New Hampshire Supreme Court Clears the Way for Employees to Receive Medical Marijuana Reimbursement for Work-Related Injuries

March 22nd, 2021, Labor & Employment, Medical

By: Patrick Landroche, Esq.

Imagine this: Johnny, a 19th century textile worker, is walking across the sewing floor when he gets blind-sided by a flying needle. He loses vision in his right eye, but finds the exit with his left. Johnny runs out of the mill, up the street, and into the nearest doctor’s office. He is angry. And he wants to sue his employer. But unfortunately for Johnny, he is injured, he will be out of work, and he cannot pay for the medical care he is about to receive. A trial three-years down the line will not help him now.

To help Johnny, the state proposes a law that would require the employer to pay for medical care related to the injury (and other benefits) without a trial—after all, Johnny was injured at work. To get the employer’s support for the law, the government makes it a rule that Johnny cannot later sue his employer in court (and win special damages for pain and suffering). Because the law benefits the employee and the employer, it passes through the legislature and is signed into law by the Governor.

That, folks, is a short (made up, but probably true) history of how New Hampshire’s workers’ compensation statute came to be. In New Hampshire, if employees are injured on the job, then employers are required to pay for their medical care (so long as the medical care is reasonable, necessary, and causally related to the work related injury). In exchange, employees cannot sue their employer in court. 

Fast forward to today: what if the employee’s doctor prescribes medical marijuana as treatment for the work injury? Does the employer (or the employer’s insurance carrier) have to pay for an injured employee’s medical marijuana? Earlier this month, in Appeal of Andrew Pannagio, the New Hampshire Supreme Court said yes.

In 1991, Andrew Panaggio suffered a work-related injury to his lower back. He struggled managing his pain, and experienced negative side effects from opioids. In 2016, he applied for a medical marijuana license. Shortly thereafter, he received his license and purchased his first batch. Mr. Panaggio submitted his receipt to his employer’s insurance carrier for reimbursement. But the insurance carrier refused to pay.

According to the carrier, it could not reimburse Mr. Panaggio because doing so would violate federal law. Specifically, because marijuana is still illegal at the federal level, the insurance carrier posited that it would be “aiding and abetting”—i.e., committing a federal crime—if it reimbursed the receipt. In addition, the insurance carrier alleged that medical marijuana was not a reasonable treatment.

Mr. Panaggio disagreed, so he filed an appeal with the Department of Labor. After multiple hearings, the Department ruled that medical marijuana was a reasonable treatment for the work injury; however, the Department agreed with the carrier that it would be committing a federal crime if it issued the reimbursement. As a result, the carrier did not have to pay Mr. Panaggio. Determined to receive reimbursement, Mr. Panaggio appealed the Department’s decision to the New Hampshire Supreme Court. On his second try, the Court delivered for him.  

The Court found that the insurance carrier would not be committing a federal crime by paying Mr. Panaggio (federal law did not trump a state’s order requiring reimbursement). While the Court went through a slew of federal preemption inquiries (federal preemption occurs when federal law supersedes state law), the key to the holding was that an insurance carrier is not “aiding and abetting” a crime by providing reimbursement. As the Court explained, an employer (or insurance carrier) would have to “wish or desire” to bring about a crime in order to be guilty of “aiding and abetting.” Because the employer was merely complying with the state law or a state order—in other words, the employer did not wish to bring about a crime—it was not “aiding and abetting” a crime. Accordingly, the Court held that the Department of Labor could order the insurance carrier to reimburse Mr. Panaggio.

All that said, here is what the decision means:

  • Going forward, employers and their insurance carriers cannot deny reimbursing medical marijuana for work-related injuries based on the legality (or illegality) of cannabis
  • The Court’s decision is indicative of a general acceptance of medical marijuana in the state

Please reach out to a member of our Labor and Employment Division for more information.