Medical marijuana not covered by worker's compensation insurance in some states.

Cannabis Worker’s Compensation Insurance, Why It’s Needed

Cannabis business owners may debate the need for cannabis worker’s compensation insurance for cannabis employees, but in reality there should be no debate. Business owners should view cannabis workers compensation as a protection and not another expense. While in some states, smaller employers (generally those with 1-3 employees) may opt out of the mandatory coverage, many employers elect to opt into worker’s compensation coverage to protect their investments. Cannabis employers’ reasons for opting in include protection from being sued for causing injury, no fault coverage, and coverage for the actual business owner as well in case of injury while working.

The good news is cannabis employers and employees have an option to protect themselves if on the job accidents occur. The bad news is that there is ambiguity about medical marijuana and cannabis workers compensation coverage.  If a cannabis employee is injured on the job, it is logical to think that the employee may want to use medical marijuana to help manage pain while recovering from their injury. Due to the Schedule I status of marijuana on the federal level, and ambiguity among state laws regarding the issue, worker’s compensation payments may not cover the cost of medicinal use cannabis for injured employees. In a case out of Maine, an employee sued for reimbursements for money he spent out of pocket for medical marijuana. The court in Maine decided that employer’s do not have to pay for or reimburse employees for medical marijuana, and that doing so would be a crime under federal law.

But Twin Rivers Paper Co. and its insurer appealed the ruling, arguing that paying for pot use, even for medical purposes, could expose the companies to prosecution since marijuana still is illegal at the federal level… With medical marijuana legal in Washington, D.C. and 29 states, insurers across the country have been confronted with the same dilemma. Uneven state laws on reimbursement further complicate the issue… Twin Rivers attorney Anne-Marie Storey said paying for medical marijuana puts the company in violation of federal law. The company contends that Maine’s medical marijuana law does not explicitly require an insurer to cover the cost of medical marijuana.

While employers are not required to cover medical marijuana in some states, and the law is not clear in others, it is important to remember the benefits of cannabis worker’s compensation insurance. Without worker’s compensation for cannabis employees, employers can be exposed to a number of risks. In some states a business may receive a fine for each day worker’s compensation coverage is not maintained. Some states may prevent businesses from operating until the owner provides proof of coverage. Owners may be held personally liable for paying employees medical expenses and lost wages. Even if your cannabis business is small with a few employees, all it takes is one law suit for damages to derail the entire operation. Employers without proper coverage not only risk damaging financial losses for their business, but in some instances personal financial losses as well. Cannabis worker’s compensation for employees is only one of a number of tools employers can use to protect their business.  It is absolutely critical that business owners work with an insurance company and agent that can help them navigate the various risks and threats to a business and put a plan in place to protect the owner’s investment.


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