Employee Vaccination Approaches for COVID-19: What Employers Should Consider

RELATED 1/13/22 UPDATE: Breaking News: Federal Vaccine Mandate Blocked

When the COVID-19 vaccines first received emergency-use approval starting in late 2020, there was a lot of uncertainty about how to approach health and safety in the workplace. As more people became vaccinated, we saw a decrease in cases. And, slowly but surely our collective optimism grew. There was light at the end of the tunnel.

As the Delta variant surges, now making up 98.8% of cases, the game has changed. Michelle Mahaffey, Chief Human Resources Officer at Community Health Network, shared on their leadership’s team decision to mandate, “We made our decision before Delta hit. At the time, we weren’t expecting this surge. Our mission to take care of our patients and caregivers is at the heart of why this was important to us, as difficult a decision as it was.”

It’s all the more reason to continue evaluating your employee vaccination approach and make the decision that’s best for your organization, clients, employees and other stakeholders. While a vaccine mandate is not right for everyone, there are numerous opportunities for your organization to encourage and promote a healthy workforce. It’s important to understand your options and the compliance implications. First, let’s examine what’s happening in the market today.

Examining the Market

Earlier this week, the Food & Drug Administration (FDA) made a large, progressive step in the fight against COVID-19 when it issued full approval for the Pfizer vaccine. While this vaccine and others from Johnson & Johnson and Moderna had previously been issued emergency use authorization, this is the first vaccine to receive full approval.

On the heels of this approval, Delta Airlines made a strong statement by expressing their intent to begin charging unvaccinated employees $200 more per month on their health insurance premiums beginning in November. This approach could signal an emerging trend in how employers choose to handle the matter of employee vaccinations for the COVID-19 virus.

To this point and prior to the FDA’s full approval, most employers who have taken a strong position regarding employee vaccination status have decided to make the vaccination a condition of employment. Meaning, that to be employed, you must be vaccinated. Among employers taking this approach include the likes of Walmart, Google, Disney, United Airlines, CVS, Walgreens and many more.

While these major employers have made taken their stance, there are many who are still weighing their options and working diligently to determine what is best for their businesses, people and other stakeholders. As your organization sorts through the potential options, there are several compliance concerns that must be addressed.

Watch my interview with WRTV and hear what organizations like Indianapolis Symphony Orchestra are doing to keep employees and patrons healthy and safe.

Employee Vaccination Approaches

Our NFP compliance team has pulled together the common employee vaccination approaches employers are considering and what legal components you need to look out for.

Providing a reward or applying a surcharge on the group health plan cost based on vaccination status.

This design requires employers to comply with HIPAA’s wellness plan rules, the Americans with Disabilities Act (ADA) and other rules such as the ACA’s employer mandate affordability rules. The Health Information Portability and Accessibility Act (HIPAA) limits the amount of the incentive, requires notice to employees and requires a reasonable alternative standard for those who cannot get the vaccine because of a medical reason.

For more details on vaccination incentives and surcharges, tune in to NFP’s on-demand webinar here.

Providing a cash benefit, prize or PTO to all employees based on vaccination status.

The ADA rules apply. Under HIPAA, this option enters a grey area, because there’s an argument that offering this benefit or incentive to all employees could create a stand-alone wellness plan that would also be subject to the HIPAA wellness rules discussed above. If that argument is correct, this option would make it harder for you to comply with other benefits-related laws (like ERISA and the ACA). You should also keep in mind your obligation to tax the benefit.

Offering the vaccination through the employer/onsite or through an employer-appointed third party (with or without a reward).

ADA rules will apply and require that the vaccination program not be “coercive.” There is also the concern that HIPAA wellness rules could apply in addition to HIPAA and ADA privacy concerns. You may also need to consider any liability issues that could be caused by adverse vaccine reactions.

Excluding COVID-19 treatment for unvaccinated participants.

HIPAA likely prohibits this practice altogether, as it is discrimination based on a health factor. This design is likely so prohibitive that it would not meet the HIPAA wellness plan standard of being “designed to encourage health” versus penalizing employees who get sick. Also, the HIPAA privacy rules may prohibit your organization’s access to medical records, which you would need to specify those individuals who received such treatment under the plan.

Mandating the vaccine.

Under federal law, it appears that employers may mandate the vaccine for employees returning to the office. Employers must comply with the ADA by providing a reasonable accommodation to employees with a medical disability or sincerely held religious belief that prevents them from taking the vaccine. Laws in some states may restrict this practice. If you’re looking to impose a vaccine mandate with employment consequences for refusing a vaccination, you will need to consult with employment law counsel.

Michelle Mahaffey shed some light on how their leadership team approached the decision. “We consider ourselves to play an important role in caring for people in the communities around us. That includes our caregivers. We want to equally care for and provide the best opportunities to be healthy—for everybody.” Locally, all the major hospital systems in the metro Indianapolis area have gone this route.

Communication is Key

Regardless of which direction you decide to go regarding employee vaccinations, the craft and care of rolling out successful communication is a critical component. For Community Health Network, the approach was rooted in robust, physician-led education about the vaccine for their caregivers. Mahaffey said, “There’s been a lot of misinformation. We want our people to have real information, real truth around why we’re doing what we’re doing and what the science says.”

As with everything since the COVID-19 pandemic began, it seems that new information and perspectives become available daily. The First Person Advisors and NFP team will continue to provide further updates as more specific legal guidance becomes available to help employers set their course.

If you have any questions please reach out to your advisor or Katy Stowers, our in-house ERSIA attorney. You can also drop us a note here or tweet at us!

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