Workers’ Compensation & Marijuana
Greg Fears

Workers’ Compensation & Marijuana

Greg Fears December 11, 2018 Posted in: Blog Posts, News, Workers’ Compensation

Marijuana legalization is increasingly prevalent in the United States. Whether for medicinal or recreational use, marijuana is more acceptable these days. A greater number of physicians are prescribing it for their patients, and the U.S. marijuana industry is rapidly expanding. Yet it is still a Schedule 1 drug, as defined by the U.S. Drug Enforcement Agency (DEA). So is an employee who is either prescribed or legally using marijuana eligible to receive workers’ compensation (WC) benefits if they are injured on the job and test positive for it?

In Oklahoma, a recent case addressed this very question. Here is the background, as reported by in a November 30, 2018 article entitled “Oklahoma ruling could set precedent for workers comp cases":

“The case stemmed from a 2017 accident at Berry Plastics Corp. Employee Dillon Rose’s hand was crushed when a co-worker activated a machine Rose was trying to fix. A drug test after the accident showed that Rose had recently smoked marijuana, which called into question whether the accident was Rose’s fault.

Rose’s co-workers said he didn’t appear impaired while on the job, and Rose told an administrative law judge that he was no longer affected by the marijuana that he had smoked the night before.

The judge approved Rose’s worker’s compensation claim, citing a lack of evidence from Berry Plastics that Rose was impaired by drugs. The Oklahoma Workers Compensation Commission reversed the ruling, calling Rose’s testimony ‘self-serving.’

Rose appealed the commission’s decision to the Oklahoma Court of Civil Appeals, which said that the commission went beyond its duty.

‘The critical focus is not whether an intoxicating substance was present in the worker’s system, but rather whether there was a causal connection between the accident and a state of intoxication, from whatever source,’ the court said.”

This case raises several questions/concerns:

  1. How many WC claims go unreported because the employee is prescribed or uses marijuana?
  2. How many WC claims are denied because the claimant tested positive for marijuana?
  3. What is “impaired/intoxication” and what level of “impairment/intoxication” from marijuana and related cannabis products is reasonable to deny or receive WC benefits? Who determines this level?
  4. Upon what criteria is "impairment/intoxication" based, and how do you measure it? Is it blood THC (tetrahydrocannabinol) level, a breathalyzer, hair sample or some sort of sobriety test? How is CBD (cannabidiol) treated differently than THC, if at all?
  5. Will this ruling result in more claims reported for the WC industry?
  6. Will insurers start more thoroughly investigating claims if employees test positive for marijuana, rather than automatically denying them due to positive test results?
  7. What happens if the state cannabis law and an employer’s employee manual conflict?
The important takeaway from this case is the “causal connection”: Yes, the employee may have tested positive, but did that cause the accident? This case is particularly interesting because it illustrates a shift in our society. Marijuana is becoming more acceptable, and additional states are passing laws to legalize its use. Those involved in the workers’ compensation system must adapt to this societal shift or risk battling it out in the courtroom, spending money on legal costs which will, in turn, lead to increased claim costs and, ultimately, higher rates for businesses. In reality, adapting to the ever-evolving marijuana legalization phenomenon could lead to increased claim costs anyway, as claims handlers or investigators spend more time on claims determining an accident’s “causal connection” if the claimant tests positive. 

Greg Fears is a Consulting Actuary with Pinnacle Actuarial Resources, Inc. in the Bloomington, Illinois, office and has over 17 years of experience in the property/casualty industry. He has considerable experience in assignments involving loss reserving, funding studies, loss cost projections, captive feasibility studies, risk margin calculations, simulation methods, deductible analysis, cost allocation mechanisms, financial analysis of insurance companies, commercial lines ratemaking and competitive analysis. Greg is an Associate of the Casualty Actuarial Society, a Member of the American Academy of Actuaries and an Associate in Risk Management.

«June 2020»