02 Sep Six Employer Questions to Answer Before Imposing a Surcharge on Unvaccinated Workers
Read Time: 5 Minutes
Many employers are struggling to increase COVID-19 vaccination rates among their workforce, concerned not only about both the safety of the workforce but also the costs of COVID-19 treatment that could be avoided through vaccination. Some are now turning to the possibility of a higher premium cost, or surcharge, for any group health plan participants who remain unvaccinated. What are the hurdles you would have to navigate if you want to impose such a surcharge on your unvaccinated workers?
HIPPA Violations Can Be Avoided
Treating group health plan participants differently based upon a health factor – such as whether a participant received a vaccine – is generally prohibited by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). There is, however, a narrow exception for arrangements that comply with the wellness program rules in the HIPAA regulations. Under a compliant program, an employer may condition an incentive, offered in terms of the amount of employee premium contribution, on an employee’s participation in a wellness program. Many employers are already familiar with such a system as it pertains to a smoking cessation program.
You can develop a properly designed wellness program that takes vaccine status into account. Such a program must comply with all HIPAA wellness program rules and also reflect compliance with recent EEOC guidance related to vaccine accommodations.
Six Key Employer Questions to Resolve Before Imposing a Vaccine Surcharge
When considering implementing a program that imposes a surcharge on your unvaccinated workers, you should ask the following questions:
Proceed with Caution
Some employers have considered limiting group health plan coverage to those that are vaccinated, or perhaps limiting health plan claims for COVID-19-related illnesses to only those that are vaccinated. However, these suggestions would clearly violate HIPAA non-discrimination rules, and therefore should be avoided.
We’ll monitor the situation and provide updates as developments occur.
This information has been prepared for UBA by Fisher & Phillips LLP. It is general and is provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.