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Should substance abuse insurance be part of your employee benefits?

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Substance abuse is common and may affect some of your workers. As an employer, you can support your workers by providing employee health benefits that include substance abuse insurance.

Mental Health and Substance Abuse Prevalence

In the 2020 National Survey on Drug Use and Health from the Substance Abuse and Mental Health Services Administration (SAMHSA), 21.4 percent of people aged 12 or older admitted to using illicit drugs in the previous year. Alcohol use was even more common, as might be expected – 50 percent of people said they drank alcohol in the previous month and 12.8 percent of these people were heavy drinkers.

SAMHSA describes substance use disorder as an impairment caused by the recurrent use of alcohol, drugs, or both. This impairment may include health problems, disability, or the failure to meet major responsibilities at work, school, or home. SAMHSA found that 14.5 percent of people aged 12 or older had a substance use disorder in the past year. Of these, 70.2 percent had an alcohol use disorder and 45.7 percent had an illicit drug use disorder.

Substance use disorders are often connected to mental health disorders. The U.S. Department of Health & Human Services says people with mental health problems may develop substance use disorders if they try to self-medicate. Some drugs also can lead to mental health problems. Additionally, mental health and substance use disorders can share some of the same underlying causes. In the SAMHSA survey, 21.0 percent of people aged 18 or older in 2020 had a mental illness and were more likely to use illicit drugs or binge drink – 6.7 percent of people had both a mental illness and substance use disorder.

The ADA and Discrimination

Substance abuse can have a major impact on a person’s work. It may negatively impact job performance and productivity and lead to higher rates of absenteeism and turnover. People who are dealing with substance abuse may also be more prone to accidents, injuries, and interpersonal conflicts. Crime is another concern, especially if workers have financial troubles because of their addiction. For jobs that involve heavy machinery and dangerous equipment – such as commercial driving, factory work, and construction – drug and alcohol use is especially risky.

According to the American Addiction Centers, the lost workplace productivity, health care expenses, and crime-related expenses related to drug abuse and addiction cost American society more than $740 billion annually. This gives employers a strong incentive to keep their workplaces drug free.

It’s important to note that substance use disorder can be considered a disability, meaning people who suffer from this condition may have protection under the law.

According to the U.S. Commission on Civil Rights, Title I of the Americans with Disabilities Act (ADA) gives employers the right to ensure the workplace is free from the use of alcohol and illegal drugs, but the ADA also gives workers with drug and alcohol addiction limited protection while in recovery. Employers cannot discriminate against someone who has a history of addiction but is not currently using. People who have been successfully rehabilitated or who are currently participating in a rehabilitation program and are not using can be covered by ADA protections.

According to Bloomberg Law, the Department of Justice recently confirmed this with a declaration stating that the ADA protects people who are recovering from opioid use disorder. Furthermore, employers who illegally discriminate against individuals with substance abuse disorder may face legal action. For example, the EEOC says a Chicago company will have to pay $60,000 over allegations that the company subjected an employee to a hostile work environment, asked about his medical history, and forced him to quit because of his opioid addiction disability.

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Essential Health Benefits

When a worker is experiencing substance use disorder, effective treatment is in the best interest of both the employee and the employer.

The good news is many health insurance plans already provide coverage for health care services that treat mental illness and substance use disorder.

According to, health insurance plans subject to the provisions of the Affordable Care Act must cover 10 categories of essential health benefits. One of these is mental health and substance use disorder services, including behavioral health treatment (counseling and psychotherapy).

Additionally, CMS says the Mental Health Parity and Addiction Equity Act of 2008 prohibits group health plans and health insurance providers from imposing limitations on mental health or substance use disorder benefits that are less favorable than the limits on medical or surgical benefits. This means the annual or lifetime dollar limits for mental health and substance use disorder benefits cannot be lower than the dollar limits for medical and surgical services. The health plan cannot charge a higher deductible or copay for mental health and substance use disorder benefits, either. However, some plans are not subject to these requirements, including those for self-insured small private employers with 50 or fewer employees and large, self-funded non-Federal governmental employers that opt out.

Does health insurance coverage pay for rehab?

Workers who need to go to rehab for their addiction may have coverage for this treatment under their health insurance policy. According to the American Addiction Centers, health insurance usually covers rehab and mental health treatment for substance use disorder, but the level of coverage can vary. It’s also important to consider whether the policy covers the specific treatment facility.

Just as with treatment for other medical issues, there may be copays and deductibles the policyholder needs to cover out-of-pocket. Since the health insurance company may also use networks of providers, it’s important to check whether a particular provider is in the network before seeking treatment.

Employee Assistance Programs

In addition to health insurance benefits with mental health and substance use disorder benefits, employers may offer Employee Assistance Programs (EAPs) to help employees who are dealing with addiction and other issues.

EAPs are employee benefit programs that can help employees deal with a variety of personal and work-related problems. Since many personal problems can impact job performance, these programs may help boost productivity, engagement, and retention.

Some programs use in-house services, whereas others outsource assistance. In some cases, EAPs may provide referrals. Despite the differences, these programs tend to provide help with many common issues. For example, EAPs may help employees access childcare, legal services, and financial counseling. EAPs can also help employees access counseling and assistance with mental health and substance use disorders. All these services are confidential.

Securing Help for Your Workers

Since substance use disorders are so common, employers are likely to encounter workers who are struggling with addiction at some point. You can help your employees recover by offering robust substance abuse insurance as part of your health insurance benefits. Higginbotham can help you put together a benefits package to show your employees you care and support your retention and recruitment strategies. Learn more.

Not sure where to start? Talk to someone who wants to listen.

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