Corporate Wellness & Benefits COVID

Strategies to Consider for Increasing Vaccination Rate in the Workplace

To help employers make an informed choice to improve the health and safety of employees, we outlined the regulations and pros and cons of vaccine mandates, incentives and penalties (and how this could all be a moot point if the federal appeals court removes the block on the OSHA vaccine-or-test mandate). 

Table of Contents:

This analysis is not legal advice but rather represents a current consensus of interpretations and opinions and potential strategies that may not apply to all businesses.  Contact us to learn more about how Bravo can help you track, report and reward vaccination status → 

First, A Little Background:

Twenty weeks ago on our podcast with Barbara Zabawa, we discussed whether or not it was legal for an employer to mandate a COVID-19 vaccine for their employees as a qualification for employment. Some employers turned to incentives to encourage vaccination instead of mandates, and others introduced premium penalties for unvaccinated employees. 

The Food and Drug Administration (FDA) fully approved the Pfizer-BioNTech COVID-19 vaccine in late August 2021, which seemed to accelerate employers offering incentives or applying surcharges to an employee’s health benefit costs based on vaccination status. Shortly after that, President Joe Biden signed orders for a vaccine mandate for federal employees and employees of federal contractors and directed the Occupational Safety and Health Administration (OSHA) to write a vaccine-or-test rule for employers with over 100 employees.

So, mandates, incentives or penalties seem to be the three most popular strategies to increase the vaccination rate and improve the health and safety of employees. Let's dive into the other questions so employers can make the best choice for their workplace.

Are employer-driven COVID-19 vaccine mandates permissible by law? 

In short, yes, with the proper precautions. Check out our podcast episode for more details, or keep reading for guidance from the EEOC and ADA about incentives as part of a wellness program. 

 

Why are employers considering incentives or penalties for vaccination status? 

The reasons a company might incentivize or penalize vaccination status are similar to incentivizing weight loss or penalizing tobacco use inside the wellness program. There isn’t a federal mandate forcing employees to stay under a certain BMI, and nobody’s blood pressure or cholesterol status places their coworkers’ health at risk. However, a population with high rates of tobacco use and chronic health conditions poses similar threats to productivity and healthcare costs just as time off, treatment and hospitalizations for COVID-19 cases do. 

It’s likely that the CEO of Delta Airlines, Ed Bastian, shared the same concerns of many leaders regarding the vaccine. Although there are health and safety reasons, no CEO wants their people to fear the loss of employment due to religious or personal beliefs. So, instead of mandating it, he gave employees a choice – get vaccinated or get a surcharge on your monthly premium.  

“Sometimes you actually have to kind of reach into someone’s wallet or do something that’s a disincentive for people to get off the fence and go get it done,” -Ed Bastian, Delta Airlines CEO (Forbes).  

This policy illustrates the fundamental behavioral economics principle called loss aversion, which means people are more motivated by the threat of loss than the possibility of reward.  

As with any employee incentive, there are certain best practices to ensure high engagement, or in this case, compliance. Read more tips about behavioral economics for incentives here →  

Are vaccine mandates more effective than incentives or penalties? 

Many healthcare systems and other essential businesses and organizations, including United Airlines, introduced vaccine mandates as an employment requirement, which they have also found effective. Dissimilar to wellness incentives, an employer probably won’t fire you because of high blood sugar, but it still speaks to those same behavioral economics principles. 

At its core, the difference between a mandate versus an incentive/penalty on vaccination status is the level of voluntariness, which may impact vaccination compliance. Employees who wish to remain unvaccinated when an employer-specific or federal government mandate is in place are only exempt from providing proof of vaccination if they have a sincerely held religious belief or a medical exemption. Employees who wish to remain unvaccinated when an incentive/penalty is in place simply avoid earning the incentive or may be penalized financially. 

A new paper by the National Bureau of Economic Research suggests incentives and penalties may not work as well as mandates to increase vaccination rates amongst an employee population. However, employers must account for variables such as incentive amount and structure (e.g., an individual opportunity for achievement or lottery-style) and employee attitudes about vaccines to choose the best strategy for their people and culture, especially as the labor market gets tighter.  

While a vaccine mandate may not sway a vaccinated person’s loyalty to their employer, it could influence an unvaccinated person’s decision to seek work elsewhere. In fact, “No Vaccine Required” on job listings seems to be gaining traction as a hiring strategy. Assessing attitudes and even vaccination status before implementing penalties or mandates (if the OSHA mandate doesn’t follow through) is at least a starting place. 

While the vaccine mandate for employers with 100+ workers is still under consideration (more on that below), you may consider incentives or penalties. Contact us to learn more about how Bravo can help you track, report and reward on vaccination status  

What do the EEOC, ADA and ACA say about vaccine incentives and mandates? 

Equal Employment Opportunity Commission (EEOC) and Americans with Disabilities (ADA) Guidance 

On May 28, 2021, the EEOC updated its guidance on Covid-19, clarifying that employers may offer employees an incentive for being vaccinated. It included a caveat that if the employer administers the vaccine themselves versus using a third party, only a nominal reward would be allowed because of the required pre-vaccine health questions. These questions may result in a ‘disability-related inquiry’ and violate the Americans with Disabilities Act (ADA). The EEOC confirmed that asking an employee if they have been vaccinated, with or without verification, is not a disability-related question and therefore does not violate the ADA. 

Employers who reward or penalize based on vaccination status must provide exemptions for those with a medical condition or sincerely held religious belief. An example of reasonable accommodation is allowing the employee to work from home.  

Affordable Care Act (ACA) Implications 

Federal law divides wellness programs into two categories, participatory and health-contingent. Each carries its own set of rules. The ACA definitions of the two in its regulations consider vaccine status participatory since it is not related to a health factor. Participatory programs do not have explicit restrictions on preventing a reward or penalty, nor do they define limits on the incentive amount. Providing a reward or penalty for proof of vaccination is not prohibited by the ACA. If an employer offers the incentive or penalty as a premium adjustment or other cost-sharing adjustment under the health plan, HIPAA privacy laws apply. 

The regulations state that the participatory wellness program must still apply uniformly within similarly situated employment groups as defined by ERISA.   

What could the OSHA vaccine-or-test mandate mean for my business? 

At the initial publishing of this blog on November 17, 2021, OSHA has issued an outline of their Emergency Temporary Standard, requiring that companies of over 100 employees be fully vaccinated or be tested weekly for COVID-19 before coming to work.   

The guidelines set in place by OSHA are being challenged (as of November 17, 2021) in circuit courts around the country. A lottery determined that the 6th Circuit Court of Appeals in Cincinnati, Ohio will hear the legal challenges. Until that happens, OSHA and The White House insist that businesses continue to implement the vaccination and mask mandates and protocols in an effort to make workplaces as safe as possible.

If the appeals are victorious and a vaccine mandate is not issued on a federal basis, turn to the data and ask these crucial questions: 

  1. If the numbers dictate that having an X% of vaccinated individuals in a population translates to Y% fewer COVID cases, how might the vaccination rate impact your productivity and claims costs? 
  2. If vaccinated COVID patients cost less to treat than unvaccinated COVID patients, is there a financial case to reward or penalize vaccination status? 
  3. What is the current vaccination rate within your employee population? How is the company performing in the areas of employee engagement and turnover? Do you foresee a mandate or penalty impacting engagement and turnover, and do those costs outweigh those that might be at stake in the long run from claims and productivity from COVID-19 cases?  

We have already incorporated vaccination incentives into a few of our client’s programs. As long as any further federal updates do not change the ADA or EEOC vaccination parameters, the number of wellness programs that include them could continue to increase.  

Be sure to check back to this post for any major vaccination mandate updates, especially as you continue to think about how this may impact your population and wellness program. 

Contact us to learn more about how Bravo can help you track, report and reward on vaccination status → 

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