A look at marijuana and workers’ compensation


For several years, I have talked with industry friends and clients about the effect of medical marijuana on workers' compensation. I anticipated that we would start to receive requests from doctors for authorization to treat injured employees with medical marijuana. Now that 21 jurisdictions have legalized medical marijuana and two states – Colorado and Washington – legalized the possession of small amounts of marijuana for recreational use, let's take a look at what the impact has been to date.

Marijuana, even for medicinal use, remains illegal under federal law. The conflict between state and federal laws remains a source of confusion regarding the rights and responsibilities of the employer, physician and injured employee and has likely limited the number of requests submitted for authorization to treat with medical marijuana.

While medical marijuana laws vary from state to state and have not yet been tested in each state's court, most exclude use during working hours or coming to work impaired.

Court rulings to date on workplace medical marijuana issues have been in the employer's favor. Rulings in states, including California, Michigan, Oregon and Washington have upheld the firing of medical marijuana users who test positive.

On January 27, 2014, the Colorado Supreme Court agreed en banc to review the Court of Appeals decision in Coats v. Dish Network, L.L.C., Colorado Court of Appeals Nos. 12CA0595 and 12CA1704.

This case involves a quadriplegic who is licensed by the state of Colorado since 2009 to use medical marijuana to control his muscle spasms. He worked as a customer service representative for Dish Network and was fired in 2010 for failing a random drug test conducted by the employer. Mr. Coats sued, arguing that he used marijuana within the limits of the license, never used marijuana on the premises of the employer and was never under the influence of marijuana at work. The Court of Appeals upheld dismissal of Mr. Coats' lawsuit because his medical marijuana use was subject to and prohibited by federal law, and was not "lawful activity" for the purposes of section 24-34-402.5 of Colorado Revised Statute, which prohibits termination based on lawful, off-the-job activity.

This case is being closely watched and could have huge implications for marijuana users in Colorado where marijuana is legal for both medical and recreational use.

At this time, there has been no binding precedent workers' compensation case related to the compensability of medical marijuana for treatment of a workplace injury. However, in September 2012, the California Workers' Compensation Appeals Board (WCAB) issued a noteworthy and encouraging panel decision in Cockrell v. Farmers Insurance and Liberty Mutual Insurance Company, (ADJ504565, ADJ2584271). The panel reversed a workers' compensation judge's finding that an injured worker was entitled to reimbursement for self-procured medical marijuana. The WCAB cited Health and Safety Code § 11362.785(d), which states that "Nothing in this article shall require a governmental, private, or any other health insurance provider or health care service plan to be liable for any claim for reimbursement for the medical use of marijuana."

Sedgwick’s current position is that benefits will not be paid for medical marijuana for the following reasons:

  1. Marijuana is a Schedule 1 drug per the Controlled Substances Act (CSA) and it is illegal to distribute, prescribe or purchase marijuana in the United States.
  2. Marijuana is not FDA-approved to treat any medical conditions or diseases.
  3. Workers' compensation is not required to cover the cost of medical marijuana according to provisions in the legislation of several states, including Colorado, Michigan, Montana, Oregon and Vermont.
  4. Medical marijuana is not approved in the Official Disability Guidelines (ODG), American College of Occupational and Environmental Medicine (ACOEM), or any of the state medical treatment guidelines and would be denied in utilization review, if recommended by a treating physician.
  5. The status of marijuana as a Schedule I substance prohibits the assigning of a National Drug Code (NDC) or a procedure code to medical marijuana for billing purposes.

To learn more about this topic, I encourage you to visit our recent Spotlight on Workers' Compensation that expands on this blog in greater detail. Most importantly, you are encouraged to contact me or my colleagues at Sedgwick to answer questions about your specific situation as it pertains to marijuana and the workplace.

I continue to believe that medical marijuana is an emerging risk for workers’ compensation, but let us know what you’re thinking. Do you think marijuana should eventually be approved for treatment in the workers’ compensation arena?


Darrell Brown, Chief Performance Officer

Back to Blog
Back to top