As someone who is self employed, taking 5 weeks off sick and spending 2 of them in Ibiza seems to be unfathomably indulgent. Nice deal if you can get it, but it seems the OP and his colleagues are the ones paying for it.
Ibiza has quiet parts, but it's known as party island for good reason. Spending time there during peak party season no less. It isn't likely to be that quiet or recuperative - the process of flying there alone would too stressful for many legitimate health issues.
However, there may well be truly legitimate reasons for this - who knows what this person off sick is really going through, Ibiza could be a cherished location they feel safe in, familiarity with a particular hotel, etc. Or they might just be milking a soft system.
Tough position for you and your colleagues to be in, because even with a legit reason, they will likely be some resentment when they return.
Best bet is to give them the benefit of the doubt initially, if they've scammed anyone it will likely come to light sooner or later.