The N.S. Court of Appeal has reached two decisions ending one employee’s quest for coverage of the costs of his medical marijuana – at least for now. On April 12, 2018, the Appeal Court disagreed with the Human Rights Board of Inquiry’s decision that denial of coverage for the medical marijuana under his health benefits plan was discriminatory in Canadian Elevator Industry Welfare Trust Fund v. Skinner. This follows the Court’s March 9, 2018 decision that upheld the Workers’ Compensation Tribunals’ decision to deny the employee compensation for medical aid in the form of medical marijuana under Workers Compensation Act in N.S. Workers’ Compensation Act in Skinner v. Nova Scotia (Workers’ Compensation Appeals Tribunal).

The Appeal Courts’ decisions settle two key medical cannabis coverage questions. Whether the employee will apply to the Supreme Court of Canada for permission to appeal both decisions to that Court  remains unanswered. And health benefits providers still need to answer the question: what’s your medical cannabis coverage strategy?

Key Considerations for a Medical Cannabis Coverage Strategy

For health benefits providers, developing an overall medical cannabis strategy and ensuring plan provisions accord with that strategy is critical to their ability to prudently and fairly process claims, including justifying benefits coverage denials. The strategic question to ask: exclude coverage of medical cannabis altogether – or cover it, but focus on cost control?  

Exclude Medical Cannabis Coverage. This strategy entails benefits providers clearly and justifiably expressing any medical cannabis coverage exclusions, and doing so in relation to the plan coverage language as a whole. This includes narrowly defining one or all of “drug”, “prescription drug”, “medicine”, “prescription” and “medically necessary”.

Control Medical Cannabis Costs. This strategy entails covering medical cannabis, but controlling the costs. Examples include limiting coverage by:

• Coverage caps (such as annual or dosage caps).
• Acquisition methods (such as licensed producers or home-grown).
• Covered strains or per gram cost caps.
• Coverage to the equivalent amount of synthetic substitutes.
• The cost to produce home-grown medical cannabis and of related accessories.
• Allowing for the possibility of future improvement.
• Prior use (though this could raise the risk of a human right discrimination claim).

N.S. Court of Appeal Puts a Lid on Medical Pot Coverage

Here’s how the N.S Court of Appeal put the lid on medical pot coverage under a health benefits plan and the N.S. Workers’ Compensation Act.

No Coverage Under Health Benefits Plan. The Appeal Court’s April 12, 2018 decision in Canadian Elevator Industry Welfare Trust Fund v. Skinner answers the question raised by the N.S. Human Rights Board of Inquiry decision: can exclusion of medical cannabis coverage, even if the plan language excludes it, still be discriminatory on the basis of disability under human rights law? The insured’s doctor prescribed him medical cannabis that, admittedly, worked when conventional drugs didn’t. The insured applied for coverage of the medical cannabis under his health benefits plan. The benefits provider denied coverage because the plan wording excluded drugs Health Canada hasn’t approved (which includes medical cannabis). The insured lodged a human rights complaint alleging the denial discriminated against him based on physical disability and the N.S. Human Rights Board of Inquiry agreed. The health and welfare trust appealed to the N.S. Court of Appeal. The high stakes of this appeal were evident by the facts a medical cannabis producer said it would fund the insured’s defence of the appeal, and multiple other groups intervened in the appeal. The Court disagreed with the Tribunal and concluded it is not discriminatory for a private drug plan to limit reimbursement for the cost of drugs to only those approved by Health Canada. Acknowledging that “[b]enefit plans are necessarily limited in many ways”, the Court concluded:

• Plan Wording. The Plan wording defined drugs covered under the plan as prescription drugs approved by Health Canada – not “prescription drugs personally beneficial to each claimant”. No Plan member, not just the insured, was compensated for drugs Health Canada hadn’t approved.
   
• Fiduciary Duty. The Trustees had a fiduciary duty to determine what benefits would be (thus would not be) available to members. Exercising the duty by limiting prescription drug benefits to those that are Health Canada-approved inevitably affects some more than others, but this alone doesn’t make the decision discriminatory. And none of mere knowledge of a disability, the discretion to change a requirement to meet a particular insured’s request, or the adverse effect of a decision, automatically translate a denial into discrimination.
   
• No Disability Connection. The mere existence of disability can’t alone mean the denial is based on disability because all applicants are disabled. The disadvantage the denial caused the insured wasn’t “based on” his disability (a characteristic the Act protects). Refusing an insured coverage based on criteria set by the Plan doesn’t differentiate the insured from other members because no members are eligible for the drugs sought.

No Medical Aid Under Workers’ Compensation Act. The Appeal Court’s March 9, 2018 decision in N.S. Workers’ Compensation Act in Skinner v. Nova Scotia (Workers’ Compensation Appeals Tribunal) answered the question raised by the N.S. Workers’ Compensation Appeals Tribunal (WCAT): is the N.S. Workers’ Compensation Board’s (WCB) Policy restricting medical aid to health care that (among other things) is “consistent with standards of health care practices in Canada” valid? The employee sustained his original injury in the course of employment so he also applied for medical aid in the form of the prescribed medical marijuana under the N.S. Workers’ Compensation Act. The case manager and then  the case worker denied the claim for the same reason: per the WCB Policy, medical aid is available only for healthcare that is “consistent with standards of health care practices in Canada”, and prescription use of medical marijuana was not consistent with Canadian health care standards. The WCAT agreed and dismissed the worker’s appeal. The worker appealed to the N.S. Court of Appeal, which concluded the WCB Policy is  valid – and so is the denial of coverage.

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Please contact your McInnes Cooper lawyer or any member of the Pensions & Benefits Team @ McInnes Cooper to discuss this topic or any other legal issue.

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