Federal Regulations for Sober Living Homes

42 CFR Part 2 - Substance Use Disorder Records Confidentiality

Overview

42 CFR Part 2 protects the confidentiality of substance use disorder (SUD) treatment records. Originally established in 1975, it aims to encourage people to seek SUD treatment without fear of adverse legal or employment consequences.

Compliance Deadline: February 16, 2026 for the 2024 final rule changes.

What Records Are Protected

Part 2 protects "records of the identity, diagnosis, prognosis, or treatment of any patient which are maintained in connection with the performance of any program or activity relating to substance use disorder education, prevention, training, treatment, rehabilitation, or research."

Protected information includes:

• Patient Identifying Information: Name, address, Social Security number, fingerprints, photograph, or any information by which a patient's identity can be determined
• Diagnosis: Any reference to an individual's SUD or a condition caused by SUD made for treatment or referral purposes
• SUD Counseling Notes: Notes analyzing conversations during SUD counseling sessions

Who is Considered a "Part 2 Program"

A Part 2 program must meet TWO requirements:

1. Be "federally assisted" - Includes programs receiving federal funding, Medicare participation, or DEA registration for controlled substances
2. "Hold itself out" as providing SUD services - Any activity that would lead one to reasonably conclude the entity provides SUD diagnosis, treatment, or referral

Important for Sober Living Operators: A sober living home that only provides housing and peer support, without providing or billing for clinical SUD treatment, may not be a Part 2 program. However, hybrid programs that combine housing and treatment may fall under Part 2 rules.

Consent Requirements for Disclosure

The 2024 final rule simplified consent requirements:

Single Consent for TPO: Patients can now provide a single written consent for all future uses and disclosures for treatment, payment, and health care operations (TPO).

Required Elements of a Valid Consent Form:

1. Identification of parties authorized to disclose
2. Identification of recipients
3. Purpose of disclosure
4. Right to revoke statement with instructions
5. Expiration date or event
6. Patient signature
7. Date of signature
8. Redisclosure statement (for HIPAA covered entities)

Re-Disclosure Notice Requirements

Every disclosure must include a written notice. The abbreviated version:

"42 CFR part 2 prohibits unauthorized use or disclosure of these records."

Penalties for Violations

The 2024 final rule aligned Part 2 penalties with HIPAA:

Criminal Penalties:

• Knowingly obtaining/disclosing: Up to $50,000 fine and 1 year imprisonment
• Under false pretenses: Up to $100,000 fine and 5 years imprisonment
• For commercial advantage/malicious harm: Up to $250,000 fine and 10 years imprisonment

How Part 2 Differs from HIPAA

Fair Housing Act

Overview

The Fair Housing Act (FHA), enacted in 1968 and amended in 1988, prohibits housing discrimination. The 1988 amendments added disability protections critical for sober living homes.

How the FHA Applies to Sober Living Homes

Individuals in recovery from alcohol or drug addiction are considered persons with disabilities under the FHA, provided they are not currently engaging in illegal drug use. This means:

• Sober living homes cannot be treated differently than other residential housing
• Municipalities cannot use zoning laws to exclude recovery housing
• Landlords cannot refuse to rent to sober home operators based on residents' disability status
• HOAs must accommodate recovery housing the same as other residential uses

Reasonable Accommodations

Cities and counties must provide reasonable accommodations in land use and zoning rules where necessary for equal housing opportunity.

Examples include:

• Waiving occupancy limits
• Reducing parking requirements
• Exemption from "unrelated persons" definitions in zoning codes

Accommodation Requests Must Be Granted Unless:

• The request imposes an undue financial or administrative burden
• The request fundamentally alters the nature of the zoning program

What Operators Can and Cannot Ask

Operators CAN:

• Ask about income and ability to pay rent
• Run background checks (applied consistently)
• Check credit history
• Drug test applicants (if applied to ALL applicants consistently)
• Require drug testing as part of residency agreement

Operators CANNOT:

• Ask about treatment history or specific disabilities
• Request medical records as a condition of housing
• Require disclosure of specific diagnoses
• Reject applicants solely because they are in recovery

Common Violations to Avoid

Restrictive Zoning Enforcement:

• Requiring special use permits not required for other residential uses
• Enforcing spacing requirements between sober homes
• Defining "family" in ways that exclude recovery housing

Landlord/Property Owner Actions:

• Refusing to rent to sober home operators
• Terminating leases upon learning residents are in recovery
• Applying stricter standards than other tenants

Key Court Case: City of Edmonds v. Oxford House (1995)

The Supreme Court ruled that zoning ordinances defining "family" to exclude unrelated individuals cannot be used as a blanket exemption from FHA scrutiny. Cities cannot use definitions of "family" to restrict recovery housing.

Penalties for FHA Violations

Additional remedies include compensatory damages, punitive damages, injunctive relief, and attorney's fees.

Americans with Disabilities Act (ADA)

How Addiction/Recovery Qualifies as Disability

The ADA defines disability as a physical or mental impairment that substantially limits one or more major life activities.

ADA Titles Relevant to Sober Living

Title I - Employment: Covers employers with 15+ employees. Prohibits discrimination against qualified individuals with disabilities.

Title II - State and Local Government: Relevant when dealing with municipal zoning, permits, and services.

Title III - Public Accommodations: Covers access to goods and services in private businesses serving the public.

Employment Considerations

What Employers CAN Do:

• Test for illegal drugs (not considered medical exam under ADA)
• Require drug-free workplace
• Discipline employees for current illegal drug use
• Hold employees to same performance standards as others

What Employers CANNOT Do:

• Refuse to hire solely because of recovery history
• Discriminate against employees on MAT (Suboxone, Methadone, Vivitrol)
• Require disclosure of past addiction

HIPAA Considerations

When HIPAA Applies to Sober Living Homes

HIPAA applies only to "covered entities" - health plans, health care clearinghouses, and health care providers who transmit health information electronically for HIPAA-covered transactions.

A sober living home is likely NOT a HIPAA covered entity if it:

• Only provides housing and peer support
• Does not bill insurance for health care services
• Does not provide clinical treatment

A sober living home MAY be subject to HIPAA if it:

• Provides and bills for addiction treatment counseling
• Coordinates care with other providers who share PHI
• Bills insurance for services
• Operates under the "Florida model" (treatment + sober living combined)

Best Practices Even When Not Covered

Even if not legally required, following privacy best practices builds trust:

• Collect only information needed to operate safely
• Limit access to records to staff who need it
• Store records securely
• Have a privacy policy and share it with residents
• Train staff on confidentiality
• Dispose of records properly when no longer needed

Practical Compliance Tips

For 42 CFR Part 2

1. Determine if you're a Part 2 Program (federal funding + SUD services)
2. Use compliant consent forms with all required elements
3. Include redisclosure notices with every disclosure
4. Never disclose for legal proceedings without patient consent or court order
5. Train staff on confidentiality requirements
6. Compliance Deadline: February 16, 2026

For Fair Housing Act

1. Know that recovery housing is protected residential use
2. Request reasonable accommodations from municipalities in writing
3. Document any discriminatory treatment
4. Maintain good neighbor relationships
5. Keep properties well-maintained
6. File HUD complaint if accommodation denied

For ADA

1. Apply employment standards consistently to all
2. Engage in interactive accommodation process
3. Document performance issues objectively
4. Don't discriminate against MAT patients
5. Know that ADA Title II requires government accommodation

General Compliance Framework

• Document Everything: Policies, staff training, resident acknowledgments, incidents
• Train Your Staff: Privacy, fair housing, proper information handling
• Seek Professional Guidance: Consult compliance attorney when uncertain
• Regular Review: Audit compliance annually, update policies as regulations change