Could substances such as medical marijuana and “magic mushrooms” soon be covered under employee benefit plans?

At the very least, two recent executive orders issued by President Donald Trump could expand the accepted use of these substances. This blog will review the executive orders and discuss the potential impact on employers and benefit plans.

What Are the Executive Orders?

Medical Marijuana

“Increasing Medical Marijuana and Cannabidiol Research” was issued December 18, 2025 and followed by an April 2026 order from the Justice Department and Drug Enforcement Administration (DEA) “immediately placing both FDA-approved products containing marijuana and marijuana products regulated by a state medical marijuana license in Schedule III of the Controlled Substances Act, as well as the initiation of an expedited administrative hearing process to consider the broader rescheduling of marijuana from Schedule I to Schedule III.” Previously, in August 2023, the Department of Health and Human Services (HHS) recommended to DEA that marijuana be controlled under Schedule III. “The recommendation from HHS included a determination that medical marijuana has a currently accepted medical use,” the December 2025 executive order noted.

The administrative hearing process to consider broader rescheduling began June 29, 2026.

Psychedelics

Another executive order, Accelerating Medical Treatments for Serious Mental Illness, was issued April 18, 2026. The order directs HHS to accelerate access to treatments for patients with serious mental illness. The order was followed by an April 2026 announcement by the FDA to support the development of serotonin-2A agonist and related products, a class of perception-altering psychedelic medications.

The FDA issued national priority vouchers for development programs studying:

• Psilocybin, the psychoactive compound found in some mushrooms, commonly referred to as “magic mushrooms,” for treatment-resistant depression

• Psilocybin for major depressive disorder

• Methylone, related to the drug commonly known as ecstasy, for post-traumatic stress disorder (PTSD).

In addition, the agency is allowing an early phase clinical study of noribogaine hydrochloride to move forward following an Investigational New Drug (IND) submission. The sponsor is investigating noribogaine as a potential treatment for alcohol use disorder.

Recent developments on psychedelics include the following.

• In July 2026, the FDA released final guidance for the industry entitled Psychedelic Drugs: Considerations for Clinical Investigations. The guidance is intended to provide a roadmap for researchers developing psychedelic drugs for the treatment of medical conditions.

• The FDA announced it will hold a public hearing on September 14 “to obtain feedback and perspectives on issues associated with the potential future therapeutic use of drug products containing a psychedelic drug substance in supervised and supported settings.”  

• On July 13, 2026, HHS and the Department of Veterans Affairs (VA) announced that they had entered a memorandum of understanding to “strengthen collaboration on the research, clinical development, and responsible deployment to veterans suffering from serious mental health conditions of potential future rapid-acting psychedelic drug products” if approved by the FDA.

What Are the Implications for Employers and Benefit Plans?

Medical Marijuana

Law firm Seyfarth Shaw explains that the executive order applies only to marijuana-based drug products that are approved by the FDA as well as marijuana handled within state-regulated medical marijuana programs. “All other marijuana—including recreational cannabis, most bulk marijuana, and products outside these regulatory channels—remains classified as a Schedule I controlled substance and therefore illegal under federal law,” a blog post states.

However, for medical marijuana, a review of blog posts on the topic predicts rescheduling could have the following impacts on employers and benefit plans.

• Americans with Disabilities Act (ADA) claims or requests for accommodations: Employers may see more claims from employees under the ADA alleging that they were discriminated against for using medical marijuana or that their employers didn’t accommodate their use of the substance.

• Discrimination claims: Health plans that don’t allow an employee into their plan because of the employee’s use of medical marijuana may see claims that they violated the Affordable Care Act (ACA). More employees or job applicants who use medical marijuana may claim that they are protected from discrimination in discipline or hiring decisions.

• Drug testing and workplace policies: While policies prohibiting the use or possession of marijuana on the job are still acceptable, zero-tolerance policies may be more problematic, especially if “(1) an employee uses medical marijuana outside of work, (2) there is no evidence of on-the-job impairment or (3) the employer takes an adverse action primarily based on a positive drug test,” according to Seyfarth Shaw.

• Reimbursement for medical care: Law firm Harris Beach Murtha wrote that reclassification could mean that medical marijuana may become a permitted medical expense that could be deducted from individual and business tax returns or could be reimbursed by a health savings account (HSA), flexible spending account (FSA) or health reimbursement arrangement (HRA). Plan sponsors and medical marijuana users should wait for future guidance on tax treatment from the Internal Revenue Service (IRS).

• Coverage of initial doctor visits: According to a Harris Beach Murtha blog post, an individual could seek a sick visit to obtain a prescription for medical marijuana that would be covered at the same cost as any other sick visit under the plan.

• Coverage of other doctor visits: The blog states, “The Health Insurance Portability and Accountability Act of 1996 (HIPAA) prohibits health plans and issuers from discriminating against individuals based on health status. HIPAA requires benefits to be uniformly available and restrictions to be applied uniformly to similarly situated individuals. HIPAA permits certain exclusions, such as coverage of certain drugs or treatments, coverage based on medical necessity or experimental treatment, or cost-sharing limits.”

It’s too soon to know exactly how rescheduling could affect group health plan design and coverage strategies. Workplace safety policies and disability accommodations are the more likely next steps for employers.

Psychedelics

According to an article by Andy Johnson in the May/June 2025 issue of Benefits Magazine, ketamine is the only medication categorized as a psychedelic that is currently legal and available nationwide. “In 2019, a nasal spray derived from ketamine and sold under the brand name Spravato® (esketamine) received FDA approval for treating depression in adults. Otherwise, the only current FDA-approved use of ketamine is for anesthesia. However, ketamine-based treatments have been legal in every state through off-label prescriptions for various mental health conditions,” wrote Johnson, who is the fund administrator of the Teamster Center Services (TCS) Fund in the New York City area.

Oregon and Colorado have already decriminalized medical (and effectively recreational) use of psilocybin, and several municipalities have passed laws decriminalizing psychedelics or deprioritizing enforcement.

If additional psychedelic therapies receive FDA approval and become legally available following the April executive order, employers and benefit plan sponsors will likely need to consider mental health parity issues. In an article in the May/June 2025 issue of Benefits Magazine, attorney Barbara Zabawa wrote that group health plans that cover weight-loss drugs such as Ozempic® but do not cover legal psychedelic drugs for treatment-resistant depression may need to demonstrate that the method they used to decline the treatment for a mental health disorder is no more restrictive than the method used to cover a drug to treat diabetes or obesity.

As with any type of new medical treatment, there are unanswered questions. Infrastructure needs to be established, including physical sites for delivery and training of a qualified workforce. There also may be affordability concerns for patients.

Next Steps

“Employers may want to review and audit drug policies to ensure clarity on federal preemption, safety-sensitive positions, and potential consequences. Employers may also want to be prepared to reassess their reasonable accommodation approaches under the ADA and to consider approaches similar to those employers have used to address state disability laws in the past. Additionally, employers may want to stay updated on anticipated regulatory developments or guidance may be released by the DOT, DEA, and the Department of Health and Human Services (HHS),” advises law firm Ogletree Deakins.