Delta Makes the Unvaccinated Pay

A new twist for vaccine mandates

Delta Air Lines has opened a new front in the push by companies to get employees vaccinated against the coronavirus. Yesterday, Delta said that workers who aren’t vaccinated by Nov. 1 will have to pay an additional $200 per month to remain on the airline’s health plan. More companies are considering imposing such fees on the unvaccinated, following the airline’s lead.

The shift from incentives like extra pay or time off to get the shot to financial penalties for choosing not to is a noteworthy change in corporate vaccination initiatives. Companies are taking a tougher stance even if they, like Delta, stop short of mandating that workers get the vaccine or lose their jobs.

Recent hospital stays because of Covid have cost Delta about $50,000 per employee, and every one of those workers was not fully vaccinated, Delta’s C.E.O., Ed Bastian, said in a memo to staff. Like most large employers, Delta insures its work force, meaning it pays health costs directly and hires an insurance company to administer its plans.

An insurance surcharge is technically complicated. Because employers can’t charge people with pre-existing health conditions higher insurance prices, the surcharges on the unvaccinated are structured as part of “wellness” incentive programs, which are permitted under the Affordable Care Act. These programs must be voluntary but can involve rewards or penalties as large as 30 percent of an employee’s health insurance premium.

How to leverage wellness programs to encourage vaccinations has been a preoccupation in boardrooms, with trade groups pushing regulators for clarification of what was allowed. “This is not rocket science, but it is not easy,” said Rob Duston, a lawyer with Saul Ewing Arnstein & Lehr. Employees facing surcharges who don’t want to be vaccinated can simply drop out of the company health plan. (Delta also said that unvaccinated employees would have to wear masks indoors, get a weekly Covid test and forgo payment protections if they missed work because of a Covid infection.)

So why not make vaccination mandatory? Companies are on sound legal footing for imposing vaccine mandates for employees. But “every company has to make its own decision for its culture,” Bastian told CNN. “I think these added voluntary steps, short of mandating a vaccine, are going to get us as close to 100 percent as we can.”

Geography and politics play a part. Companies balancing the risks of losing employees, altering company culture and facing political blowback can arrive at different conclusions, even within the same industry. United Airlines, which is based in Chicago, was an early mover in mandating vaccination, but its rivals like Delta, which is based in Atlanta, and American and Southwest, which are based in Texas, haven’t required vaccines. Gov. Greg Abbott of Texas issued an executive order yesterday banning coronavirus vaccine mandates, and Gov. Brian Kemp of Georgia has told businesses in the state that they don’t have to comply with local mask or vaccine rules.

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Economic growth in the U.S. appears to be slipping. The White House’s economic team has lowered its informal internal forecasts for this year, renewing efforts by the administration to get two multitrillion-dollar spending bills through Congress as soon as possible. It also makes paying out already approved pandemic aid more urgent: Nearly 90 percent of a $46.5 billion rental aid program for people facing eviction has yet to be distributed.

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Google and Microsoft will invest at least $30 billion to bolster U.S. cybersecurity defenses. The pledges came after 20 executives of major tech companies met for a cybersecurity summit yesterday at the White House. The Biden administration estimates a half-million jobs in the field are currently unfilled, a major challenge to countering hacks and ransomware attacks.

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Understand Vaccine and Mask Mandates in the U.S.

    • Vaccine rules. On Aug. 23, the Food and Drug Administration granted full approval to Pfizer-BioNTech’s coronavirus vaccine for people 16 and up, paving the way for an increase in mandates in both the public and private sectors. Private companies have been increasingly mandating vaccines for employees. Such mandates are legally allowed and have been upheld in court challenges.
    • Mask rules. The Centers for Disease Control and Prevention in July recommended that all Americans, regardless of vaccination status, wear masks in indoor public places within areas experiencing outbreaks, a reversal of the guidance it offered in May. See where the C.D.C. guidance would apply, and where states have instituted their own mask policies. The battle over masks has become contentious in some states, with some local leaders defying state bans.
    • College and universities. More than 400 colleges and universities are requiring students to be vaccinated against Covid-19. Almost all are in states that voted for President Biden.
    • Schools. Both California and New York City have introduced vaccine mandates for education staff. A survey released in August found that many American parents of school-age children are opposed to mandated vaccines for students, but were more supportive of mask mandates for students, teachers and staff members who do not have their shots.  
    • Hospitals and medical centers. Many hospitals and major health systems are requiring employees to get a Covid-19 vaccine, citing rising caseloads fueled by the Delta variant and stubbornly low vaccination rates in their communities, even within their work force.
    • New York City. Proof of vaccination is required of workers and customers for indoor dining, gyms, performances and other indoor situations, although enforcement does not begin until Sept. 13. Teachers and other education workers in the city’s vast school system will need to have at least one vaccine dose by Sept. 27, without the option of weekly testing. City hospital workers must also get a vaccine or be subjected to weekly testing. Similar rules are in place for New York State employees.
    • At the federal level. The Pentagon announced that it would seek to make coronavirus vaccinations mandatory for the country’s 1.3 million active-duty troops “no later” than the middle of September. President Biden announced that all civilian federal employees would have to be vaccinated against the coronavirus or submit to regular testing, social distancing, mask requirements and restrictions on most travel.

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