Legalization of Marijuana and Group Insurance | Expert View
The “bright, new, shiny object” these days is here and is here to stay. Medical marijuana/cannabis being offered by Group Insurance providers brings with it a host of concerns and unknowns. In my travels across Ontario this year so far it has been the most discussed topic.
Here is a high-level (no pun intended … ha!) view of some basic knowledge and points to ponder when thinking about marijuana and group insurance:
How has the legalization of marijuana impacted Canada’s group insurance market?
The legalization impact has yet to be fully realized as insurance companies are essentially still in the infancy of gathering enough data to establish a trend. I believe most are in a “wait and see” approach and I am sure expended many months reviewing the clinical evidence and other research to form the basis of their offering.
I am sure there will be adjustments and revisions to an insurance company’s offering as trend is established and the industry evolves.
The greatest impact, in my opinion, is to the employer where they will need sufficient guidance from their advisor to stick handle through this new offering. At the end of the day this is what the advisor is paid to do and employers are very much looking for direction. I always made a point of telling the plan administrator or the head of HR to consider me on the payroll in theory because I wanted them to know I was ready to step up and serve them when needed and be proactive on important matters such as the introduction of medical marijuana.
Besides, the HR departments have much more to plan with this new introduction as far as workplace safety, human rights and best practices. The impact far transcends the premiums paid and claims adjudicated.
For now, it is a holding pattern for insurers and a time for advisors to advise properly to ensure cost containment and understand needs.
It will be interesting to see this evolution 3 years out and evaluate the impact at that time.
To get a visual of the potential impact, it is worthy to note that Medical authorizations have gone from 14,000 to close to over 340,000 in only a few years according to Health Canada Stats.
Marijuana and Group Benefits: which insurance companies are at the forefront of making changes?
At first, group insurance carriers were slow to react as a whole until the summer of 2018 when many started to enter the market and allow coverage for medical marijuana as an option with traditional group insurance coverage. Companies like Manulife, Sun Life, Great West Life, Medavie Blue Cross, RBC Insurance, Green Shield and Equitable Life to name a few informed advisors and employers of their coverage details. Just recently this year SSQ Life Insurance announced their entry into offering marijuana with their group offering.
Each company, so far, appears to offer a benefit amount to employees from $1500-$6000/year with the norm being split between $1,500 and $2,500.
How does Marijuana Group Benefits coverage work?
Let us use Sun Life as an example:
Once an employer has added this optional coverage, employees wishing to make a claim must purchase their cannabis from a Health Canada licensed producer of cannabis for medical purposes, as specified under the ACMPR (Access to Cannabis for Medical Purposes Regulations)
Currently, they will reimburse medical cannabis expenses for these five specific conditions:
- Cancer: with severe or refractory pain; or with nausea or vomiting associated with cancer treatments
- Multiple Sclerosis: with neuropathic pain;
- Spasticity Rheumatoid Arthritis: with pain that failed to respond to standard therapy
- HIV/AIDS: with anorexia; or with neuropathic pain
- Individuals requiring palliative care
Why do group benefits cover just 5 marijuana conditions? Any future changes?
Sun Life adds:
“We’ve limited coverage to these five specific conditions because they are the conditions for which there is currently sufficient clinical evidence to support cannabis use. However, since there is ongoing clinical research on the use of cannabis for medical purposes, we’ll be conducting periodic reviews to determine if there is new evidence to support the use of medical cannabis for other conditions and symptoms…”
- “Plan members wishing to have their medical cannabis expenses reimbursed must complete and submit a Prior Approval Form for medical cannabis, which will then be reviewed by Sun Life before any claims are processed.
- Only plan members and their dependents who meet our clinical criteria for coverage will be approved and reimbursed.”
Medavie Blue Cross also took the similar position of Sun Life in its statement:
“Cannabis is a complex substance unique in the health benefits landscape,” stated the release. “It is not considered a prescription medication by Health Canada and does not meet typical requirements to be eligible for coverage under a prescription drug plan. Medavie Blue Cross will continue to monitor the latest clinical evidence and emerging trends to assess the new benefit on an ongoing basis.”
Not only do insurance companies offer it on Traditional plans but Health Spending Accounts (HSA) also make it available with its governing rules.
Will it result an overall reduction in claims with people using marijuana-related products in lieu of traditional drugs?
Now this is a frequently asked question and the answer remains to be known until we have at least 3 years of claims data to establish a trend.
However, in my opinion, I believe, in some instances, there may be a reduction in costs as employees discontinue expensive pain medication and move to much less expensive medical marijuana.
The industry has limited abuse thus far by defining certain criteria as per above which plays into the cautious approach.
There is no secret to plan costs. In general, its always going to be about premiums paid versus claims with the Target Loss Ratio factored. The usage will drive costs so plan management as mentioned above will be critical.
Are marijuana edibles treated in a similar manner and if not do you see this happening in the future?
The introduction of medical marijuana/cannabis also opens the door wide open to questions such as CBD oil and edibles from brownies, cookies and infused drinks to gummy bears etc. Again, the point to make is that group coverage is NOT covering recreational use but for those that are prescribed marijuana for medicinal purposes and they meet the guidelines set out from the insurance company, I believe the delivery system of the marijuana would vary by individual.
This, once again, will evolve and will need proper safeguards to ensure proper plan management.
In an ideal world what additional changes would you like to see in terms of marijuana and the Canadian group insurance market?
The market is wide open in Canada and claims are being submitted and this option is being added. With that comes great responsibility to educate and provide best practice advice.
What I would like to see is increased education to both plan administrators, owners, employees so they each know the impact, their respective roles and how to monitor usage and results.
Manulife Financial looks to lead in this initiative.
They launched the first medical marijuana program in Canada this fall in conjunction with Shoppers Drug Mart.
Manulife says the program will be available as an option for participating group and individual health insurance plans.
Under the partnership, Shoppers Drug Mart pharmacists will help Manulife customers navigate the different strains of medical marijuana and the different ways to take it.
They recognize that this is very much a complex arena and needs education and access to consultation from those qualified to do so.
The industry continues to evolve and embrace new ideas, technology advances and a variety of delivery systems to ensure the client experience and meet demands of this fast moving world.
Medical marijuana will take its place on the list with many other new products and services that will make up a typical benefits plan.
We hope you found these insights helpful. Our group insurance specialists will be happy to advise you on diverse group benefits topics or provide a group insurance quote for your organization.