The conundrum that is marijuana continues to challenge employers, as seen recently when a Nova Scotia human rights tribunal ruled an employee’s denial of medical marijuana coverage amounted to discrimination.
The decision involved Gordon “Wayne” Skinner, an elevator mechanic employed by ThyssenKrupp Elevator Canada. In 2010, he was involved in an accident at work, leading to physical and mental disabilities in the form of chronic pain and anxiety and depressive disorders.
Unable to work, he qualified for permanent impairment and extended earnings replacement benefits. And since various pain medications and anti-depressants proved ineffective, he began using medical marijuana using the appropriate prescription and licence.
Initially, the marijuana was covered by his employer’s vehicle insurer but after a couple of years, Skinner had reached the maximum limit of $25,000. So, in May 2014, he asked the board of trustees of the Canadian Elevator Welfare Trust Fund — who are responsible for management of the Canadian Elevator Industry Welfare Trust Plan, which provides health and related benefits — for coverage.
But the trustees denied Skinner’s request — three times — because medical marijuana has not been approved by Health Canada under the Food and Drugs Act, so it does not have a drug identification number (DIN), and Skinner’s injuries were the result of a compensable workplace accident, so it said any medical expenses should be covered by the provincial medicare plan.
So, in October 2014, Skinner filed a formal complaint with the Nova Scotia Human Rights Commission alleging discrimination in the provision of services on account of physical and mental disability. And, ultimately, the board agreed.
Labour arbitration considerations
In his decision, board of inquiry chair Benjamin Perryman went over several reasons why a labour arbitrator “could reasonably have found the trustees’ decision to be in non-compliance with the Welfare Plan and collective agreement.”
For one, the plan stated prescription drug benefits were those “obtained only by prescription” (such as medical marijuana), and it did not expressly limit coverage to drugs possessing a DIN or limit the definition of “drug” to only Health Canada-approved drugs.
The trustees also claimed Skinner’s request was not covered because he had not established the marijuana was medically necessary. But the plan did not define “medically necessary” and since the marijuana was prescribed for pain management, “it seems there is a prima facie support for its medical necessity, owing to the fact that conventional prescription pain management drugs are normally eligible for coverage,” said Perryman.
The Welfare Plan also granted the trustees broad authority to construe and alter the plan as needed, which could be a case-by-case change or a permanent change, he said.
So they could interpret its terms “in a way that would have made medical marijuana an eligible drug, to approve coverage for medical marijuana on a case-by-case basis even though it was not ordinarily covered, or to change the Welfare Plan to make medical marijuana an eligible drug. This authority is constrained only by the limitation that any such changes must be economically sustainable.”
However, the human rights board did not have the jurisdiction to decide if the trustees were in compliance with the plan and collective agreement. But it did have jurisdiction to review the trustees’ decision to make a case-by-case decision or modify the plan, said Perryman.
“The question before the board is whether the exclusion of coverage for medical marijuana under the Welfare Plan and/or the trustees’ refusal to exercise their discretion to alter the Welfare Plan amounted to a violation of the (Human Rights) Act.”
In looking at whether the plan’s exclusion of coverage, and the trustees’ refusal to extend coverage, amounted to a violation of the human rights act, the first step was to determine the purpose of the plan, and the second step was to compare the benefits allocated to employees for the same purpose, said Perryman.
The legal purpose of the plan was to provide benefits to beneficiaries, in a way that was efficient, economical and sustainable. But the trustees failed to establish that coverage would result in undue hardship.
“There was no evidence presented to suggest that premiums would have to be increased or that the financial viability of the plan would be threatened,” he said.
The concept of “medical necessity” also has relevance to the human rights analysis, he said, finding medical marijuana was medically necessary for Skinner, citing medical experts and linkages between the usage and improved functionality, while the under-management of his chronic pain had a severely negative impact on him and his family.
And while the trustees claimed Skinner was not treated any differently than any other beneficiary, the plan’s exclusion of medical marijuana had the substantive effect of treating the employee differently.
“Whereas some beneficiaries receive coverage for their medically necessary prescription drugs by special request, (Skinner’s) special request for a medically necessary prescription drug is excluded,” he said. “The exclusion of coverage resulted in a burden or disadvantage for (Skinner).”
The test for discrimination requires a complainant’s disability be a factor in, or connected to, a policy or decision, said Perryman.
“In my view, this arguably occurred at the time the Welfare Plan was created or at the time the complainant applied for coverage of medical marijuana, but it definitely occurred at the time he appealed the denial of coverage and requested accommodation,” he said. “This discrimination was non-direct and unintentional.”
In the end, the trustees were told they must begin providing coverage of medical marijuana for Skinner and this coverage will continue until “the parties are able to reach an agreement regarding remedy that has been finalized by the board… or an appropriate court has ordered otherwise.”
Implications for employers
The decision does not mean all private or public employee benefits plans are required to cover medical marijuana or any other drug, said Perryman.
“Not all distinctions will be discriminatory. The foregoing analysis was dependent on the circumstances of this case,” he said.
“While the board accepts that benefits plans cannot cover the sun, moon and the stars, consideration of whether non-coverage of a particular drug, for a particular person, amounts to discrimination does not mean that a benefits plan will immediately be required to cover all drugs prescribed to a person with a disability. Such reasoning is simplistic and ignores the complexity of human rights jurisprudence.”
While Perryman looked at other issues, his purpose was to look at this particular complaint, this particular plan and this particular human rights act — not take a global view, said Kimberly Franklin, senior legal counsel at the Nova Scotia Human Rights Commission in Halifax.
“A lot of the cases that have been argued have taken that approach, rather than narrow it down to the actual individual or persons who are complainants… that’s where the argument starts to fail because the purpose of the plan was not for the sole benefit of this person, but it was to supplement care.”
Down the road, other tribunals or hearing situations are going to have to look at the basic facts specific to each case, such as the basic disability presented, the person’s needs and the plan involved, she said.
“I don’t think this would be a cry for all insurance plans to go and start revamping their plans because this was the first look at a case like this from a very narrow perspective, instead of the broader perspective of attacking the plan without the person.”
The takeaway from this decision is employers or benefit plan administrators have to look at each case on a case-by-case basis, said Courtney Barbour, a lawyer at Barteaux Durnford in Halifax.
“Under the language of the plan, (the trustees) had the ultimate discretionary authority to construe how the plan was applied or to change the plan as needed to meet its purpose,” she said. “There’s always a balance between maximizing the benefits it offers to beneficiaries, and they have to balance that with allowing for economic sustainability of the plan.”
The trustees failed to establish there was a non-discriminatory justification for their decision to deny coverage, she said.
“They argued that the coverage would end in undue hardship for the plan, that it was going to have a substantial financial impact to premiums, but they didn’t provide the evidence to show that.”
When somebody seeks accommodation, employers and plan administrators have to consider their duty is to accommodate and whatever decision they make isn’t going to be discriminatory, said Barbour.
“They can’t simply throw their hands up and say, ‘We can’t do that.’ If they’re making a decision, they need clear evidence to show that they’re making this decision and justifying something that may have been prima facie discriminatory.”
It’s typical in many benefit plans to see caps on coverage, or to only pay for the generic drug instead of the brand name drug, “but they do have the discretion to hear if an employee comes on a case-by-case basis seeking coverage for something that’s not explicitly covered in the plan,” she said.
“They always have to turn their mind to ‘What’s the purpose of the plan and in making our decision to deny coverage for something, is this going to have an adverse effect on the individual? Is this going to deprive that employee of something that’s medically necessary, prescribed by physicians?’”
Generally, plan sponsors have not been overrun with requests for coverage when it comes to medical marijuana. But if someone does come forward, employers have been relying on exclusions or limitations around the DIN, said Karen Millard, a senior consultant at Willis Towers Watson in Toronto.
“When they’ve explained that to the plan member, the plan member has said, ‘Well, fine.’ There’s been no further concern or pushback from the plan member on that interpretation.”
That being said, plan sponsors have expressed concern about what should happen if a plan member is in dire circumstances, requesting coverage, she said. And one of the big impacts of the Nova Scotia case is to show there can be times where a plan sponsor should consider the situation on a case-by-case basis.
Going forward, it’s about looking at what the prior authorization process should look like around medical marijuana, and in what circumstances it should be covered, said Millard.
“That’s why the Skinner case is very important because it doesn’t just look at the terms of the plan, it says even if the terms of a plan clearly exclude it, we look at the degree to which plan sponsors have discretion over determining the various aspects... and the extent to which the administrator would have discretion in allowing certain exceptions.”
While the Canadian Life and Health Insurance Association does not comment on individual cases, it is generally up to the employer to decide if it wants to cover medical marijuana under its group benefit plan, said Wendy Hope, vice-president of external relations at the association.
“Medical marijuana is not typically covered under group benefit plans for a number of reasons, including that it is not yet approved by Health Canada for safety, efficacy and quality (no drug identifier number has been issued for medical marijuana generally),” she said, adding medical marijuana can already be reimbursed through a health-care spending account.
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