Pot Complicates Workers’ Comp Issues: Report

By Willis Jacobson
Sep 28, 2020

As the number of legal cannabis states continues to rise, so too have concerns from workers and employers over how fast-evolving regulations affect workplace injury claims.

Marijuana was identified as a “hot topic” in a 2020 Regulatory and Legislative Trends Report recently released by the National Council on Compensation Insurance (NCCI), which provides data and resources related to workers’ compensation. That report identifies several recent marijuana-related bills from around the country – enacted, failed, and still pending – and examined their impact on employment issues. 

Most legal challenges involving workers’ comp and pot focus on three related questions: Is medical marijuana an acceptable treatment for a work-related injury, will the cost of the medical marijuana be covered under a workers’ comp claim, and can testing positive for THC undermine a claim’s case?  

Like most everything else involving cannabis, the report found outcomes can vary wildly depending on the jurisdiction in question.

As with cannabis, each state sets its own workers’ compensation system. The individual regimes are typically updated if a state legalizes MED or REC. But cannabis largely remains in a legal gray area with regard to workers’ compensation, due to its federal illegality.

“People have to be careful,” said attorney Douglas Feldman, who sits on the board of The National Workers’ Compensation Defense Network (NWCDN).


Location, location, location

Although marijuana has been recognized as a possible treatment for a wide range of conditions, its role in workers compensation cases is still fairly new.

The report from the NCCI notes that eight states this year either considered or are considering legislation regarding reimbursement for MED as part of their workers’ compensation regulations.

Five of those eight states – Alabama, Indiana, Iowa, Kentucky and Oklahoma – considered legislation to block MED reimbursement. The other three – Kansas, New Jersey and New York – considered bills authorizing such reimbursements.

Iowa was the lone state this year to enact legislation on the matter. That state neither prohibits nor requires MED reimbursement in workers’ compensation cases.

Other states, including Florida and North Dakota, already prohibit workers’ compensation coverage to include MED.

Meanwhile, multiple states have relied on court rulings to clarify their positions, according to a separate report published by the Injured Workers Pharmacy, which provides medications to workers’ compensation patients.

States including Connecticut, Maine, Minnesota, New Jersey, New Mexico and New Hampshire have all leaned on court rulings that found that MED was reasonable and necessary for the treatment of work-related injuries.

That’s a positive trend for workers who may want to treat their injuries with cannabis, said Carmen Ramirez, a director at the Oakland, Calif.-based Pacific Workers’ Compensation Law Center.

“I wouldn’t be surprised if more states are open to it,” she said of the idea of treating MED like other pharmaceutical medications for workers’ compensation cases. 

But, she cautioned, it could also be a Catch-22, even in a canna-friendly jurisdiction like California.

Because of marijuana’s federal classification as a Schedule I drug, employers can still treat it as an illegal substance. California, despite pioneering the legalization of MED, does not cover MED in its workers’ compensation system, leaving the Golden State “lagging far behind,” Ramirez said.

But even in states that do cover workers’ compensation claims for MED, federal illegality still hangs over the situation.

“It’s a situation where you’ll win because the workers comp will cover the medical marijuana, however you’ll lose your job,” Ramirez said, noting that employers can fire workers for using illicit drugs. “It’s annoying because it’s still very, very new. They’re still working at it.”

‘Laws are changing’

Like Ramirez, Feldman, the NWCDN board member, has also observed that more states are willing to at least consider including MED in workers’ compensation programs.

Particularly in states where MED is legal, he said, “insurance carriers are more and more being required to pay for it when prescribed by a physician as necessary as a result of work-related injury.”

“The laws are changing, and as the states make medical marijuana legal, then a push comes afoot to amend the workers’ comp laws,” said Feldman, who practices with the Milwaukee, Wisc.-based Lindner & Marsack firm, which specializes in employment law.

While the news may be encouraging for cannabis advocates, Feldman noted that there likely won’t be across-the-board clarity until the federal government and each state’s respective legislators get on the same page.

For instance, in some states if a person gets hurt at work and tests positive for THC in a subsequent drug test – even though that test can’t specify the exact day/time that the person may have been impaired – the mere presence of the substance can cause an entire claim to be tossed.

“So it’s still not a good idea to go to work high,” Feldman said.

He acknowledged, though, that attitudes appear to be evolving. 

Several companies, Feldman said, have stopped testing for THC in pre-employment screenings as a result of the tests wiping out so many of their otherwise-qualified candidates.

“There’s definitely been a change in how employers are looking at marijuana and how they handle it in the workplace,” he said. “Many employers have policies on how to handle that, but those policies depend upon the state laws and whether it’s legal recreationally or medicinally in their state.”

That was supported by the IWP report, which concluded:

“It seems likely that medical marijuana will find its place in workers’ compensation in the coming years, but there is a long, uncertain road ahead where much of its success, or failure, will be determined by legal precedent, state by state.”

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