Courts Rule In Favor Of Covering Pot For Workers' Comp

East Aurora, NY (WorkersCompensation.com) – Two appeals courts have upheld rulings requiring insurance companies to cover the cost of medical marijuana in workers’ compensation claims, as a recent study seems to indicate that recreational marijuana laws reduce workers’ compensation benefit costs.

On Feb. 25, the Supreme Court of New York, Appellate Division, Third Department, ruled that a workers’ compensation insurer would need to reimburse a former police officer for his medical marijuana.

Similarly, a man in Concord, N.H. prescribed medical marijuana to help with an on-the-job back injury won a second legal victory from the New Hampshire Supreme Court on March 2.

Andrew Panaggio was injured on the job in 1991 and received a lump sum settlement in 1997 after being judged to be permanently impaired. In 2016, Panaggio was approved by the state Department of Health and Human Services to participate in a therapeutic cannabis program to treat his pain. He submitted a receipt for the therapy to the workers’ compensation insurer, CNA Financial Corp.

CNA denied payment on the grounds that “medical marijuana is not reasonable/necessary or causally related” to his injury.

Although the New Hampshire Compensation Appeals Board found Panaggio’s use of medical marijuana “reasonable and medically necessary,” the board upheld CNA’s refusal to reimburse him on the grounds that it’s “not legal under state or federal law.”

The case went to the New Hampshire Supreme Court which overturned the appellate court’s decision and sent it back to the labor board asking it to support its finding that ordering the insurer to pay for the marijuana would open it up to prosecution.

This time the board said that making the insurer pay for the marijuana would be “aiding and abetting Mr. Panaggio’s illicit purchase and possession” of the drug.

The Supreme Court on Tuesday ruled in favor of Panaggio saying that they were not persuaded by the board’s argument, noting that aiding and abetting “requires voluntary participation” and compliance with a court or board order did not “constitute voluntary participation.

At least five states Connecticut, Maine, Minnesota, New Jersey and New Mexico – have found medical marijuana treatment is reimbursable under their workers’ compensation laws, according to the National Council on Compensation Insurance.

Three others - Florida, North Dakota, and Michigan - have passed laws exempting medical marijuana treatment from workers’ compensation reimbursement.

But a new study may persuade some states to rethink their position on marijuana.

Rahi Abouk, professor of health economics at William Paterson University and director of the school’s Cannabis Research Institute has found legalized marijuana may impact workers’ compensation pay-outs.

"Our results suggest that after states legalize cannabis for recreational purposes, the rate of workers' compensation benefits received declined, by about 20 percent," Abouk said.

With the estimated cash and medical payments to workers totaling $62.9 billion, that could amount to a savings of as much as $12.58 billion a year.

The study “Does Marijuana Legalization Affect Work Capacity? Evidence from Workers' Compensation Benefit" published in the National Bureau of Economic Research, looked at adult workers between 42 and 60 in states with recreational marijuana laws and workers’ compensation claims over a period of nine years.

What the research found was that in states like Colorado, employees in a higher age range often substitute marijuana for other drugs, like opioids, for pain management.

Unlike opioids, his research found, marijuana kept workers participating in the workforce.

"Higher work capacity means fewer mistakes at work, fewer injuries, which, we show that non-fatal injury rates decline by about 6 percent," he said.

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