Health insurance supplement for authorized unvaccinated employees
As employers consider implementing an immunization mandate to encourage employees to get vaccinated against COVID-19, we recently discussed the merits of imposing a “vaccine surcharge” on monthly premiums for COVID-19. health insurance for employees who are not vaccinated. There were unanswered questions about specific legal issues, but now the Department of Labor (DOL), Health and Human Services (HHS) and the Treasury (collectively, the departments) have issued FAQ guidelines (the “FAQ”) to confirm that employers can incentivize employees by offering discounts on monthly insurance premiums for those who have been vaccinated for COVID-19 or impose insurance “surcharges” for those who choose not to be vaccinated (for reasons other than due to a health issue.) By making these clarifications, the FAQ also confirmed:
Insurance discounts / surcharges for COVID-19 vaccinations must comply with existing Health Insurance Portability and Accountability Act (HIPAA) wellness guidelines for activity-based wellness programs. Q / R-3 of the FAQ confirms that requiring an employee to be vaccinated against COVID-19 to benefit from lower health insurance premiums requires the employee to perform or complete an activity related to a factor of health and must therefore meet existing requirements. five criteria for activity-based wellness arrangements under HIPAA:
The program should be reasonably designed to promote health or prevent disease (the FAQ suggests helping to schedule immunization appointments and establishing a toll-free hotline to answer questions);
The program must provide a reasonable alternative standard to qualify for the discount on health insurance premiums (the FAQ suggests providing the discount if the individual can verify that it would be unreasonably burdensome or medically inadvisable to be vaccinated against COVID. -19 due to an existing medical condition);
The program must provide notice of the availability of a reasonable alternative standard (the FAQ suggests making compliance with CDC mask guidelines mandatory for any employee who cannot otherwise be vaccinated due to an existing medical condition) ;
The incentive premium (or penalty) cannot exceed 30% of the total cost of employee coverage when combined with all other wellness program premiums or penalties; and
All employees must have the opportunity to qualify for the incentive at least once a year.
Note that the FAQ does not require accommodation for religious or other non-medical reasons. There is also no ban on allowing employees to meet the vaccination criteria at any time of the year. However, the FAQ advises employers who are considering adopting COVID-19 vaccination incentive programs to consult section K of the W of the Equal Employment Opportunity Commission.hat you need to know about COVID-19 and ADA, rehabilitation law and other EEO laws.
The amount of the premium rebate / supplement must be included in affordability calculations under the Affordable Care Act. As we discussed previously, Q / A-5 confirms that the wellness incentives for COVID-19 vaccinations are considered the same as any other non-tobacco incentive. In determining whether the cost of the employee’s monthly premium is “affordable” under Section 4980H (b) of the Code, employers with more than 50 full-time or full-time equivalent employees should ignore any amount of discount. premium and include any vaccine supplement amount in the total cost of employee coverage.
Employers cannot exclude employees from eligibility or coverage under a group health plan solely because of an employee’s COVID-19 vaccine status. As an alternative to using a vaccine supplement to induce employees, several employers have considered providing an exclusion from coverage under a group health plan for COVID-related claims for unvaccinated employees. Q / A-4 clarifies that such exclusionary practices would violate HIPAA non-discrimination mandates and are therefore not permitted.
Employers must provide 100% coverage of all COVID vaccination costs, including recalls. The FAQ confirms that employers must provide coverage as part of their non-grandfather group health plan for 100 percent of the cost of all vaccines (in accordance with section 3203 of the CARES Act) and Q / A-1 confirms that this coverage mandate also includes the cost of any booster doses authorized or approved by the Food and Drug Administration or through emergency use authorization through the Centers for Disease Control. But in a welcome clarification, Q / A-1 and 2 indicate that due to confusion from previous guidelines, the mandate of 100 percent coverage under a group health plan will not be applied during the periods preceding the publication of this FAQ, October 4, 2021.
Conclusion: Other questions remain, such as how the immunization supplement program works during mid-year periods and whether it applies evenly to other dependents (or other questions raised in our previous articles). The FAQ clarifies many questions for employers who are considering implementing these provisions just in time for the upcoming health plan renewal season. For more information on imposing an immunization supplement on unvaccinated employees or for any other questions related to the wellness program, please contact the authors or Jackson Lewis’ attorney with whom you work regularly.
Jackson Lewis PC © 2021Revue nationale de droit, volume XI, number 278