Do I Have to Cover Rehab for My Employees?

2 min read · 4 sections

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 your employees motivated and productive. You want your employees to be content with their working environment so they can produce the best 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. The COVID-19 pandemic only worsened what was already a drug crisis in the United States. In 2019, approximately 7.7% of the population reportedly had substance use disorder.1 When the pandemic hit, people became more stressed, isolated, and worried, leading to a rise in drug use. Now the CDC says that about 13% of Americans reported starting or increasing their substance use to cope.2 This leads to many people in the workplace potentially needing drug rehab treatment.boss discussing how to cover rehab with employee

Maybe you’ve noticed an employee who has not been acting like themselves and you suspect they may be using opioids or other 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.3 You don’t want to be stuck in the middle of a civil suit because you had to let someone go over drug abuse. 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 an addicted person who is not currently using illegal substances at work but is in danger of falling back into that lifestyle.3 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 abuse treatment. The Affordable Care Act mandates that all insurance must have substance addiction treatment coverage included.4 Everyone’s plan is different, so the out-of-pocket costs will 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.

Next Steps

If you’re contemplating assisting an employee with addiction rehab, reach out to American Addiction Centers. Our intake coordinator will go over our treatment programs and discuss payment options. Get in touch today.


  1. Substance Abuse and Mental Health Services Administration. (2020). The National Survey on Drug Use and Health: 2019.
  2. American Psychological Association. (2021). Substance use during the pandemic.
  3. Sharing the Dream: Is the ADA Accommodating All? Substance Abuse Under the ADA.
  4. gov. Mental health & substance abuse coverage.
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