- Executives at some companies are now starting to charge unvaccinated workers more for health insurance premiums.
- They say they are doing so to encourage workers to get vaccinated and to offset costs incurred when employees are hospitalized for COVID-19.
- The policies are similar to those invoked on employees who smoke.
Most employees will continue to have the right to choose whether or not to get vaccinated against the coronavirus SARS-CoV-2 that causes COVID-19.
However, employees who decide not to get vaccinated could face higher health insurance premiums.
Many employers have tried offering incentives in order to encourage vaccination among employees, including cash payments.
But Delta Air Lines recently took a more aggressive approach when it announced that unvaccinated employees will be subject to a $200 monthly premium surcharge on their company-provided health insurance.
Surveys show that people in the United States are split on whether unvaccinated workers should pay higher insurance premiums.
For employers, however, the case for pushing employees to get vaccinated is clear.
In a memo to Delta employees, Ed Bastian, the airline’s CEO, noted that COVID-19 hospitalizations cost the company an average of $50,000 per case. He also said that every Delta employee hospitalized for COVID-19 illness during the previous few weeks had been unvaccinated.
“This surcharge will be necessary to address the financial risk the decision to not vaccinate is creating for our company,” said Bastian.
Unvaccinated Delta Air Lines employees also will be required to wear facemasks indoors and get weekly COVID-19 tests, according to Bastian.
In addition, salary protection for absences due to COVID-19 infections will only be offered to vaccinated workers “who are experiencing a breakthrough infection.”
There’s evidence that surcharges can be effective in encouraging vaccination.
A lawyer for Delta Air Lines said daily vaccination requests from employees have increased five-fold since the new policy was announced.
A survey by the disability insurance company Breeze also found that 31 percent of unvaccinated adults in the United States would get the COVID-19 vaccine if their health insurer raised premiums on them.
A number of companies have set for employees, which they are entitled to do as a condition of employment under federal law.
For companies reluctant to take that step, however, insurance surcharges could become an increasingly common tool for driving up vaccination rates and limiting financial risks for companies.
“Now that the initial wave of the pandemic is past and insurers are no longer waiving treatment costs, this is absolutely a conversation that’s being had,” Michael Giusti, a health insurance analyst at InsuranceQuotes.com, told Healthline.
“The exposure for a company that has 90 percent of employees vaccinated is significantly less than for one closer to the 50 percent national average,” he said.
Vaccinated workers also are less likely to cause a COVID-19 outbreak that could land their co-workers in quarantine, in bed, or in the hospital.
While some critics compare COVID-19 surcharges to charging more for people with obesity or hypertension, experts say the comparison isn’t valid.
“Your chronic illness isn’t going to jump to the person in the next cubicle,” said Kenneth L. Campbell, MPH, the program director of Tulane University’s online Master of Health Administration program and an assistant professor in the Tulane School of Public Health and Tropical Medicine in New Orleans.
Kim Buckey, vice president of client services at corporate healthcare benefits consulting firm DirectPath, told Healthline that Delta Air Lines’ announcement could open the door for other companies to follow.
“Self-insured companies are going to be very sensitive to this,” she said. “The costs can add up pretty quickly.”
Campbell told Healthline that the recent approval of the Pfizer/BioNTech vaccine by the Food and Drug Administration also will likely spur more companies to consider vaccine mandates and surcharges.
So could a federal court’s dismissal of a lawsuit filed by employees of Houston Methodist Hospital who had challenged the healthcare system’s vaccine mandate.
“This is a wakeup call for people to get vaccinated,” said Campbell. “We’re talking about bad decisions in terms of not getting vaccinated and these are the consequences.”
Buckey said that employers struggling to retain staff may be reluctant to add surcharges that could alienate a percentage of their workforce.
Companies that want to impose COVID-19 surcharges on health insurance premiums could also face some legal and regulatory hurdles.
Campbell pointed out that healthcare companies can legally charge up to a 50 percent surcharge to smokers.
However, Giusti said that smoking surcharges are allowed under a specific exception under the Americans with Disabilities Act, which otherwise prohibits discrimination based on health status.
“We’ll have to see if these COVID surcharges stand up,” he said.