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Workers’ Comp and Drug Rehab


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Workers’ compensation insurance plans are designed to provide benefits to employers who suffer work-related injuries and illnesses. For example, the Texas Workers Compensation Act specifically provides that an insurance carrier must provide compensation to the employee if an “injury arises out of and in the course and scope of employment.” There are many different types of workplace injuries and illnesses that can occur, ranging from broken bones, burns, head injuries, cuts, back injuries, and even respiratory issues and lung ailments. Workers’ compensation benefits typically provide medical care as well as a monthly disability benefit. In an unusual case, an employee was recently awarded workers’ compensation benefits to cover in-patient drug and alcohol rehabilitation.

Matthew Kim and the Gen-X Clothing Shooting

On June 28, 2011, Gen-X Clothing store in Omaha, Nebraska, was robbed and the store's manager, Matthew Kim, was shot multiple times. It was determined that the shooting of Kim was an act of revenge because Kim reported an earlier robbery. After the shooting, Kim and his family received threats. As a result, Kim suffered from post-traumatic stress syndrome (PTSD), including symptoms of anxiety, insomnia, panic attacks, and nightmares.

Additionally, Kim, who prior to the incidents drank alcohol and had admittedly used recreational drugs, developed a drug and alcohol dependency. Professionals treating Kim first recommended that he seek outpatient drug and alcohol treatment, but soon determined that he needed inpatient treatment to safely detoxify without experiencing a potentially fatal withdrawal. Kim eventually entered inpatient rehab and filed a claim for workers’ compensation benefits to cover the rehab expenses. When Gen-X Clothing, denied his claim, Kim appealed.

Disability Plans and Addiction

While workers’ compensation programs are generally fairly generous, paying for almost any injury that occurs at work, regardless of fault, such plans do not typically cover drug rehab. In fact, one of the few exceptions for most workers’ compensation plans is that they will not cover workplace injuries that are a result of intoxication. Other disability programs, such as Social Security Disability Insurance, also tend to exclude covering impairments that are due to drug or alcohol use. On the other hand, drug addiction can be considered a disability under the Americans with Disabilities Act. Furthermore, many employer health insurance plans cover drug and alcohol rehab, and it is not unusual for employers to encourage employees to go to employer-paid rehab as a condition of continued employment. However, in contrast to employer medical plans, workers’ compensation insurance has the specific requirement of only covering injuries or illnesses that are work-related.

Drug Rehab is Compensateable under Workers' Compensation

If a worker’s drug or alcohol addiction is directly work-related, then workers’ compensation will likely cover drug rehabilitation. While it may be difficult to come up with many scenarios where drug or alcohol addiction is work-related, the case of Matthew Kim is one of those instances. The Nebraska Worker’s Compensation Court awarded Kim benefits to cover the cost of inpatient rehab and the court upheld the award after Gen-X Clothing and its insurance company appealed. The Worker’s Compensation Court found that Kim’s addictions and PTSD were a direct result of the robbery, being shot, and being threatened, all of which are related to Kim’s working at Gen-X Clothing.

The facts of the Matthew Kim case are far from typical. What other circumstances do you think would result in workers’ compensation insurance paying for an employee’s drug or alcohol rehabilitation?