What You Need to Know
- Many surcharge proposals mirror tobacco-related health premium surcharges that have been legally imposed on tobacco users for decades.
- If your small-business client is considering imposing a vaccine-related surcharge, it's important to understand the rules.
- Employers must make reasonable accommodations for employees who decline vaccination because of a disability or religious belief.
In a post-vaccine world, many employers are starting to think outside the box when it comes to encouraging employees to receive the COVID-19 vaccine. It’s no secret that vaccination rates have stalled this summer — even as further incentives for vaccination become available and the delta variant has created a surge in infection rates nationwide.
Many employers are considering imposing a surcharge on unvaccinated employees who participate in employer-sponsored health insurance programs. The details of the surcharge proposals vary widely, although many mirror tobacco-related health premium surcharges that have been legally imposed on tobacco users for decades.
If your small-business client is considering imposing a vaccine-related surcharge, however, it’s important to understand the now-muddy rules and regulations surrounding these types of wellness programs before taking action.
Details of the COVID-19 Vaccine Surcharges
Countless employers have offered incentives to encourage vaccination even while many stopped short of requiring employees to receive the vaccine. Those incentives have included gift cards and paid time off work, but they haven’t provided the results some employers expected.
As a result, employers have begun to consider or implement surcharge programs to encourage vaccination in the workplace. Those surcharges might equal between $20 and $50 a month — amounts that are similar to the surcharges imposed on smokers who receive employer-sponsored health insurance benefits.
The surcharges, while designed to encourage vaccination, would also address problems the employer might face should the worker become infected with COVID-19. Unvaccinated employees are more likely to contract COVID-19 — increasing the odds that they could require hospitalization and costly medical treatment, as well as time away from work.
Those increased health care costs could raise the employer’s overall cost of providing group health insurance coverage and, therefore, increase all employees’ eventual health insurance contribution requirements.
Employers considering the surcharge for unvaccinated workers are largely also hesitant to mandate vaccinations across the board because of the substantial controversy the move might generate. The surcharge alternative would allow employees to make the choice about whether to receive the vaccine or not — but also require those employees to consider the cost of the decision to remain unvaccinated.