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Refreshing Insights

Widespread U.S. availability of the COVID-19 vaccine is expected this year, and a majority (71 percent) of Americans have said they will get the shots, according to a survey from the Kaiser Family Foundation.

There remains, however, some hesitation from sectors of the population, which has had some employers wondering if they can mandate employees receive the vaccine before returning to the workplace.

Many employers have put additional safety mechanisms in place for the pandemic and already require masking and social distancing in the workplace, so it isn’t unreasonable to ask if a vaccine mandate is the next step.

For some industries and environments, it doesn’t raise much controversy (healthcare and first responders, for example), but for other organizations it might feel more like a giant leap into a minefield of possible risks, including conflict with anti-discrimination laws, impacts on the employee health plan, and general effects on employee relations.

That doesn’t mean, however, that you shouldn’t act. It just means you will need to tread carefully as you move forward with your ongoing COVID-19 strategy. Here are some of the potential complications your plan should address.

Anti-Discrimination Laws

The Equal Employment Opportunity Commission (EEOC) recently issued guidance about vaccination, explaining “[Equal Opportunity] EO laws do not interfere with or prevent employers from following CDC or other federal, state, and local public health authorities’ guidelines and suggestions.”

Which might sound like carte blanche to mandate vaccination until you read the following 30 pages of provisions, considerations and exceptions.

There are really two different questions at play here:

  1. Can you mandate that employees receive the vaccination? Short answer – Yes.
  2. Can you enforce your mandate by barring employees from the workplace—or separating employment—if employees refuse? Short answer – It’s complicated.

There are a number of EO laws and provisions that could apply to this situation (namely Title VII, the ADA, and GINA) that would make it unlawful for you to enforce your mandate without first engaging in the interactive process to identify workplace accommodations in lieu of removing the employee from the workplace.

You should exercise caution when developing and implementing mandatory COVID-19 vaccine policies. You will need to be well-versed in the nuances of anti-discrimination law and you will want to make sure your direct supervisors are trained to recognize situations that merit an exception to your rules and may require accommodation.

Impacts on Health Plan

Now that more people have started to receive the vaccine, we have started to see some interesting things from a claims processing standpoint. Essentially, there are two pieces to a claim for the vaccine:

  • The cost of the vaccine itself.
  • The cost to administer the vaccine.

Under the CARES Act, health plans are required to cover all the costs of the vaccine, wherever it is administered, even if it is administered by an out-of-network provider.

The cost to administer the vaccine can vary greatly from provider to provider and facility to facility (we have seen anywhere from $15 to $106 per vaccine, and the second dose typically costs more to administer than the first).

When claims are processed at an in-network level, the health plan is insulated from this kind of price variance, resulting in lower costs for administering the shot. This is not the case with out-of-network claims, making it more costly for employees to receive the vaccine from out-of-network providers.

If all employees are required to get the vaccine, the cost of administering it goes up. If more employees see out-of-network providers for the vaccine—the cost can go up significantly.

You can reduce plan costs by explaining the two-part claim to plan participants so they can seek care at their primary care physician, a local pharmacy or a pop-up vaccination site (where available).

As the vaccine becomes more readily available, some employers may want to control the cost of administering the vaccine by bringing it “in house” and contracting with a provider for an onsite clinic. (Many larger employers do this for flu shots.)

While this can be a cost savings, it also triggers provisions under EO laws. For example, under the ADA, employers may not ask questions about medical conditions unless the questions are “job-related and consistent with business necessity.”

This is relevant because health care providers are required to ask certain pre-screening questions before administering the vaccine to ensure there is no medical reason it shouldn’t be given.

If the vaccine is mandatory and administered by the employer or a third-party contracted by the employer, these questions must meet the ADA standard.

To meet this standard, an employer needs to have a reasonable belief, based on objective evidence, that an employee who does not answer the questions and, therefore, does not receive vaccination, will pose a direct threat to the health or safety of herself/himself or others. Objective evidence of a direct threat will be easier to show in some circumstances than others.

If, on the other hand, the vaccine is provided on a voluntary basis, the employee is free to refuse it without explanation. If the employee chooses to disclose medical information to obtain the vaccine, you are only responsible for maintaining the confidentiality of that information and ensuring it is not used in adverse employment decisions.

Employee Relations

Aside from the practical challenges of enforcing mandatory vaccination, there are the ramifications such a policy has on employee morale, culture and trust between the employer and employee. The simple fact is that workers don’t want to be forced to comply with a policy that they feel interferes with their personal choice.

More than half of essential workers say employers should not require employees to be vaccinated before returning to in-person work, according to a survey by analytics platform Perceptyx. More than 40 percent of workers say they would consider leaving their jobs if they were required to be vaccinated.

That’s a lot of institutional knowledge on the line, not to mention the high costs of employee turnover (even in a market with high unemployment). Which is why several high-profile employers have announced that they will offer incentives for their employees to voluntarily get vaccinated.

Incentives are, of course, not without their own complications. The EEOC Jan. 7 announced new proposed changes to its wellness program regulations that employers will want to keep in mind, but general adherence to anti-discrimination laws (and providing incentives that don’t break the bank), should keep most employers compliant with current law.

So, while it might be tempting to demand that all employees get vaccinated, you are likely to have greater success in inoculating more employees by giving them a choice. Spend less time focused on protecting your organization from the risks inherent in a mandate and more time educating employees on the merits of vaccination, helping them find easy access to less-costly providers and offering a small incentive.

Have More Questions? We Can Help!

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