Drugs are found in Sarah's system that had aided in the prevention of her recovery.  Sarah is indeed alive, but not well.  It will require a lot of time for recovery.  

It is decided that it is best at this time for Stephen not to know, having to deal with insurmountable grief ...having to cope with all this tragedy, beginning with his mom's reported death. 

No, it clearly seems best that he not know at this time. After all, what if she doesn't recover?