Medical cannabis has been legal in Canada since 2001, and is
currently used by more than 230,000 Canadians, according to Health
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
“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.
The company had previously offered coverage for the drug via
health-care spending accounts (HSAs), which weren’t as widely available,
Recently, more employers have inquired about offering medical
marijuana in an evidence-based manner, with limits on reimbursement
“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
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.”
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
“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.
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,
“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.”