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Employers are beginning to tack on a special surcharge of $20 to $50 a month to their unvaccinated workers, according to one of the nation’s largest health benefits consultancies.
To date, employers have offered gift cards, a day off from work, cash and other financial incentives to convince their workers to get vaccinated against Covid-19.
But the carrot approach is about to be joined by a stick that could cost employees up to $50 a month, according to Mercer, the large employee benefits consultancy that works with thousands of employers around the world.
“Employers have tried encouraging employees to get vaccinated through offering incentives like paid time off and cash, but with the Delta variant driving up infections and hospitalizations throughout the country – at the same time that vaccination rates have stalled – we have received inquiries from at least 20 employers over the past few weeks who are giving consideration to adding health coverage surcharges for the unvaccinated as a way to drive up vaccination rates in their workforce,” said Wade Symons, Mercer’s regulatory resources group leader.
Mercer isn’t disclosing the names of companies working on the surcharges but said the amount of the surcharge being discussed with these employers is akin to the $20 to $50 a month charges companies already charge workers who smoke.
Aside from a public health reason to encourage vaccination and keep workers and their families healthy, there is also a financial reason. Covid-19 can lead to serious illness and an expensive hospital stay that costs the worker and company-paid insurance, triggering premium increases as well.
An essay in last week’s New York Times outlined several examples of how Covid-19 can lead to higher costs and health insurance premiums from the unvaccinated. “Getting hospitalized with Covid-19 in the United States typically generates huge bills,” Dr. Elisabeth Rosenthal and Stanford University’s Glenn Kramon wrote, citing examples that included “a $104,000 bill for a 14-day hospitalization in Miami for an uninsured person.”
Though premium surcharges are only beginning to be considered, financial incentives are already being used by some employers. Mercer data from a survey in the last month of more than 300 employers shows “only 10% provide a financial incentive, although 19% offer extra paid time off as a reward,” Mercer said in a statement. “Some employers are now offering additional time off so employees can assist with their children’s vaccinations.”
Benefits consultants see the push by employers to get their workers vaccinated is only intensifying as employees return to the office after 18 months of working remotely.
“This past week a few big names, including Google and Facebook, announced plans to require all employees to get vaccinated for COVID-19 before returning to the office,” Mercer’s Symons wrote in a column last week on the benefits firm’s website. “And, while many employers are willing to take additional measures to increase vaccine levels, most employers continue to hold off on mandates because of potential employee relations issues that such a move might provoke. Now, with the Delta variant driving up infections and hospitalizations throughout the country – at the same time that vaccination rates have stalled – health coverage surcharges for the unvaccinated are a tactic employers are reviewing as an alternative to a mandate.”
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