Delta ‘fees’ for unvaccinated may lead more staff to follow

Bloomberg

Employers weighing whether to follow Delta Air Lines’ lead and impose financial penalties on their unvaccinated employees could charge an unlimited amount depending on the type of wellness plan they choose.
The airline said that it would institute a $200 monthly surcharge on health premiums for employees who haven’t received a Covid-19 vaccine by November 1. Rather than imposing vaccine mandates, dozens of companies are contemplating surcharges on premiums while others are taking a wait-and-see approach, according to employee benefits consultants who work on health insurance matters.
Delta’s move came in the wake of the Food and Drug Administration’s full approval of the Pfizer-BioNTech vaccine and as Covid cases and hospitalisations have increased dramatically in recent months due to the highly transmissible Delta variant. Each hospitalisation comes with significant costs for employers. The airline said the average hospital stay for Covid-19 had cost it $50,000 per person.
“Federal employment law generally permits employers to mandate Covid vaccine or incentivise employees to get vaccinated,” Karen Pollitz, a senior fellow with the Kaiser Family Foundation, said. Under the Employee Retirement Income Security Act and the Affordable Care Act, employers can’t charge employees higher premiums for health benefits based on health status, but wellness incentives are an exception to those general nondiscrimination rules, she said.
Any group health plan, whether self-funded or fully insured, has the option of using wellness incentives to vary premiums for health benefits based on vaccine status, said Pollitz, who authored a recent article on what employers can do to require or encourage workers to get a Covid vaccine.
Delta did not respond to a question about whether its surcharge was part of a wellness plan. Wade Symons, national leader of the regulatory resources group and an employee benefits attorney at the benefits consulting firm Mercer, said some employers aren’t comfortable with vaccine mandates, and that’s where surcharges enter the picture. Health-contingent wellness programs typically require participants to achieve a specific health goal in order to obtain a reward. With a participation-only plan, no reimbursement or reward can be contingent upon
any health outcome.