Starting next month, certain big employers will begin to charge unvaccinated employees an additional fee of $20-$50 per month.
Employers are beginning to add a monthly surcharge of $20-$50 onto the paychecks of unvaccinated workers, according to one of America’s leading health benefits consultancies. Up until now, employers have tried bribing their employees into getting vaccinated against Covid-19 with gift cards, days off work, cash rewards, and other financial incentives.
The carrot approach-giving employees rewards for completing healthy tasks-is about to be joined by a stick that could cost up to $50 a month, as stated by Mercer.
“Employers have tried encouraging employees to get vaccinated through offering incentives like paid time off and cash, but with the Delta variant driving up infections and hospitalizations throughout the country – at the same time that vaccination rates have stalled – we have received inquiries from at least 20 employers over the past few weeks who are giving consideration to adding health coverage surcharges for the unvaccinated as a way to drive up vaccination rates in their workforce,” said Wade Symons, Mercer’s regulatory resources group leader.
Mercer is not releasing the names of companies working on the surcharges but said that the amount being discussed with these employers is similar to monthly charges already given to employees who smoke, which range from $20-$50.
Aside from the obvious public health reason to encourage vaccination and keep workers and their families healthy, there is also a very real financial reason. Covid-19 can lead to serious illness and an expensive hospital stay that costs the worker and company-paid insurance, triggering premium increases as well.
Last week’s New York Times published an essay discussing how Covid-19 could result in higher costs for the unvaccinated in terms of health insurance premiums. “Getting hospitalized with Covid-19 in the United States typically generates huge bills,” Dr. Elisabeth Rosenthal and Stanford University’s Glenn Kramon wrote, citing examples that included “a $104,000 bill for a 14-day hospitalization in Miami for an uninsured person.”
Some employers are already using financial incentives, even though premium surcharges have only begun to be considered. According to Mercer data from a survey last month of more than 300 employers, only 10% provide a financial incentive while 19% offer extra paid time off instead. “Some employers are now offering additional time off so employees can assist with their children’s vaccinations.”
Benefits consultants have seen employers intensify their efforts to get workers vaccinated as employees return to the office after working remotely for 18 months.
“This past week a few big names, including Google and Facebook, announced plans to require all employees to get vaccinated for COVID-19 before returning to the office,” Mercer’s Symons wrote in a column last week on the benefits firm’s website. “And, while many employers are willing to take additional measures to increase vaccine levels, most employers continue to hold off on mandates because of potential employee relations issues that such a move might provoke. Now, with the Delta variant driving up infections and hospitalizations throughout the country – at the same time that vaccination rates have stalled – health coverage surcharges for the unvaccinated are a tactic employers are reviewing as an alternative to a mandate.”