pocket
for medical marijuana, as insurers contend that covering the cost
would violate the federal prohibition on marijuana under the
Controlled Substances Act (CSA). Recently however, the New Jersey
Supreme Court unanimously affirmed the ruling in Hager v.
M&K Construction
, 462 N.J. Super. 146 (App.
Div.)
, that an employee injured in the workplace is eligible
to have medical marijuana costs reimbursed by his/her employer
under New Jersey’s state workers’ compensation laws.

Vincent Hager (Hager), an employee of M&K Construction,
sustained multiple injuries resulting in chronic pain when a truck
dumped cement on him. In 2016, Hager was prescribed medical
marijuana as therapy to ease his pain and wean him from the use of
opioids. M&K appealed a workers’ compensation order,
asserting that it was not responsible for reimbursing Hager’s
expenses for medical marijuana because the CSA preempts the New
Jersey Compassionate Use Medical Marijuana Act (MMA) and that
reimbursement of medical marijuana expenses would, in fact,
constitute aiding and abetting illegal activity. Further, the
company argued that despite the legalization of medical marijuana
use in 2010 under the MMA, the MMA does not require private health
insurers or government medical assistance programs to cover the
costs of medical marijuana.

Noting that a recent congressional budgetary provision has
effectively suspended the CSA with respect to the MMA, the New
Jersey Supreme Court disagreed with M&K’s arguments, and
affirmed the appellate court’s decision upholding the
workers’ compensation order for reimbursement of Hager’s
medical marijuana expenses. “Because we conclude the order
does not require [employers] to possess, manufacture or distribute
marijuana, but only to reimburse petitioner for his purchase of
medical marijuana, we discern no conflict between the CSA (federal
Controlled Substances Act) and MMA (the New Jersey Compassionate
Use Medical Marijuana Act).” The Court further determined that
the plaintiff’s use of medical marijuana was “reasonable
and necessary,” and rejected M&K’s claim that
reimbursing Hager would subject it to potential criminal liability.
“Reimbursing Hager under court mandate can hardly be
interpreted as M&K ‘elect[ing]’ to aid in Hager’s
possession of marijuana, contrary to federal law . . Rather, it is
being compelled to do so by the order.” Vincent Hager v.
M&K Construction (A-64-19) (084045).

In an attempt to codify the Hager decision, New Jersey
lawmakers have advanced a bill (A1708) that would require
workers’ compensation and personal injury protection (PIP) auto
insurance benefits to cover medical marijuana expenses under
certain circumstances.

With the vast majority of states already having legalized
medical marijuana use, the implications of Hager may be
widespread, and other states may follow New Jersey’s lead.
Further, state courts will need to determine to what extent the CSA
does not preempt state medical marijuana laws and the job
protections afforded employees who use marijuana for medical
treatment.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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