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Is Medical Cannabis Coverage a Desired Change by Employers?
Feb 22nd, 2018
Well... the public has been waiting to see which of the large insurers was going to move forward first on adding medical cannabis to employee benefit programs. Sun Life announced February 15th that they have reassessed their position and have determined that medical cannabis can be added as optional coverage under an Extended Health Care (EHC) benefit at the request of the plan sponsor. The carrier will be implementing yearly maximums ranging from $1,500-$6,000, including a prior approval process.
Based on CRA's criteria, medical cannabis has been an allowable expense under Healthcare Spending Account but Sun Life's change to allow the expense under the employer sponsored employee benefit program could be a game changer in terms of benefit costs and employer policy.
So, what has been the hold up? Since medical cannabis has been legal for approximately 17 years, has the expected legalization in 2018 made this a hot topic or was it the "cannabis lobby" pushing the issue. At the end of the day, employers should remember that this is an option of coverage, meaning they would need to request the coverage before the carrier will add it.
Bob Dylan once sang that "the times they are a changing", we can all agree with that!
Now, what does an employer do? Things to consider are:
1) Medical Cannabis does not have a DIN (Drug Identification Number) from Health Canada.
2) Industry feedback is that there are still many unknowns regarding safety and effectiveness.
3) Cost - it could increase benefit plan usage and therefore cost but if it is used in replacement of Rheumatoid Arthritis or MS biological drugs, it could actually prove a cost savings.
In the end, Sun Life has eliminated the DIN requirement for a decision on coverage and made the expense an extended health claim. The carrier no longer has to make the decision... now it’s up to the employer to decide. Your employee benefit specialist can help you with this decision.
Kevin Routley is Vice-President at Selectpath Benefits & Financial - one of Canada's largest independent employee benefits consulting firms. His clients benefit from his straight forward approach to total compensation strategies where he challenges the traditional models of employee benefits. His innovative strategies have transformed the marketplace, breaking from tired, traditional solutions to create measurable long term savings for his clients. He has been an invited speaker in Canada and the United States. He sits on agent advisory councils with various insurance companies where his industry knowledge and foresight of the marketplace helps change the employee benefits landscape.