Skip to content

Client Update: Where there’s smoke, there may be coverage: an insurer’s obligation to indemnify for medical cannabis

Jon O’Kane and Jamie Watson

Legal cannabis will have numerous implications for insurers. The federal Cannabis Act (discussed here), the provincial acts (discussed here) and the regulations (discussed here) are all going to add layers of nuance to the governance of cannabis in Canada.

Auto insurers will be affected by the uncertainty created by impaired driving, as we discuss in our article: Driving high – the future is hazy for Canadian automobile insurers once cannabis goes legal. However, other insurers, who deal with health and benefits, are already grappling with medical cannabis and coverage – as is discussed in the Nova Scotia Human Rights Tribunal decision of Skinner v Board of Trustees of the Canadian Elevator Industry Welfare Trust Fund, 2017 CanLII 3240 (NS HRC) (“Skinner“).

Skinner: what is it about?

Gordon “Wayne” Skinner worked for ThyssenKrupp Elevator Canada when he was injured on the job in a motor vehicle accident in 2010. After two other medications became ineffective in managing his symptoms, Mr. Skinner obtained a medical cannabis license in 2012. Once he exhausted his employer’s insurer’s coverage limit of $25,000, Mr. Skinner turned to the Canadian Elevator Industry Welfare Trust Plan (the “Trust”) to cover his medicinal cannabis. The Trust provides health and related benefits for employees and former employees working in the unionized sector of the Canadian elevator industry.

The Trust denied the request for coverage, taking the position that (a) medical cannabis had not been approved by Health Canada and, consequently, lacked a drug identification number (“DIN”); and, (b) Skinner’s injuries were the result of an otherwise compensable workplace accident and therefore ought to be covered by the provincial Medicare plan.

Mr. Skinner complained to the Nova Scotia Human Rights Commission (the “Commission”). Earlier this year, a Board of Inquiry (“BOI”) issued its decision. The BOI concluded that denial of coverage for medical cannabis amounted to unjustifiable discrimination and ordered the Trust to reimburse certain expenses.

Skinner provides guidance on how to draft language limiting coverage for medical cannabis within an insurance or group benefits policy. However, the impact of this decision may change, as an appeal is presently slated for October 2017 before the Nova Scotia Court of Appeal.

Skinner’s implications for insurers and coverage providers (at present)

1. Medical cannabis should be explicitly excluded from coverage, if that is the intent.

In Skinner, the BOI concluded it was not necessary that cannabis be assigned a DIN as a condition for coverage. Since the Trust’s plan in Skinner included coverage for both “drugs” and “medicines”, the BOI concluded it was prima facie discriminatory to deny coverage for medical cannabis as opposed to other medicines (thereby imposing a burden on the Trust to prove that the denial was justifiable).

2. Coverage for medical cannabis cannot be denied arbitrarily. Insurers or benefit providers seeking to deny coverage must be able to justify that decision with evidence.

In Skinner, there was little evidence presented that showed coverage of medicinal cannabis would have rendered the Trust financially unviable. The Trust argued it would cost $60 per day to provide the medicinal cannabis to Mr. Skinner when justifying the alleged discrimination and denial of coverage. The BOI concluded that absent any context or comparators, the $60 daily expense to the Trust was not prohibitive to providing coverage to Mr. Skinner. Furthermore, the BOI decided that exclusion of medical cannabis was contrary to the purpose of the Trust’s plan, which was to maximize the benefits for members without compromising the financial viability of the trust funds supporting the plan.

Skinner‘s future implications 

Two items will have direct impacts on Skinner‘s continuing utility as a precedent in this area:

1. Legalized recreational cannabis, which is fast approaching, will require insurers and benefit providers to think critically about the relationship and overlap between recreational and medicinal cannabis when drafting coverage provisions; and,

2. The results of the October, 2017 appeal before the Nova Scotia Court of Appeal, which we will be following closely.

SHARE

Archive

Search Archive


Generic filters

 
 

SVILA E-Discovery

March 5, 2013

Stewart McKelvey’s Vision Improving Legal Analysis (SVILA*) is an e-discovery project and litigation management tool. For more information on our e-discovery services, download the SVILA e-discovery document.

Read More

Doing Business in Atlantic Canada (Spring 2013)(Canadian Lawyer magazine supplement)

March 5, 2013

IN THIS ISSUE: A New Brunswick business lawyer’s perspective by Peter Klohn Why Canada’s immigration rules matter to your business by Andrea Baldwin Financing Energy Projects during the Project Lifecycle by Lydia Bugden, Colm St. Roch Seviour and Tauna Staniland Download…

Read More

Client Update: Valentine’s Day @ the Workplace

February 14, 2013

Yellow diamonds in the light And we’re standing side by side As your shadow crosses mine What it takes to come alive It’s the way I’m feeling I just can’t deny But I’ve gotta let…

Read More

Client Update: Nova Scotia Contaminated Site – Ministerial Protocols

January 11, 2013

INTRODUCTION On December 6, 2012, The Nova Scotia Department of Environment (NSE) released Draft Ministerial Protocols (the “Draft Protocols”) related to contaminated sites. The release of the Draft Protocols has been eagerly anticipated. The adoption…

Read More

Client Update: Changes to the Rules of the Supreme Court

January 3, 2013

Recent changes to the Rules of the Supreme Court, 1986, SNL 1986, c 42, Sch D On December 14, 2012, several changes were made to the Rules of the Supreme Court. These changes include: who may act…

Read More

Doing Business in Atlantic Canada (Winter 2012) (Canadian Lawyer magazine supplement)

January 1, 2013

IN THIS ISSUE: Putting Trust in your Estate Planning, by Paul Coxworthy and Michael McGonnell The Risks, for Insurers in Entering Administration Services Only (ASO) Contracts, by Tyana Caplan Angels in Atlantic Canada, by Allison McCarthy, Gavin Stuttard and Adam Bata…

Read More

Client Update – Changes to the Human Rights Legislation in Newfoundland and Labrador

July 13, 2010

Bill 31, An Act Respecting Human Rights, came into force on June 24, 2010 replacing the Human Rights Code (the “Code”). For more information, please download a copy of this client update.

Read More

Atlantic Business Counsel – December 2009

December 18, 2009

IN THIS ISSUE Expanded Fines and Penalties for Environmental Offences: The New Federal Environmental Enforcement Act Spam about to be Canned? Preparing a Business for Sale Business Disputes Corner – Place of Arbitration and Selected…

Read More

Client Update – General Damage Cap Upheld By the Nova Scotia Court of Appeal

December 15, 2009

The Nova Scotia Court of Appeal has unanimously upheld the province’s legislative limits on general damage recovery for “minor injuries”. Today’s decision, authored by Chief Justice Michael MacDonald, completely affirms the January 2009 decision of…

Read More

Client Update – New Planning Opportunities For ULCs

December 4, 2009

The Canada Revenue Agency (“CRA”) announced helpful administrative positions concerning the new rules under the Fifth Protocol to the Canada-US Income Tax Convention, 1980 which will come into effect on January 1, 2010. The CRA…

Read More

Search Archive


Generic filters

Scroll To Top