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Employer Must Reimburse For Medical Marijuana

New Jersey
January 16, 2020
January 16, 2020
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A major source of contention, amongst the workers’ compensation division, is whether the insurance carrier is able to comply with providing medical treatment pursuant to the New Jersey Medical Marijuana Act (MMA).  The concern is, doing so is a violation of the federal Controlled Substances Act (CSA), which makes it a crime to manufacture, possess, or distribute marijuana.  Because of this, the Division Judges are ordering carriers not to actually provide and/or pay for the medical marijuana but rather, the carriers are being ordered to reimburse the petitioner for out of pocket costs associated with purchasing medical marijuana.  On January 13, 2020, the Appellate Court affirmed that practice.  Hager v. M&K Construction, A-0102-18T3.

In Hager v. M&K, the court found that because the order does not require M&K to possess, manufacture, or distribute marijuana, but only to reimburse Hager for his purchase of medical marijuana, there is no conflict between the CSA and NJ MMA.

In its reasoning, the court also distinguishes between workers’ compensation carriers and private health insurers.  The court points out that the language in the NJ MMA may exclude private health insurers from reimbursing a person for the costs associated with the medical use of cannabis.  However, the court notes that a workers’ compensation carrier is not the same as a health insurer and as such, should not be treated the same.  The court explains that the legislature has made it clear that health insurance is different from workers’ compensation coverage.      

Interestingly, the court also points out that of the thirty three states that have legalized medical marijuana, only New Mexico and Maine have considered whether their medical marijuana legislation is preempted by the CSA.  See Lewis v. Am. Gen. Media, 355 P.3d 850, 858 (N.M. Ct. App. 2015) (finding that New Mexico’s medical marijuana act was not preempted by the CSA); and See Bourgoin v. Twin Rivers Paper Co., 187 A.3d 10, 12 (Me. 2018) (determining that Maine’s medical marijuana act was preempted by the CSA).

Hager v. M&K has been approved for publication and as such, is now binding.  We will be monitoring whether this decision will be appealed to the New Jersey Supreme Court.