Delta Air Lines made some headlines recently when it announced that instead of imposing a vaccine mandate as some of its competitors are doing, it will instead charge its unvaccinated employees an extra $200 for health insurance premiums each month. So some simple math, and that equates to $2,400 more per year that unvaccinated workers will be paying in health insurance.
According to Delta CEO Ed Bastian, the added premium is to help offset the expense of hospitalization for those who become infected with the virus. Per Bastian, the average cost for Delta employees that have been hospitalized with the virus is about $50,000. Medical experts state that those who have been vaccinated may still contract the virus, but their chances of becoming severely ill are extremely low. Additionally, Delta is also ending COVID pay protection for those who are unvaccinated.
Delta’s policy has led some to wonder: Could this become a trend among companies who don’t want to go as far as mandating vaccines? Especially as Pfizer’s COVID vaccine has been given full approval by the FDA? (For comparison, Johnson & Johnson and Moderna’s COVID vaccines still just have emergency use authorization from the FDA.)
The answer: In a way, yes, but it could be quite tricky.
Delta Air Lines is different in this case because it self-insures the majority of its workers. However, in recent weeks more and more employers are taking healthcare-related measures meant to encourage Americans to get vaccinated and help slow the spread of this dangerous new variant. Specifically:
- About 75 percent of private insurers that waived COVID-related hospitalization costs in the pandemic thus far are now rescinding this.
- More companies are exploring if they can take a page out of Delta Air Lines’ book and increase insurance premiums for the unvaccinated.
But companies who explore the latter could run into an ethical dilemma that may force them to rethink these plans. Some could argue that singling out employees for making a personal choice not to be vaccinated crosses an ethical line. It could also lead to poor morale and decreased productivity.
Additionally, simply increasing insurance premiums isn’t something that most companies can just do. As we noted above, Delta Air Lines is in a unique position in how most of its workers receive medical benefits. So what can companies do if raising insurance premiums on the unvaccinated isn’t feasible? They can offer incentives and implement surcharges. For instance, employees that get the COVID vaccine may be eligible for a discount on their insurance premium as an incentive for getting the shot. Companies just have to make sure that whatever they do complies with regulations set by the Equal Employment Opportunity Commission.
The bottom line is that companies who don’t want to mandate the vaccine can find workarounds to incentivize or reward people who do become inocculated. Unlike what Delta Air Lines is doing, it just may not result in higher insurance premiums.
