August 27, 2021

Until recently most employers focused their efforts on encouraging employees to get vaccinated. However, now that the FDA has fully approved the Pfizer-BioNTech vaccine, and the data on the catastrophic health impact of the Delta variant on the unvaccinated has emerged, a shift in employers’ vaccination policies has begun. Recently, a number of employers, along with universities, government entities and the military, have imposed vaccine mandates, and some are considering health insurance premium surcharges for their unvaccinated employees.

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“It’s time to acknowledge what few in the public health field are willing to say: The campaign to persuade all Americans to voluntarily accept coronavirus vaccinations has hit its limit…The only way forward is to start embracing mandates. (…) Businesses see this is the only way.”

Joseph G. Allen, Associate Professor, Harvard University’s T.H. Chan School of Public Health

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“I think it’s going to make a big difference (…) there are some individuals who’ve been waiting for this full approval, and for them I think it will help…you look at the unvaccinated, about two-thirds of them say that they would get the vaccine if there was a mandate.”

Dr. Ashish Jha, Dean, Brown University’s School of Public Health

Some employers are considering increasing the health plan premiums for the unvaccinated. On August 25, 2021, multiple media outlets, including Bloomberg, Forbes, and CNBC published articles on Delta Air Lines imposing a monthly surcharge of $200 for health coverage premiums for unvaccinated employees, starting in November 2021. In doing so, Delta Air Lines was one of the first U.S. employers to levy such a significant financial penalty in an effort to increase employee vaccination rates. Other employer tactics involve regular mandatory testing for those that remain unvaccinated—and in some cases, even termination of employment for those who don’t comply with mandates.

Why Your CEO May Care

As more high-profile changes in employer strategies are announced, your leadership may take notice. Each organization should consider how their own strategy may evolve based on industry, geographic footprint, vaccination rates within their workforce, and any increased pandemic risk, with an aim to increase employee vaccination rates to protect the health of employees and the safety of the workplaces and customers.

Mandates are becoming more widely adopted for employees entering an employer’s facility or interacting with others in-person. The EEOC issued guidance generally permitting such mandates, with certain limitations. Going a step further and imposing surcharges for unvaccinated employees carries a number of compliance questions that need to be considered by your leadership and legal counsel. The financial burden related to the cost of treating those hospitalized with COVID-19 and the productivity cost of infection spread fueled by the unvaccinated are important considerations for leaders as well. The right strategy will depend on the culture of your organization, the industry, and the needs of your business, but the time for leadership to consider it once again is now.

(For more in-depth information regarding the legal considerations and potential compliance implications for employers, see Premium Surcharge for Unvaccinated Employees: Compliance Considerations).

What Employers Can Do

• Convene key decision makers to reassess the current risks and legal avenues available and determine what strategy is the best to meet your organization’s specific challenges and to remove barriers that are preventing more of your employees from becoming vaccinated.
• Continue educating and encouraging employees to get vaccinated by sharing data about the safety and effectiveness of vaccinations, citing trusted data sources, and helping employees understand how their decision to remain unvaccinated impacts their coworkers and family members. (For more information on the do’s and don’ts when it comes to communicating with the unvaccinated, see our recent podcast, Moving Forward with Empathy: Messaging to the Unvaccinated).
• Tactically leverage and apply any relevant data points (e.g., the vaccination status of your employee population and local public opinion survey data, especially in regions with low vaccination rates)
• Establish a position on vaccine mandates, incentives and/or penalties that balances your organizational needs and protects safety and well-being of your workforce.
• Seek alignment of your policies with influential voices among your employees and any union leaders, as appropriate. Assess the impact of any policy changes on negotiated union agreements, especially as they relate to health care premiums.
• If premium surcharges become an attractive option to drive vaccinations, consider their impact on the Affordable Care Act affordability rules and low-cost option offer of coverage as well as the relevant HIPAA nondiscrimination rules. Consult with internal and external legal teams and document your decisions.

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