On
April 13, 2021, the New Jersey Supreme Court issued a unanimous decision in Hagar
v. M & K Construction. The Court held that under New Jersey workers’
compensation law, an employer can be required to reimburse the cost of medical
marijuana for an injured employee, affirming both a workers compensation court
order directing reimbursement and a Superior Court, Appellate Division decision
that had affirmed the workers compensation court order. In summary, the Supreme
Court reasoned as follows:
- New Jersey’s Compassionate
Use Medical Marijuana Act (CUMMA) does not require “a government medical
assistance program or private health insurer” to reimburse medical
marijuana costs. The Supreme Court held that this exclusion does not
apply to workers compensation insurers.
- The employee had presented
sufficient credible medical evidence that medical marijuana would be a
“reasonable and necessary treatment” for him and therefore compensable
under workers compensation law. He had presented credible medical evidence
that medical marijuana would ameliorate his chronic back pain and aid in
his overcoming the addiction he had developed to opioid painkillers.
- Congress has, for the past
seven fiscal years and continuing, prohibited the use of federal funds to
prosecute medical marijuana programs under federal criminal laws in those
states that have authorized the medical use of marijuana. The Court
therefore determined that the federal Controlled Substances Act has
effectively been “suspended” with respect to medical marijuana in those
states, meaning that there currently exists no conflict between federal
and state law in this area. The Court warned, however, that this
“suspension” was of “limited lifespan and may be repealed, removed or
changed” by Congress at any time.
- Even if the federal
Controlled Substances Act had not been “suspended” in this way, the
employer could not be guilty of aiding and abetting or conspiring in a federal
drug law violation. The Court interpreted each of these federal crimes as
requiring evidence of willing, voluntary participation. But in this case,
the employer did not “elect” to reimburse the cost of marijuana. The
employer had objected to paying the cost of marijuana and would be making
payment only under the compulsion occasioned by the order issued by the
workers compensation court.
Based on the Supreme Court
decision, employers should expect to be called upon the reimburse the costs of
medical marijuana in workers compensation cases if the injured employee can
persuade the workers compensation court that medical marijuana would be a
“reasonable and necessary treatment.” Employers should nonetheless consider resisting
paying medical marijuana costs and insisting on being ordered to make payment,
to take advantage of the defense suggested by the Court to possible aiding and
abetting/conspiracy charges.
The Hagar decision
applies only to workers compensation coverage, not to employer-provided health
insurance generally. Private health insurance remains exempt from mandatory
reimbursement of medical marijuana costs.
