New Jersey court enforces medical marijuana coverage

Courts seem reluctant to second-guess advice from doctors

Add a recent appellate court opinion from New Jersey to the growing trend of workers compensation decisions holding that insurance companies and employers must reimburse the cost of medical marijuana. In Hager v. M&K Construction, the court rejected an employer’s argument that the Controlled Substances Act preempts and overrides the New Jersey Compassionate Use Medical Marijuana Act and rejected the employer’s attempt to refuse to cover an injured worker’s pain treatment using medical marijuana.

While working for M&K Construction in 2001, Vincent Hager, then 28, suffered debilitating injuries when a truck delivering concrete dumped its load onto him. The pain from his injuries prevented him from working, and he left his employment with M&K in January 2002. From 2003 through 2008, Mr. Hager underwent several surgeries and medical interventions to address both his injuries and the related chronic pain. In 2008, his doctor prescribed him oxycodone, but his pain did not lessen. His doctor later prescribed Oxycontin, Valium, Lyrica and other pain medications, but these drugs had debilitating side effects. Mr. Hager wanted to come off the opioids and still manage the pain, and in 2016, a doctor determined that he was a good candidate for New Jersey’s medical marijuana program. Under that program, Mr. Hager paid $616 out-of-pocket for medical marijuana, has been opioid-free for years and reported that the cannabis “take[s] the edge off the pain” and helps with the muscle spasms. Despite the effectiveness of the treatment, M&K refused to reimburse the cost of his medical marijuana under the company’s workers compensation insurance because, while legal under state law, marijuana is still federally illegal.

Mr. Hager sued, and in court, M&K argued that it could not be forced to violate federal law by reimbursing its injured employee for medical marijuana treatments. The court rejected this argument, relying primarily on three rationales:

– First, the court found that an insurance company or employer does not violate the Controlled Substances Act by reimbursing an injured employee for medical marijuana purchased pursuant to a valid recommendation from a doctor. The insurance company or employer are not manufacturing, possessing or distributing marijuana by reimbursing bona-fide medical expenses, the court observed.

– Second, the court found that an insurance company or employer is not liable for aiding and abetting a violation of the Controlled Substances Act by reimbursing the cost of treatment using medical marijuana. Aiding and abetting requires intent and active participation in a crime before the crime is completed, and the court determined that reimbursement of legal medical marijuana expenses does not involve intent to commit a crime before any crime is completed.

– Third, the court found that there is not a threat of prosecution from the federal government for even arguably violating the Controlled Substances Act, or aiding and abetting such a violation, since Congress expressly has blocked the prosecution of supposed CSA violations connected to medical marijuana in states with medical marijuana programs. Notably, even though medical marijuana programs exist in the majority of states, M&K could not identify a single case where an insurance company or employer was prosecuted for reimbursing expenses for authorized medical marijuana treatment.

In the wake of a Maine court’s contrary ruling in Bourgoin v. Twin Rivers Paper Co., Hager v. M&K Construction reestablishes the trend, started in New Mexico, of courts requiring insurance companies and employers to reimburse the cost of authorized medical marijuana treatments. Moreover, the facts involved in Hager v. M&K Construction and the court’s analysis of the law highlight several key points that we expect to see in future cases:

– Medical, legal and social observers are increasingly acknowledging that medical marijuana is a legitimate and effective medical treatment. It helps real people with real injuries improve their medical condition. It is becoming less common for such treatments to be viewed skeptically, merely as a backdoor means to get access to otherwise illegal drugs for recreational use.

– The decision highlights society-wide concerns about possible adverse effects of opioids and acknowledges that medical marijuana can be a sustainable alternative to opioids for managing chronic pain.

– The court acknowledges that the cultivation, manufacture, distribution and sale of medical marijuana in New Jersey is not only legal, but well regulated, as is the case in numerous other jurisdictions.

– Finally, the court’s opinion reflects a widely held belief that insurance companies, employers and courts should not meddle in the doctor-patient relationship. No less than 48 times in the New Jersey opinion does the court reference that Mr. Hager was simply following the advice of his doctors in seeking pain treatment. It is reasonable to expect that other courts likewise will be reluctant to allow insurance companies or employers to second-guess the decisions made by patients in close consultation with their doctors.

The issues addressed in Hager v. M&K Construction will continue to come up as more states legalize marijuana for medical use. For example, the Massachusetts Supreme Judicial Court will soon hear argument in Daniel Wright v. Central Mutual Insurance Company — a case with very similar issues to Hager.

In sum, the trend favoring insurance coverage for medical marijuana treatments is growing — and for good reason — in line with wider legal and societal trends.


Marshall Gilinsky is a Boston-based shareholder with Anderson Kill P.C., a national law firm. Bruce Strong is an associate practicing in Anderson Kill’s New York office. Both are members of the firm’s Regulated Products Group.


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