Does Insurance Cover CBD?

In June of 2010, the federal government implemented the Affordable Care Act requiring most Americans to obtain and maintain “minimum essential” health insurance coverage. [1]

Otherwise known as Obamacare, this act states that it was implemented in an effort to boost the nation’s economy via mandating a majority of the population to purchase their own health insurance plans if not provided one as a benefit of employment.

According to the Center on Budget and Policy Priorities, this goal has been met, at least with regard to Medicaid since the projected costs of operating this federal program in 2019 was $794 billion, yet is now 21.5 percent less than anticipated, or $623 billion. [2]

Though, if you ask the general public their thoughts on this program, the response is more mixed.

For some, this act was a blessing because it afforded people the opportunity to purchase health insurance at a reasonable rate regardless of any pre-existing health conditions. For others, specifically those who had previously gone without insurance in an effort to save cash, it created an additional financial burden or face the risk of being assessed a fine.

Either way, this act has forced United States citizens to really question their insurance policy and the benefits it provides. And one benefit a number of people are wondering about is whether insurance providers are required to pay for CBD (cannabidiol) when it is taken for its health benefits. In other words, does health insurance cover CBD oil?

Generally speaking, health insurance companies will not cover the cost of CBD oil or other CBD products, and there are a few reasons for this. For starters, though the Farm Bill of 2018 removed industrial hemp from the Controlled Substances Act, marijuana is still listed as a schedule I drug. [3] A schedule I drug is a drug that has “no currently accepted medical use in the United States, a lack of accepted safety for use under medical supervision, and a high potential for abuse.” [4]

In the past, this lack of accepted medical use and safety has been, in part, due to a lack of research thanks to hemp’s illegal status. However, actions being taken by federal agencies such as the U.S. Food and Drug Administration (FDA) could begin to change this reasoning, particularly by this agency approving the first ever prescription drug to include a marijuana derivative.

This was in June of 2018 and that drug was Epidiolex. Epidiolex can now be prescribed to help reduce difficult-to-control seizures in patients suffering from two fairly rare forms of epilepsy: Dravet syndrome and Lennox-Gastaut syndrome.

While this is one step closer to the legalization of medical marijuana, it doesn’t change the fact that this particular drug is still illegal on a federal level and, therefore, enforceable by the Drug Enforcement Administration (DEA). This is even though some states have legalized medical marijuana and/or marijuana used for recreational purposes.

These conflicting laws cause quite a bit of confusion about the legality of products derived from the cannabis plant, which includes CBD and related products. So, unlike other prescription drugs that are covered by health insurance plans, CBD products cannot be prescribed by healthcare professionals (except for Epidiolex). This is yet another reason health insurance companies can’t cover it. It’s not a prescription drug.

Does this mean that you can’t get any help with covering the cost of products that contain cannabinoids such as CBD? According to what some people are discovering, the answer is no.

According to some Spruce customers, their health savings accounts (HSA) are covering the cost of CBD products when they are purchased using a debit card. For instance, one customer from Alabama reported taking Spruce CBD cream for back issues and when they went to pay for it, the charge went through.

It should be noted that, according to the FSA Store, an online marketplace for “guaranteed FSA-eligible products,” CBD oil and other CBD products cannot be purchased with HSAs, or with FSAs (flexible spending accounts), LCFSAs (limited care flexible spending accounts), or DCFSAs (dependent care flexible spending accounts. [5]

The store further states that “the IRS [Internal Revenue Service] has yet to issue guidance on the eligibility status of CBD oil and products,” so maybe some HSA plans are taking this absence of guidance as implied approval of CBD-containing products?

That said, all HSA-offering insurance companies are different. Therefore, while some may allow CBD purchases to go through, others may not. In the case of the latter, many indicate that they follow the allowed deductions according to the Internal Revenue’s Publication 502.

The IRS Publication 502, which is titled “Medical and Dental Expenses,” states that controlled substances such as marijuana are not deductible as a medical expense and neither are nonprescription drugs and medicines, with the exception of insulin.

Perhaps one way health insurance companies are getting around this is by classifying CBD as a nutritional supplement since this publication states that nutritional supplements, vitamins, herbs, and other forms of natural medicine can be considered a medical expense if they are “recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician.” [6]

With that thought in mind, here are some of the highest-ranking HSA providers today, as well as what their website says about this category of purchases: [7]

  • Fidelity Investments – follows IRS Publication 502 [8]
  • Lively – offers a complete list of HSA-eligible items and services and CBD products is not on the list, but it does authorize the purchase of nutritional supplements “with a Letter of Medical Necessity from a doctor” [9]
  • The HSA Authority – follows IRS Publication 502 [10]
  • HealthEquity – follows IRS Publication 502 [11]
  • HSA Bank – follows IRS Publication 502 [12]
  • Optum Bank – follows IRS Publication 502 [13]
  • UMB Healthcare Services – follows Section 213(d) of the IRS Code which does not allow for deduction of nutritional supplements or “controlled substances that violate federal law” [14]; however, non-prescription pain relievers are eligible medical expenses under this code, so that may potentially be an authorized expense if you’re taking CBD for chronic pain medical conditions[15]
  • Fifth Third Bank – follows IRS Publication 502 [16]
  • Bank of America – follows IRS Publication 502 [17]
  • Further (formerly SelectFidelity Investmentsfollows Section 2013(d) of the IRS Code (see UMB Healthcare Services above for explanation), but does indicate that some items may be eligible for reimbursement with a Letter of Medical Necessity completed by a health care provider [18]
  • HealthSavings Administrators – follows IRS Publication 502 [19]

To know for sure whether you can use your HSA or FSA to purchase CBD oil or other related products, it is best to contact your insurance agent directly and ask.

In the future, it is possible that HSAs, FSAs, and all other medical expense accounts will cover CBD purchases. Especially as more governmental agencies realize and accept the value that this marijuana plant derivative offers those taking it for medical uses.

In the meantime, it may help to call your HSA or write a letter or email explicitly requesting permission to use your card to make CBD purchases. Alternatively, simply call the number on the card and ask them to allow purchases for Spruce to go through. This may be all you need to do to get your health insurance to cover CBD.

 

 

Sources:

[1] “Compilation of Patient Protection and Affordable Care Act.” Housedocs.house.gov. June 9, 2010. http://housedocs.house.gov/energycommerce/ppacacon.pdf

[2] Van de Water, P. “More Evidence of Post-ACA Slowdown in Health Care Spending.” Center on Budget and Policy Priorities. Mar 7, 2019. https://www.cbpp.org/blog/more-evidence-of-post-aca-slowdown-in-health-care-spending

[3] “2018 Farm Bill.” United States Senate Committee on Agriculture, Nutrition, & Forestry. Accessed November 11, 2019. https://www.agriculture.senate.gov/2018-farm-bill

[4] “Controlled Substance Schedules.” U.S. Department of Justice Drug Enforcement Administration Diversion Control Division. Accessed Nov 11, 2019. https://www.deadiversion.usdoj.gov/schedules/

[5] “CBD: FSA Eligibility.” FSA Store. Accessed Nov 11, 2019. https://fsastore.com/FSA-Eligibility-List/C/CBD-E821.aspx

[6] “Publication 502: Medical and Dental Expenses (Including the Health Coverage Tax Credit).” Department of the Treasury Internal Revenue Service. Jan 9, 2019. https://www.irs.gov/pub/irs-pdf/p502.pdf

[7] Acheson, L. “Our 2019 Rankings of 11 Top HSA Providers.” Morningstar. Oct 1, 2019. https://www.morningstar.com/articles/947613/our-2019-rankings-of-11-top-hsa-providers

[8] “How Can You Spend From Your HSA?” Fidelity. Accessed Nov 11, 2019. https://www.fidelity.com/go/hsa/how-to-spend

[9] “Nutritional Supplements.” Lively. Accessed Nov 11, 2019. https://livelyme.com/whats-eligible#Nutritional-Supplements

[10] “Allowable HSA Expenses.” The HSA Authority, Old National Bank. Accessed Nov 11, 2019. https://www.oldnational.com/docs/default-source/hsa-authority/employees-and-individuals/hsa-allowable-expenses.pdf

[11] “Qualified Medical Expenses (QME).” HealthEquity. Accessed Nov 11, 2019. https://healthequity.com/learn/qualified-medical-expenses

[12] “HSA, HRA, Healthcare FSA and Dependent Care Eligibility List.” HSA Bank. Accessed Nov 11, 2019. http://www.hsabank.com/hsabank/learning-center/irs-qualified-medical-expenses

[13] “Qualified Medical Expenses.” Optum Bank. Accessed Nov 11, 2019. https://www.optumbank.com/all-products/medical-expenses.html

[14] “Qualified medical Expenses.” UMB Healthcare Services. Accessed Nov 11, 2019. https://hsa.umb.com/individuals/use-your-hsa/qualified+medical+expenses

[15] “IRS Code Section 213(d) Eligible Medical Expenses.” Atlas.md. Accessed Nov 11, 2019. https://atlas.md/content/upload/files/IRS%20Code%20Eligible%20Medical%20Expenses.pdf

[16] “Health Savings Accounts (HSA).” 53.com. Accessed Nov 11, 2019. https://www.53.com/content/fifth-third/en/personal-banking/planning/HSA-main/HSA.html

[17] “Individuals & Families: What Is a Health Savings Account?” Bank of America. Accessed Nov 11, 2019. https://healthaccounts.bankofamerica.com/individuals-families.shtml

[18] “Eligible Expenses.” Further. Accessed Nov 11, 2019. https://learn.hellofurther.com/Individuals/Spending_Your_Account/Eligible_Expenses?mt-learningpath=hsabasics

[19] “FAQs.” HealthSavings. Accessed Nov 11, 2019. https://healthsavings.com/faq/