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This article was published 25/1/2020 (312 days ago), so information in it may no longer be current.
Vaping is bad. Smoking pot… well, not so much. In a nutshell, this sums up the insurance industry’s new approach to cannabis, and vaping of tobacco and cannabis products.
It’s a seismic shift, one even insiders admit they would never have predicted a few years ago.
"Society is changing," says Joan Weir, director of health and disability policy with Canadian Life and Health Insurance Association Inc.
So, too, must the insurance industry regarding how it evaluates risk for life, critical illness and extended health benefits coverage when it comes to marijuana use and the controversial, and potentially dangerous, vaporization of tobacco and cannabis oil products.
"It’s a very hot topic," Weir adds, noting many Canadians are curious how doing either may affect their coverage or their ability to get insurance.
Much has changed in this respect. For example, smoking pot once put individuals who applied for benefits in the smoker category, more than doubling the cost of premiums, regardless of how infrequently they used the drug.
But in the last couple of years, insurers have changed their tune.
"Many insurers, not all, have decided that smoking two to five joints a week would be considered acceptable and classify an applicant as a non-smoker."
Weir further notes some insurers include edibles in this calculation — though that too is evolving, particularly since edibles recently became legal.
For advisers who help clients navigate the life and health insurance market, it’s one less concern.
Certified financial planner Daryl Diamond, also a chartered health underwriter who specializes in life insurance and estate planning, says the discussion rarely comes up with clients in his practice, Diamond Retirement Planning Ltd.
Despite being a veteran financial planner, Diamond admits he is not fully up to speed on vaping and cannabis use, and their effect on coverage for this reason.
That said, the discussion could arise more often, and the change in stance among insurers is remarkable, he says.
"Two decades ago, if you said you smoked marijuana just once in the last few years while applying, all the bells and alarms went off." Not only were people often relegated to paying higher premiums as smokers, Diamond says some folks were denied coverage.
"So it’s treated much more differently today,"
That said, people who vape marijuana or tobacco products — despite being considered a better option than smoking — are classified as smokers because it has been implicated in the mysterious, life-threatening lung disease in a handful of Canadians and thousands of people in U.S, says Lorne Marr, director of new business for LSM Insurance in Toronto.
Marr frequently speaks to media on both subjects. "Both are definitely something a lot of people are asking about because there are a lot of marijuana users and vapers out there."
It’s important to know individuals who already have coverage do not have to worry about current use, regardless of how much, affecting their plan —even if they qualified as a non-smoker, he says.
"Of course, your insurer may be a little skeptical if you started vaping one week after you’re approved," he says. "But the key point is the window when they’re analyzing your health is when you’re applying for coverage."
The caveat, is applicants must answer questions truthfully during the application process.
What’s more, "if you’re not clear on a question, make sure you ask your broker or insurer and get the answer in writing." As Marr explains, getting documentation can be indispensable should you make a claim and the insurer disputes its validity.
But even if you apply and get bumped into a smoker rate, you can abstain for a time, or reduce cannabis use within the acceptable limits, and reapply.
"If you stop smoking or vaping for 12 months, then you likely can re-apply again to be classified as a non-smoker," Weir says, adding a year of being smoke-free typically qualifies you as a non-smoker along with the lower premium costs these days.
Medical cannabis is also looked at differently. Manulife, for example, does not consider users, who do not use nicotine products, to be smokers. As such they typically pay standard premiums — albeit the amount consumed can affect premiums, says Anne-Julie Gratton, Manulife spokeswoman.
Also new, group benefits typically provide some coverage of cannabis costs — when prescribed by a physician — through health spending accounts, Weir says.
While largely up to employers to decide on this coverage, medical cannabis is often "like a physiotherapy benefit," she says.
"It’s a standalone, perhaps $500 a year, for about five indications."
These generally include treating nausea from chemotherapy, spasticity for multiple sclerosis, HIV/AIDS, palliative care and rheumatoid arthritis.
More recently, large insurers have added cannabis to extended drug coverage plans. Manulife, for example, partnered with Shoppers Drug Mart so its plan members — under the guidance of pharmacists specializing in medical cannabis — qualify for a percentage of the cost to be covered up to an annual maximum.
Generally coverage only applies to employer-sponsored plans. But that too is changing as Manulife recently added medical cannabis coverage to its individual Flexcare program plans.
All told the recent changes further reinforce how insurers are evolving with societal change, Marr adds.
But he also cautions one rule of thumb remains evergreen.
"When you’re not sure, ask and get the response in writing."