Employers’ COVID vaccine mandates likely to gain traction, surveys show

As U.S. regulatory approval of Pfizer’s COVID-19 shot paves the way for companies to get more aggressive with inoculations, American workers are increasingly supportive of punitive measures for unvaccinated colleagues.

A survey released Tuesday by human resources consultant Eagle Hill showed that 41% of workers polled agreed that unvaccinated employees should pay higher insurance rates. Almost two-thirds said the unvaccinated shouldn’t get special allowances to work from home. A separate poll of employers found that the share of those imposing vaccine mandates or planning to do so in some way has more than doubled since the start of the year.

The rapid spread of the Delta variant has disrupted plans to get workers back to the office and spurred companies such as Facebook, Citigroup and Walt Disney Co. to impose vaccine requirements for employees. President Biden on Monday called for more corporate mandates and is counting on the Pfizer approval to help ease hesitancy among vaccine holdouts. Yet there remains a broad swath of people who may be unmoved without other measures.

“We have reached the point where employers might be at 80% vaccinated, but it’s just not moving higher,” said Wade Symons, the national leader of the regulatory resources group at human resources consultant Mercer. “So how do we get that number higher?”

Employers are increasingly moving beyond monetary rewards such as the $100 that Kroger Co. and others give to those getting jabbed, according to the second survey, from employment law firm Littler Mendelson PC. Such approaches offer a middle ground from a full vaccine mandate, which could hurt morale and lead to staff defections at a time of shortages in the labor market.

More aggressive options include levying surcharges on healthcare premiums, as some companies already do for smokers, or denying free coffee, fitness rooms or other perks to the unvaccinated, according to human resources consultants. Some employers are even rearranging office layouts to give more desirable real estate to vaccinated workers.

“Giving people money to get the vaccine does not work as well as companies would like,” said Brian Kropp, chief of human resources research at consultant Gartner. “So there are a lot of other things that companies are exploring.”

One is the healthcare surcharge, which has become a “hot topic of conversation,” according to Mercer’s Symons. “It might move the needle if employees know that if they are not vaccinated, it will come out of their paycheck.”

Levying an additional charge of, say, $25 or $50 a month onto the premiums that workers already pay for health coverage is legal, and one-quarter of plan sponsors with 500 or more employees already do so for employees who use tobacco, according to Mercer. There are some regulatory hurdles to clear, especially if the company administers its own employee vaccination program, and accommodations must be made for those unable to get the shot due to a disability or religious beliefs.

Once those compliance issues are dealt with, surcharges could be imposed immediately. Symons said most companies might wait until January, when new benefit plans typically kick in.

Different paths

So far, corporate America has taken diverging paths when it comes to vaccine rules, with disparities even within the same industry.

Morgan Stanley, for instance, requires shots for workers to enter its New York-area buildings, while JPMorgan Chase has imposed some limits on unvaccinated employees while stopping short of requiring inoculations. United Airlines has said workers must get vaccinated; other major carriers have not.

The Pfizer vaccine’s approval is expected to trigger more requirements among many large employers, universities and local governments. The two-dose regimen has become the most widely used of three available vaccines, according to data from the Centers for Disease Control and Prevention, with more than 92 million people having received two shots. Still, about 3 in 10 U.S. residents eligible for immunization haven’t gotten any shot.

Beyond surcharges, companies are even starting to think about refusing to cover some or all of the healthcare costs accrued by unvaccinated employees who contract COVID-19, Symons said. Such a move carries additional risks and regulatory hurdles, particularly around preexisting health conditions, not to mention the message it would send to rank-and-file staff.

“A surcharge is completely legal and fine,” Gartner’s Kropp said. “But not paying for healthcare costs, you run the risk of the employee gaining the perception that their employer does not care about them. It raises the question, do they have my back, or not?”

Jeff Green contributed to this report.