Health insurance surcharge approved for non-vaccinated workers

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As employers are considering introducing a vaccination mandate to encourage employees to get vaccinated against COVID-19, we have recently discussed the benefits of adding a “vaccination surcharge” to monthly health insurance premiums for unvaccinated workers. There were unanswered questions on certain legal issues, but now the Department of Labor (DOL), Health and Human Resources (HHS) and the Department of Finance (collectively the ministries) published FAQ guide (the “FAQ”) to confirm that Employers can Incentivizing employees by offering discounts on monthly insurance premiums for people vaccinated against COVID-19 or by charging insurance “surcharges” for those who choose not to be vaccinated (for reasons other than a Illness). the FAQ also confirmed:

Insurance discounts / surcharges for COVID-19 vaccinations must comply with the existing health guidelines of the Health Insurance Portability and Accountability Act (HIPAA) for activity-based wellness programs. Q / A-3 of the FAQ confirms that an employee’s obligation to be vaccinated against COVID-19 in order to receive the benefits of lower health insurance premiums requires performing or completing a job related to a health factor, and thus the existing requirements must meet five criteria for activity-based wellness arrangements according to HIPAA:

  • The program must be appropriately designed to promote health or prevent disease (the FAQ recommends making vaccination appointments and setting up a toll-free hotline to answer questions);

  • The program must offer a reasonable alternative standard in order to qualify for the discount on health insurance premiums (the FAQ suggests applying the discount if the individual can demonstrate that vaccination against COVID-19 is unreasonable or unreasonable due to an existing illness would not be medically advisable);

  • The program must communicate the availability of an appropriate alternative standard (the FAQ suggests requiring compliance with the CDC’s mask guidelines for any employee who cannot otherwise be vaccinated because of an existing medical condition);

  • The incentive bonus (or penalty) in combination with any other bonus or penalty in the wellness program may not exceed 30% of the total cost of exclusive employee coverage; and

  • All employees must be given the opportunity to qualify for the incentive at least once a year.

Note that the FAQ does not require accommodation for religious or other non-medical reasons. There is also no prohibition on allowing employees to comply with the vaccination criteria at any time of the year. However, the FAQ advises employers considering introducing COVID-19 vaccination incentive programs to seek advice Section K of the Equal Opportunities Commission W.What you should know about COVID-19 and the ADA, Rehabilitation Act, and other EBO laws.

The premium discount / surcharge must be included in the affordability calculations according to the Care Allowance Act. As we discussed before, Q / A-5 confirms that health incentives for COVID-19 vaccinations are considered the same as any other non-tobacco incentive. To determine whether the employee’s monthly premium cost is “affordable” under Code Section 4980H (b), employers with more than 50 full-time employees or full-time equivalents must disregard any premium rebate amounts and insure any vaccination supplement amounts into the total cost of employee only.

Employers must not exclude employees from eligibility or insurance coverage under a group health plan solely on the basis of an employee’s COVID-19 vaccination status. As an alternative to using a vaccination surcharge as an employee incentive, several employers have considered excluding group health insurance coverage for COVID-related claims for unvaccinated workers. Q / A-4 clarifies that such exclusive practices would violate HIPAA non-discrimination rules and are therefore not allowed.

Employers must cover 100 percent of all COVID vaccination costs, including booster vaccinations. The FAQ confirms that employers must cover 100 percent of the cost of all vaccinations (in accordance with Section 3203 of the CARES Act) under their non-grandfather group health insurance plan, and Q / A-1 confirms that this insurance mandate also covers the cost for booster doses approved or approved by the Food and Drug Administration or through an emergency clearing through the Centers for Disease Control. However, in a welcome clarification, Q / A-1 and 2 indicate that the mandate for 100 percent coverage under a group health plan due to confusion due to previous guidance for periods prior to publication of. is not enforced this Frequently Asked Questions, October 4, 2021.

diploma: Questions remain, such as how the mid-year vaccination allowance program should work and whether it will apply consistently to other dependents (or other questions raised in our previous articles). The FAQ clears up many questions for employers considering implementing these regulations in time for the upcoming health insurance renewal season. For more information about collecting a vaccination surcharge for unvaccinated employees or other questions about wellness programs, please contact the writers or Jackson Lewis attorney with whom you work regularly.

© 2021National Law Review, Volume XI, Number 278


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