Dive Brief:

• Workers appear increasingly receptive to penalties for their unvaccinated peers: 47% of respondents in an Eagle Hill Consulting survey conducted in early January said unvaccinated employees should pay higher insurance rates. 
• The number is up from 41% in August 2020. 
• Gen Z workers were the least supportive of higher insurance rates (33% of respondents agreed), while Baby Boomers were significantly more supportive (53% of respondents agreed). 

Dive Insight:

The finding that employees support higher insurance rates for unvaccinated co-workers is unsurprising, given the already-shifting attitudes toward those who refuse to get vaccinated. Of 1,309 employees surveyed by Qualtrics in November 2021, 55% of employees said they would consider reporting a co-worker for violating a vaccine mandate from the Occupational Safety and Health Administration or a similar authority.

Throughout 2021, employers favored careful nudges toward workplace vaccination. First came vaccination incentives, such as transportation compensation, paid time off, gift cards or direct deposited bonuses. Then, as mandates trickled in inconsistently and the U.S. Equal Employment Opportunity Commission published guidance about incentives, employers looked for other ways to encourage company-wide vaccination, implementing insurance surcharges for unvaccinated workers as one approach.

Insurance contingencies, health standards and surcharges

While insurance surcharges for tobacco users have paved the way and set a kind of precedent in this area, crafting insurance rate policies around vaccination status could require a higher compliance threshold. Furthermore, HIPAA and the Affordable Care Act generally prohibit group health plans from charging similarly situated individuals more for coverage (different premiums or contributions, or imposing different deductibles, copayments or other cost-sharing requirements) based on any health factor.

Exceptions are group health plans and their wellness programs, which fall into one of two categories under federal law, either “participatory” or “health-contingent.” 

Health-contingent wellness programs require that an individual reach a certain standard of health to receive a reward. Within this category are two-subcategories: outcome-based wellness programs (wherein participants are required to reach a specific health outcome) and activity-only wellness programs (wherein a worker performs an activity related to a health factor but doesn’t need to reach a specific outcome). 

Formal guidance in this area has yet to be issued, but a source from HR firm Mercer previously told HR Dive that a COVID-19 vaccination surcharge would likely fall into the health-contingent wellness program category. Under such a program, vaccination surcharges would be reigned in by federal law, not to exceed 30% of the cost for employee-only coverage under the health plan. Mercer typically sees employers looking at upcharges between $20 and $50 per paycheck for unvaccinated workers.

In Qualtrics’ 2021 survey, 52% of unvaccinated employees said mandates would make them less likely to get vaccinated. And even then, according to Qualtrics, unvaccinated employee retention hangs in the balance: 75% of unvaccinated respondents told Qualtrics they’d consider quitting their jobs if vaccine mandates were put in place. Only 12% said the risk of being fired for non-compliance could change their minds.