Employees Could Be Charged More for Health Insurance If They Are Unvaccinated
While some employers such as Tyson Foods and United Airlines are mandating COVID vaccines at the risk of workers losing their jobs, others are starting to look at alternative ways to incentivize their employees. One such manner would be to increase healthcare costs for the unvaccinated.
The Affordable Care Act and the Health Insurance Portability and Accountability Act typically prohibit adjusting individual insurance costs for anything but a few limited factors including age, geography, tobacco use and family size, Bloomberg reports. There is, however, an exception for employers, who can modify premiums to offer potentially tax-free incentives worth as much as 30% of the cost of coverage as part of workplace wellness programs.
“They do charge more for smokers, but that’s really the exception and not the rule,” Brandeis University’s Michael Doonan, the executive director of the Massachusetts Health Policy Forum, told NBC. “Unequivocally, people who have not had their vaccinations for COVID cost more money,” said Doonan, “Then you have more hospitalizations and more deaths.”
Wade Symons, leader of the regulatory resources group at Mercer, an employee benefits consultancy group, told USA Today that clients have been contacting him about how to charge unvaccinated employees more for their insurance to cover the costs of massive hospital bills.
Symons believes that some workers could face an additional $20 to $50 per paycheck — which would translate into several hundred dollars annually in extra costs. Though, he said he would expect it to be on the lower end of that scale.
“Unvaccinated folks have the potential to cost employers more from a health care cost perspective, so they’re feeling they’re justified in that additional surcharge,” he said, adding that it would be similar to employers tacking on a surcharge for workers who smoke cigarettes.
According to some experts, insurance surcharges could turn out to be more effective than mandates, which translates into several hundred dollars annually in extra costs. Denise Rousseau, professor of organizational behavior and public policy at Carnegie Mellon University’s Heinz College told USA Today that “people are loss-sensitive.”
“Losses are more painful than gains are good. If the incentives are experienced as a loss, they’ll act to correct that loss,” she added.
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Last updated: August 10, 2021