Funding medical marijuana

As stigma fades, more employers are looking to add cannabis to employee plans

Funding medical marijuana
Marijuana products are sold at an event in Vancouver in 2017. Credit: Eric Buermeyer (Shutterstock)

Medical cannabis has been legal in Canada since 2001, and is currently used by more than 230,000 Canadians, according to Health Canada.

But recently, more employers have started offering the drug as an employee benefit.

The impending legalization of recreational marijuana has reduced the stigma surrounding the once-illicit drug, said Christine Than, senior consultant pharmacist and drug solution specialist at Aon in Montreal.

“With legalization coming this summer, or a bit later, there’s a bit more awareness,” she said. “There’s more support for it in culture.”

Having companies choose to cover medical marijuana as an employee benefit only accelerates the conversation towards full acceptance, said Than.

“Having one or two employers come into the public space and say, ‘This is something that we have decided to cover’… It kind of raises the question: ‘How about us? Should we be doing this as well?’”

In March, Sun Life Financial added medical marijuana as an option for group benefits plans.

“I would see this as a natural evolution, but one that’s driven by the desire to help people live healthier lives, and by the medical evidence that supports the fact that medical cannabis can help them do that,” said Dave Jones, senior vice-president of group benefits at Sun Life in Toronto.

Shifting mindsets

The company had previously offered coverage for the drug via health-care spending accounts (HSAs), which weren’t as widely available, he said.

Recently, more employers have inquired about offering medical marijuana in an evidence-based manner, with limits on reimbursement levels.

“By offering it as a specific health benefit under the extended health-care plan, rather than under HSAs, you can actually do it that way,” said Jones.

The difference now is that medical marijuana is actually being promoted as a benefit, said Jason Fleming, director of HR at MedReleaf in Markham, Ont.

“Previously under HSAs, it was eligible (as a Canada Revenue Agency eligible medical expense), but certainly not promoted,” he said.

“It was almost eligible by default. What’s happening now is employers and insurers are actively offering this as an item of coverage.”

“I think that in 2018, you’re going to see many more organizations publicly announcing their coverage, and it will still be a relatively small percentage,” said Fleming. “Five years from now, it will be quite common. The ground is shifting quickly.”

Medical marijuana has a higher cannabidiol (CBD) content than recreational marijuana, disassociating it with the euphoric high that recreational users feel as a result of tetrahydrocannabinol (THC).

The way medical marijuana is currently being offered, only patients with specific ailments will have access to the drug, said Than.

“What we’ve observed from the trends of the industry is that whenever this is going to be covered, it tends to be very, very specific, meaning that it would be under prior authorization, so the patient would have to submit medical information to justify the use of that substance,” she said. “It would have to be for very specific indications.”

Plan sponsors looking to add the benefit should ensure that all verifications and approved guidelines are included within the policy, in terms of approved indications, caps, and regular revision of limitations, said Than.

To qualify for Sun Life coverage, for instance, plan users will need to meet conditions listed, said Jones, and medical marijuana will be available to people struggling with cancer, multiple sclerosis and rheumatoid arthritis, or requiring palliative care.

“What we’re really looking for is to make sure it has been prescribed by a physician and it’s being dispensed by a qualified provider of medical cannabis as defined by the government of Canada, and that it is for one of the five conditions that we cover it for,” he said. “As long as they meet that criteria, we’ll accept the claims and pay them.”

Framework, costs

Typical patient consumption varies between one to three grams of smoked marijuana per day, at a cost of $8 to 10 per gram — translating to annual totals of $3,000 and $9,000 per patient, said Than.

“If we’re looking at treatment of pain, it’s so subjective that, of course, there is going to be a wide gap in terms of the maximum and minimum rates,” she said. “It gives you pause when you think that if there’s one claim that would take medical marijuana, it could go up to $10,000 a year — it is a substantial cost.”

Any employer adding medical cannabis to its benefit offerings should expect an increase in plan costs — especially large employers, said Fleming.

“Initially, there will definitely be an increase in costs of their plans,” he said. “Over time, there may be a reduction in other medication costs if people substitute it with cannabis, but I think the next few years will be where we start to gather data to assess if that is in fact the reality.”

The cost increases for employers offering the benefit are still murky, said Jones.

“Our recommendation is to start at the lower level and gain some experience with it, and then look to increase the coverage level over time, if that is indeed what the experience indicates makes sense.”

For now, individual usage will be capped between $1,500 and $6,000 per covered person, per year. It is expected those amounts will provide enough of the drug for the conditions Sun Life is covering, allowing plan sponsors to gain comfort with offering it as clinical evidence increases, he said.

Legal considerations

In terms of legal risks, employers should have a solid drug and alcohol policy in place before considering coverage of medical cannabis, said Fleming. Clear communication regarding impairment at work and health and safety obligations should also be dealt with prior.

As long as an employer is abiding by the current legal framework, coverage decisions will hinge on cost assessment, said Kiersten Amos, associate at McInnes Cooper in Charlottetown.

“It’s going to become more and more of a business decision on whether or not it’s something that can be covered,” she said. “If you’ve got business reasons to say no, then that’s perfectly acceptable, as it is with the decision to cover any other medication.”

However, declining to cover medical marijuana for other reasons could set up an employer for a human rights complaint citing discrimination, said Amos.

“The decision should be well-thought-out and reasoned versus being completely arbitrary,” she said.


Does it actually work?

More medical research needs to be completed before medical cannabis is prescribed more generally, according to Christine Than, senior consultant pharmacist and drug solution specialist at Aon in Montreal.

“There are a handful of indications that are being supported by more robust studies, and typically the payers who want to pay for medical marijuana would want to reimburse it only for those specific indications,” she said.

Doctors’ guidelines for prescribing medical cannabis indicate there is limited evidence to support the drug for many conditions, said Mike Allan, a family doctor and medical professor at the University of Alberta in Edmonton, who recently led a group of 10 physicians in the creation of the Simplified Guideline for Prescribing Medical Cannabinoids in Primary Care.

There is insufficient evidence that medical marijuana has a beneficial effect on pain, anxiety or social phobias, but many patients are looking to make the move from prescription opioids because it’s more natural, he said.

The shift, in part, is due to the fact that medical marijuana marketing has been “spectacular,” said Allan.

“It is not, a lot of the time, factual, but it is exceptional. It’s very powerful messaging — a natural product that has multiple positive effects with very little harm.”