Companies get serious with unvaccinated employees

    December 17, 2021

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    Written By
    Anne M. Acosta

    Impatient to “move on” and get a workforce vaccinated against COVID-19, employers are growing impatient with unvaccinated employees as they look at the facts and statistics around COVID-19, the vaccine availability, and costs.

    COVID-19 vaccine by the numbers


    Let’s take a look at the state of the vaccine and the virus.

    1. COVID-19 vaccine and booster shots are available for anyone five years-old or older
    2. COVID-19 vaccines are FDA approved
    3. Delta variant is wreaking havoc in hospitals ... and is expected to worsen during the holiday season and winter months
    4. Omicron variant is already spreading globally amidst great uncertainty as more cases arise and more is learned

    Employers want to get back to business and “move forward” from COVID-19 pandemic, and they increasingly view unvaccinated employees as getting in the way of progress. Why?


    Unvaccinated employees have higher risk


    Human Resources teams are looking at the statistics surrounding COVID-19 medical charges for vaccinated vs. unvaccinated individuals and the data speaks for itself. Unvaccinated individuals carry higher risks of infection, hospitalization and death. To illustrate this further, let’s take a look at the Washington State Department of Health report on COVID-19 Cases, Hospitalizations, and Deaths by Vaccination Status on December 15, 2021 that included the following statistics on COVID-19:

    • Case Rates are 5 times higher in the unvaccinated population than the fully vaccinated population, among age groups: 12-34 year-old and. 35-64 year-old
    • Case Rates are 6 times higher in the unvaccinated population than the fully vaccinated population, among 65+ year-old
    • Hospitalizations are 23 times higher in the unvaccinated population than in the fully vaccinated population among 12-34 year-old individuals
    • Hospitalizations are 17 times higher in the unvaccinated population than in the fully vaccinated population among 35-64 year-old individuals
    • Hospitalizations are 11 times higher in the unvaccinated population than in the fully vaccinated population among 65+ year-old individuals
    • Deaths are 13 times higher in the unvaccinated population than in the fully vaccinated population among 65+ year-old individuals
    • Due to the small number of deaths for those between 12-64 years old and associated instability in rates when assessing by vaccination status, the Washington State Department of Health did not share death rate data for this group.


    A CDC report’s statistics are even stronger, citing that

    “The hospitalization rate of unvaccinated COVID patients is 29 times that of vaccinated patients.”


    Additionally, the above statistics are just beginning to include data from the newest Omicron variant, which appears to be three times more contagious than the already fast-spreading Delta variant.


    Unvaccinated employees increase costs


    Previously, insurance company waivers were helping to keep the costs of hospitalizations down, but insurers are phasing out the cost-sharing waivers for COVID-19 treatment, since there are highly effective vaccines have been available for nearly a year.

    In fact, according to an ABC10 article, as more waivers expire, and more people are hospitalized with COVID, most of the people who will get medical bills will be the unvaccinated. While employers recognize that there are legitimate medical and religious vaccine exemptions, most employees can indeed get the vaccine safely at this time.

    The majority of hospitalized patients’ bills currently range from $10,000 to $50,000 per stay.


    Sick employees take more paid leave


    Employers, who are already struggling with the Great Resignation, now have to fork out more money for unvaccinated workers, who are more likely to need to quarantine or be hospitalized due to COVID-19 than vaccinated employees.


    A growing number of companies are finding creative ways to tackle the increased risk (and cost) of unvaccinated employees


    Fees and programs to cover increased health insurance costs for employers are on the rise, and employers are getting creative. Here are a few that we’ve learned about in the past few months during open enrollment periods.


    Risk pool fee


    Mercyhealth, for example, charges a “risk pool fee” in lieu of health care premiums at $60 fee per month deducted from wages. According to an article featured in WABE, an Atlanta-based public radio station, Mercyhealth still has to pay for most of the costs associated with COVID-19 cases, missed work and hospitalizations, but the risk pool fee gives employees without valid exemptions an incentive to get the vaccine.

    It appears that the risk pool fee might have had an impact on vaccination rates. Alen Brcic, Mercyhealth’s vice president of people and culture shared,“...after the policy was announced in September, the vaccination rate among the health system’s employees rose to 91% from around 70%.”


    Increased health insurance cost for unvaccinated employees


    While there are several ways to pass increased health insurance costs to unvaccinated employees, here a few that some of our clients and the media have mentioned so far as examples.


    Monthly Healthcare Surcharge


    Employers like Delta Airlines announced that unvaccinated employees could face a $200 monthly surcharge on their health insurance. Since the average COVID-19-related hospital stay has cost the airline $40,000 per person, the company also added a policy that unvaccinated employees will no longer be eligible for additional paid leave for covid-related absences.

    Utah grocer Harmons is also charging an insurance premium surcharge of up to $200 per month to “unvaccinated associates who don’t qualify for an exemption or who chose not to complete a vaccine education series.” Noteworthy is that Harmons has an 86% vaccination rate.


    Wellness Programs


    Employers have long leveraged a carrot-based approach with wellness programs to help improve the health of their employees and to, thereby, offer cheaper insurance rates or for employees who participate in the employer-sponsored “wellness program.” These programs typically include anything from helping employees to quit smoking, encouraging them to take a certain number of steps each day, but now the program also includes getting vaccinated for COVID-19, for example. Wellness programs are often combined with incentives like a credit on health care, monthly gym fees, a Peloton or simply a credit towards your health care costs.


    Hard line: vaccinate or get fired


    United Airlines, on the other hand, decided to issue its own company mandate in August 2021, threatening to fire people who weren’t vaccinated by Sept. 27, 2021. More than 99.7% of its U.S. employees are now vaccinated, it said. The move was in response to the high cost of paid leave for unvaccinated employees, who had to take time off due to COVID-19 infections. Additionally, one can make the argument that travelers would be more inclined to fly with an airline that takes passengers’ health concerns seriously as well.


    Legal advice?


    While many believe that it’s not legal to charge different employees different amounts for health care, but that’s actually not the case. That being said, in order to ensure that wellness programs, fees and fines do not violate discrimination laws, companies must address the needs of employees who have medical or valid religious reasons for not meeting the stated targets. These could include either waivers or alternative ways for them to satisfy the requirements.

    According the National Law Review, Federal law permits employers to charge employees different amounts for health care if they do it through a program that promotes healthy behaviors and prevent disease.”


    Now what?


    As employers determine how to navigate the even more contagious Omicron COVID-19 strain, mounting pressure from paid leave, insurance rates and strains on already reduced staffing might cause more employers to resort to carrots or sticks in order to increase vaccination rates if doing so means reducing workplace hazards and costs.

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