Employers Deserve Cannabis Clarification from the Feds

Employers Deserve Cannabis Clarification from the Feds

The New Jersey Supreme Court just issued a decision that requires insurers and employers to reimburse injured workers for the use of medical marijuana. In the case, lawyers for an employer argued that reimbursing for medical marijuana would in effect be “aiding and abetting and conspiracy liability under federal law.” As Nancy Grover reported on this site yesterday, “the seven justices were “unpersuaded” by [those] arguments, that reimbursing for medical marijuana would be tantamount to aiding and abetting and conspiracy liability under federal law, which deems marijuana to be illegal.”

Well, the justices may have been “unpersuaded,” but the fact remains that paying for marijuana is, under federal law, illegal. No fewer than five states have seen legislative and or judicial action that now puts insurance companies and employers in direct conflict with that reality. Marijuana is, after all, still classified by the federal government as a Schedule I drug. Schedule I drugs are defined as drugs with no currently accepted medical use and a high potential for abuse. It is in the same group as heroin, LSD, and Ecstasy. This literally puts payers in workers’ comp between a rock and a hard place.

Admittedly, the federal government has turned a blind eye to the rapid proliferation of both medical and recreational marijuana use. It can be used medicinally in 33 states, and recreationally in 15 states. It remains fully illegal in fewer than 10 states. The feds have not yet indicated any appetite to dampen the trend to legalization.

Still, the fact remains that ordering payment for a Schedule I drug creates a huge potential risk for insurance companies and employers. The classification of marijuana is potentially for them a ticking time bomb. Should political winds change or a shift in priorities occur at the federal level, they could be exposed for their part in procuring what the federal government still legally defines as a completely prohibited substance. That move may be unlikely given the trends in public opinion and societal demands, but the legal liabilities still remain.

The precedent was set long ago that federal law supersedes state and local regulations. The threat may not be widely respected, but for these companies ordered to participate, it is quite real indeed.

It is time for the federal government to issue some guidance on the subject. That action probably should be a reclassification of marijuana. Absent that, there needs to be an exemption in place that offers some protection to payers in this position. It is a problem that is only going to grow from here.

Today it is an issue in five states. If the trend to order payment under workers’ comp follows the same trajectory as that seen for the acceptance of recreational and medical use, it will be far more than that in the very near future.


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Robert Wilson is President & CEO of WorkersCompensation.com, and “From Bob’s Cluttered Desk” comes his (often incoherent) thoughts, ramblings, observations and rants – often on workers’ comp or employment issues, but occasionally not.

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