Benefit brokers consider efficacy of medical cannabis

• Key insight: Learn how employer medical-cannabis reimbursement is redefining health-benefit cost strategies.
• Supporting data: $100–$175 monthly stipends already offered by some platforms to cover medical cannabis.
• Forward look: Federal rescheduling and HHS initiatives could broaden employer reimbursement pathways.
  Source: Bullets generated by AI with editorial review

The landscape for what constitutes an employee health and wellness benefit is shifting, forcing a re-examination of health plan management strategies. Case in point: reimbursing employees for physician-authorized medical cannabis, which is gaining traction in roughly 80% of states that permit this practice in some form.

It squares with Health and Human Services Secretary Robert F. Kennedy Jr.'s holistic-health vision to Make America Healthy Again, and the U.S. federal government just loosened restrictions on cannabis use. Its classification under the Controlled Substances Act was downgraded from a Schedule I, which includes dangerous drugs like heroin and LSD, to a Schedule III alongside remedies such as Tylenol with codeine with a moderate to low potential for physical and psychological dependence.

For savvy benefit advisers, it represents an opportunity to help employers determine where it could fit within broader healthcare cost-management strategies.

"The future is very bright with respect to the expansion of the use of cannabis," says Gennaro Luce, founder and CEO of EM2P2, whose digital platform links medical cannabis patients, doctors, dispensaries and insurers.Gennaro Luce, founder and CEO of EM2P2

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Data suggests that cannabis can be medically beneficial, especially as a supplement or low-cost alternative to traditional pharma, including opioids for pain relief, he explains.

EM2P2's strategic partnership with the American Council of Cannabis Medicine and multiple large third-party administrators enables employers to include a medical cannabis reimbursement stipend of $100 to $175 a month.

The arrangement is offered as part of an employee health and wellness benefits package. Once a health plan member's condition is diagnosed, a doctor writes a prescription, which is purchased from a network dispensary and can be delivered to the individual's home. 

"Consultants and brokers are finally looking at this, and our broker network is growing incredibly fast," he reports.

From a broker and risk adviser standpoint, medical cannabis reimbursement is emerging as a healthcare cost management concept worth looking at more closely, but not something that they should oversimplify, suggests Kirk Miller, national program director for Trucoria, a top-20 U.S. insurance brokerage.

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While still in an early stage of development, he describes this market as an evolving reimbursement framework that may have value for certain employers and employee populations, depending on plan structure, compliance, workforce profile and whether there is credible data supporting its use.

In the face of rising employee health benefit costs, Miller says employers are looking for ways to improve employee experience, while also exploring alternatives or complements to traditional treatments.

"The real question is whether it can be implemented in a way that is clinically responsible, legally defensible, administratively workable and economically meaningful," he adds, noting that at some point it could be a reimbursable expense for a health savings account.

A powerful pain-management alternative
On average, medical cannabis covers about two dozen diagnosis codes, with chronic pain leading the pack. Luce says it can have a significant impact considering that roughly 20% of the U.S. population is on a prescription drug for chronic pain.

Other ailments include anxiety, post-traumatic stress disorder, insomnia, cancer-related symptoms like nausea, muscle spasticity from multiple sclerosis, epilepsy, neurodegenerative diseases and inflammatory bowel diseases. He notes that the side effects of medical cannabis are minimal to non-existent and medical cannabis could reduce or eliminate multiple prescriptions. Each state has its own rules pertaining to which conditions qualify for medical cannabis usage.

Medical cannabis will be particularly appealing to people who are proactive about their healthcare and lifestyle, especially younger generations that are seeking a more natural, less manmade lifestyle, Luce believes.

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That group also may include grandparents. The No. 1 growing demographic of medical cannabis is seniors, according to Miller, who says many are discovering edibles as a tasty alternative treatment.

In an interesting twist involving the presence of this topic in the employee benefits space, Blackwell Captive Solutions recently developed a homogenous group medical stop-loss captive to provide cannabis operators and growers in 40 states and Washington, D.C. with a viable, transparent alternative to traditional, fully insured health plans.

"Long constrained by regulatory uncertainty and lingering stigma, the cannabis industry has remained largely excluded from more efficient insurance structures despite having workforce demographics that are well-suited to them," according to Scott Byrne, the company's president.