May 21, 2022
  • May 21, 2022

Health insurance may soon cost more for the unvaccinated

By on August 26, 2021 0

TAMPA, Florida – The conversation around COVID-19 and the workplace grows more complicated as companies roll out vaccination mandates this week.

Delta Airlines has received praise and criticism since announcing its decision to charge unvaccinated employees a monthly supplement of $ 200 on their insurance premium. Company officials said the extra money would pay for weekly coronavirus testing for employees who are not vaccinated.

“When you hit people in their wallets, it tends to change their behavior,” said Jay Wolfson, a professor at USF Health.

Higher insurance premiums could cause families across the country to adjust their budgets. Wolfson said that type of decision could be more achievable for companies than vaccination mandates.

“[Companies are] going to say, ‘You cost us extra money and we can show it. Therefore, you are going to pay the differential, ”Wolfson said.

Even with numbers supporting Delta’s decision, Wolfson expects legal challenges to arise. But he said passing the cost on to employees is nothing new. He compares this to companies that charge smokers higher insurance premiums.

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“Over the past decade, a number of employers have used the smoke-free policy as a basis to change or encourage change in employee behavior,” he said.

Wolfson said this kind of practice would not work for all private companies. It points to a specific industry where only 45% of its workers are vaccinated and businesses associated with that industry would be negatively affected by mandates or monetary consequences.

“The nursing home industry is extremely reluctant to impose it because the turnover rate in long-term care is so high. And they fear that if they demand it, they will lose their workers,” he said. he declared.

There is another factor that could drive up premiums. Many private insurers are no longer forgoing cost-shared COVID-19 treatment. At the start of the pandemic, insurance companies bore the cost of hospitalizations related to COVID-19, but now that vaccines are readily available to Americans, that is changing.

Data from the Kaiser Family Foundation shows that 72% of the two largest insurers in each state and DC are not waiving these costs. By October, an additional 10% will be phased out.

Wolfson said companies are accountable for their bottom line and that will determine how many other companies follow Delta’s lead.

“Private companies certainly have a compelling financial interest in doing something to protect both the health and well-being of their employees and the costs they incur,” he said.

We asked Wolfson if anyone could be exempted from being subject to higher premiums. He told us that if an employer’s plan is subject to all of the provisions of the Affordable Care Act (ACA), the only community premium adjustments could be based on beneficiary age categories or behavior. smoking.

Plans that are exempt under the Employees Retirement Income Security Act (ERISA) may include other factors, as they are not fully governed by the community valuation rule. Therefore, companies structured according to ACA requirements may not currently be able to use anything other than smoking and age as the basis for premium differentials. While exempt companies, which are not subject to ACA’s community rating restrictions, and are mostly large companies, may be able to use vaccination status for differentials. premium.

The new policy proposed by Delta is likely possible because the airline’s plan is likely ERISA exempt and not subject to ACA community pricing requirements.