A recent decision out of Nova Scotia has ordered an employee insurance plan to cover medical marijuana expenses.
Gordon “Wayne” Skinner was an elevator mechanic who developed both physical and mental disabilities as a result of an on-the-job motor vehicle accident in August, 2010. The accident left Wayne unable to work and qualified him for permanent impairment and extended earnings replacement benefits.
For the two years following the accident Wayne attempted to treat his disabilities exclusively through narcotic and non-narcotic pain medication and anti-depressants without success.
In 2012, Wayne obtained a prescription and license to consume medical cannabis. Wayne found the medical cannabis to be a more effective treatment than previous drugs.
Wayne received his health and related benefits through the Canadian Elevator Industry Welfare Trust Plan (the “Plan”). The Plan provides benefits to employees and former employees working in the unionized sector of the Canadian elevator industry. The Plan is administered by a Board of Trustees (the “Trustees”) who are responsible for the management of the Plan.
The cost of Wayne’s medical cannabis was initially covered by his employer’s motor vehicle insurer. However, by May, 2014, Wayne had reached the maximum limit of $25,000 under his employer’s policy and turned to the Plan for coverage going forward. On three separate occasions in May and June of 2014, Wayne requested consideration for coverage from the Trustees for his medical cannabis expenses. The Trustees denied his request for coverage each time.
The reasons for the denial were twofold. First, the Trustees stated that medical cannabis is not approved by Health Canada, does not have a drug identification number and was not an approved drug under the terms of the Plan. Second, the Trustees determined that since Wayne’s disabilities were the result of a compensable workplace accident, any related medical expenses ought to be covered by a provincial medicare plan, and because they were not, his medical cannabis expenses were therefore excluded under the Plan.
Following the three denials, Wayne filed a formal complaint under the Human Rights Act (the “Act”) in October, 2014. The Nova Scotia Human Rights Commission made the decision in February, 2016 to refer the matter to a board of inquiry (the “Board”) under s.32A(1) of the Act.
On October 3rd and 4th, 2016, a hearing was held to determine whether or not the Trustees contravened the Act in denying Wayne’s request for coverage of his medical cannabis expenses.
The Issue to Be Determined
Put succinctly, the Board was required to determine whether the Plan’s exclusion of coverage for medical cannabis coupled with the Trustees’ refusal to exercise their discretion to extend coverage to medical cannabis amounted to violation of the Act.
In order to properly understand how the end result was reached in this case, it is important to understand the legal principles the Board was obligated to apply.
The Test for Discrimination
The Board is first required to determine if the complainant, in this case Wayne, is able to establish a prima facie case for discrimination. If the complainant can establish a prima facie case, the burden then shifts to the respondent, in this case the Trustees, who must establish that either a statutory exemption under human rights legislation applies or that there is a non-discriminatory justification for its policy and evidence that it took reasonable steps to accommodate the complainant up to the point of undue hardship.
Analyzing Wayne’s Prima Facie Case
After a lengthy review of jurisprudence from both Human Rights Tribunals and Appellate Courts, the Board settled on a two-part process to be used in determining whether Wayne had established a prima facie case. First, the Board would determine the purpose of the Plan in all of the circumstances. Second, the Board would compare how benefits were allocated to beneficiaries for the same purpose under the Plan.
The Purpose of the Plan
The Board ruled that based on the evidence brought to the Board, the purpose of the Plan was to provide benefits to beneficiaries. The Board also noted that Trustees are able to extend and improve benefits under the Plan and their authority to do so is only constrained by the limitation that such changes be economically sustainable.
Comparison of Benefits
The Trustees argued that Wayne was not treated any differently than any other beneficiary under the Plan due to the fact that medical cannabis was not covered for any beneficiary. The Board did not disagree with this fact, but analyzed the substantive treatment of beneficiaries under the Plan. Based on this analysis, the Board held the exclusion of medical cannabis had the substantive effect of treating Wayne differently than other beneficiaries under the Plan.
The denial of coverage of a drug that was medically necessary and prescribed to Wayne by a physician was held to meet the standard of “disadvantage” required to make out a case for prima facie discrimination. The Board also noted that the Trustees were made aware of the differential impact upon Wayne when the Trustees were presented with extensive materials outlining Wayne’s disability and the negative impact of denying coverage.
The Board ultimately held that the Trustees’ denial of Wayne’s accommodation request, and subsequent decision to deny the coverage on a case-by-case basis or not to amend the Plan to cover his medical cannabis prescription amounted to a prima facie case of discrimination. The discrimination was held to be non-direct and unintentional.
Trustees Argument Regarding Justification and Reasonable Accommodation
The Board then turned to examine the evidence provided by the Trustees in order to determine if they discharged the legal onus of responding to the prima facie case of discrimination. In examining the evidence, the Board noted that:
- The Trustees did not raise any statutory exemption that would justify their exclusion of coverage and nullify the finding of prima facie discrimination;
- The Board was not presented with any specific evidence of undue hardship, such as increased costs, resulting from providing coverage for medical cannabis for Wayne; and
- The Board was not presented with any evidence that the extension of coverage on a case-by-case basis or as an amendment to the Plan would impact the premiums for beneficiaries or the financial sustainability of the Plan.
As a result, the Board concluded that the evidence provided by the Trustees was insufficient to discharge their legal onus.
The Board’s Order
Given the findings that Wayne had established a prima facie case and the failure of the Trustees to discharge their legal onus, the Board concluded that the Trustees had contravened the Act by denying coverage for medical cannabis to Wayne.
The parties had previously requested that the hearing be bifurcated with the Board first dealing with liability and subsequently with what remedy ought to be imposed.
Upon finding that the Trustees had contravened the Act, the Board directed the parties to attempt to negotiate an appropriate remedy between themselves. However, the Board ordered an interim remedy requiring the Trustees to forthwith being providing coverage for Wayne’s medical cannabis up to and including the full amount of his most recent prescription. The Board further ordered that coverage must continue until either:
- The parties reach an agreement on remedy that has been finalized by the Board;
- The Board issues a final decision on remedy; or
- An appropriate court has ordered otherwise.
It is worth noting that no monetary cap was placed on the interim remedy and that reimbursement would be required so long as Wayne purchased his medical cannabis from a producer licensed by Health Canada under the Access to Cannabis for Medical Purposes Regulations and could provide a receipt for his purchase.
Although the Board went out of its way to indicate that its analysis was case-specific and that the outcome does not entail that all private or public employee benefit plans are required to cover the cost of medical cannabis, one cannot help but feel that this decision is in fact precedent setting and may signal the opening of the floodgates for similar complaints to be made across the country. Indeed, a similar complaint was filed in Saskatchewan shortly after this decision was released.