Medical Marijuana is Not Prohibited Worker’s Compensation Expense Under State Law

The New Hampshire Supreme Court recently ruled that New Hampshire’s therapeutic cannabis (or “medical marijuana”) law does not prohibit workers’ compensation insurance carriers from reimbursing expenses for medical marijuana. The issue underlying Appeal of Panaggio (New Hampshire Compensation Appeals Board), No. 2017-469 (March 7, 2019) (https://www.courts.state.nh.us/supreme/opinions/2019/2019017panaggio.pdf) was whether a workers’ compensation insurance carrier could deny Mr. Panaggio reimbursement for reasonable and necessary expenses for medical marijuana.

New Hampshire’s medical marijuana law (RSA 126-X) allows qualifying patients to legally possess and use marijuana for medical purposes.  Under New Hampshire’s workers’ compensation law (RSA 281), Mr. Panaggio, injured on the job, was entitled to reimbursement by his employer’s insurance carrier for reasonable medical expenses that are necessary and causally related to his work injury.  Since 2016, Mr. Panaggio had been a qualified patient in the New Hampshire therapeutic cannabis program established under the medical marijuana law.  However, when Mr. Panaggio submitted a receipt for the cost of the medical marijuana to the workers’ compensation insurance carrier, the insurance carrier denied reimbursement on the ground that the medical marijuana was not reasonable, necessary, or causally related to his injury.  Mr. Panaggio appealed, but the Department of Labor agreed with the insurance carrier.

Next, Mr. Panaggio appealed to the New Hampshire Compensation Appeals Board.  The Board disagreed with the insurance carrier’s position and found that Mr. Panaggio’s use of medical marijuana was both reasonable and medically necessary.  However, the Board still upheld the insurance carrier’s refusal to reimburse Mr. Pagannio because, the Board reasoned, reimbursement for medical marijuana is prohibited under both state and federal law.

The Board found that reimbursement was prohibited under state law because RSA 126-X prohibits insurance carriers from reimbursing expenses for medical marijuana, and reimbursement was prohibited under federal law because medical marijuana is illegal federally, implicating the insurance carrier in a federal crime.  Mr. Pagannio appealed the Board’s decision to the New Hampshire Supreme Court.

The Supreme Court addressed two main issues on appeal.  The first issue was whether the medical marijuana law prohibits insurance carriers from reimbursing medical marijuana expenses under the workers’ compensation law.  The second issue was whether the fact that medical marijuana is illegal under federal law prohibits insurance carriers from reimbursing these expenses even if they qualify for reimbursement under state law.  The insurance carrier did not challenge the Board’s finding that Mr. Pagannio’s use of medical marijuana was reasonable and medically necessary.

The Supreme Court reversed the Board on the first issue, holding that New Hampshire’s medical marijuana law does not prohibit insurance carriers from reimbursing medical marijuana expenses under the workers’ compensation law.  The Supreme Court explained that the plain language of the statute merely states that nothing in that chapter requires reimbursement for medical marijuana expenses.  In addition, the medical marijuana statute provides that a qualifying patient shall not be denied any right or privilege for the therapeutic use of cannabis in accordance with the chapter, and the workers’ compensation statute expressly entitles qualified patients to reimbursement of reasonable, necessary medical expenses related to a work injury.

The Supreme Court vacated and remanded on the second issue regarding federal law, holding that the Board did not make findings or provide a record of its reasoning sufficient for the Court to render meaningful review.  The Supreme Court explained that the Board did not cite any legal authority or identify a federal statute to support its conclusion that the insurance carrier may not reimburse qualifying expenses for medical marijuana.

The Court’s decision in Appeal of Panaggio establishes that New Hampshire’s medical marijuana law does not prohibit insurance carriers from reimbursing expenses for medical marijuana under the workers’ compensation law.  However, the remand of the second issue leaves open whether or not insurance carriers are prohibited from reimbursing the expenses due to the continued illegality of medical marijuana under federal law.

About the Author: Kelley Stonebraker

Print this entry

^ Top

Clients. Colleagues. Community.

Since 1946, Orr & Reno has strived to provide our clients with high-quality, ethical and valued legal services; foster a collegial work environment; support professional and personal balance; and invest in our community.

Contact Us