Do I Have to Cover Rehab for My Employees?
Employers deal with a multitude of human resources challenges regularly. From hiring to firing and everything in between, it’s a full-time job keeping employees motivated and productive. You want your employees to be content with their working environment so they can produce their best work efficiently and effectively for your company.
However, sometimes valuable employees need help. When your employee needs medical or mental health treatment, what are the legal requirements, and what should you do when you’re considering covering rehab for employees?
What if Your Employee Needs Rehab?
No matter where you’re located, substance addiction is a growing problem. In 2023, approximately 17% of the American population aged 12 or older reportedly had substance use disorder.1 
Maybe you’ve noticed an employee who has not been acting like themselves and you suspect they may be using substances to cope with emotional or mental health issues. Possibly, an employee has talked to you about their need for rehab treatment. When these situations arise, it’s important for employers to understand the laws governing healthcare and rehab for employees.
Laws About Providing Rehab for Employees
There may not be a particular law that requires employers to provide rehab for employees, but the issue can become challenging if an individual has a history of drug use. The Americans with Disabilities Act (ADA) provides some limited protections for employees who are recovering from a substance use disorder.2 You don’t want to be stuck in the middle of a civil suit because you had to let someone go over drug misuse. It’s much better to assist an honest employee who, with the aid of rehab, will be valuable to the company again.
The ADA also suggests that employers provide reasonable accommodations for a person in recovery who is not currently using illegal substances at work but may be in danger of relapsing.2 This person may have stopped using but is now realizing their need for further rehab to stay strong during a stressful time. According to 42 U.S.C. § 12111(9) (1994) and 29 C.F.R. § 1630.2(o)(2) (1999), the employer would be obliged to provide reasonable accommodations in this matter.
The Role of Insurance
Many employers provide insurance coverage for their employees, especially if they have 50 or more employees. If this is the case with you, then your employees will have access to substance use treatment. The Affordable Care Act (ACA) mandates that all Marketplace insurance plans have some form of substance use treatment coverage included.3 Everyone’s plan is different, so the out-of-pocket costs vary.
As an employer, it’s a good idea to look into your plan’s specific coverage, so you can share this information with your employees if the need arises. If the employee has insurance through the company or is self-insured, you only have to arrange time away for them and to decide whether that will be paid or unpaid time off.
If they don’t have insurance, offering to help cover rehab may benefit you in the long term. Your employee is likely to be more productive and emotionally stable when they complete the program. They may feel more motivated at work, given the investment you’ve made in their well-being. Ignoring the issue, or deciding not to support their recovery, raises the risk of escalated problems and even damage to the company brand.
Getting Help for an Employee
If you’re contemplating assisting an employee with addiction rehab, reach out to American Addiction Centers (AAC), which has treatment centers throughout the United States. You can connect with a knowledgeable admissions navigator, who can answer your questions, explain treatment options, and discuss costs and ways to use insurance to pay for treatment.
