Talk About Bruno . . . Health Plan Premium Surcharges & Vaccination Status

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Holland & Hart - The Benefits Dial

Last week, the US Supreme Court blocked the OSHA standard requiring private employers with 100 employees or more to vaccinate-or-test for COVID-19 from taking effect (more info here). With the fate of that standard likely sealed, employers may soon give thought to other strategies to incentivize workers to become vaccinated and/or boosted. Employers with self-funded health plans might consider charging unvaccinated (or unboosted) workers a higher premium for that health coverage. Or perhaps, it would be more appropriate to say “reconsider” that approach.   

Before the OSHA standard was announced, many employers were looking to do something to encourage workers to become vaccinated. Those employers looking at health plan premium surcharges mostly dropped that strategy once the OSHA standard was released. Will interest in this strategy resurface?   

Employers that consider this strategy should be mindful that designing this arrangement correctly requires the employer to thread the needle through a tapestry of laws (HIPAA nondiscrimination rules, GINA, the ADA, Title VII, and potentially, local/state law restrictions). This is workable, but employers should understand the impact of those laws before moving forward – so please, talk about Bruno. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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