Incentivizing COVID-19 Vaccination at the Workplace

As COVID-19 vaccines become more available, employers may want to consider their options with respect to incentivizing employees to get the shot(s).  And as is usually the case in the world of employee benefits, employers need to proceed with caution and care as they ruminate on this matter.

While on the surface, it may sound like a good idea to embed an incentive for COVID-19 vaccine within the context of a Wellness Program; this might not be the best strategy.  There is a pending court case involving the U.S. Equal Employment Opportunity Commission (EEOC) and the AARP (since 2017) that leaves the fate of incentive based wellness programs in the balance.  See – https://smstevensandassociates.com/wellness-program-alert-2/  Earlier this year (2021) the EEOC proposed new rules in the interest of clarifying the scope of incentives employers may use to encourage program participation.  At the heart of the matter are two familiar employee welfare benefit plan laws – Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).  In its lawsuit against the EEOC, AARP asserted that within the process of employers obtaining necessary health related information related to wellness programs, ADA and/or GINA protections might be breached.  Stay tuned as the courts may resolve this case sometime this year (2021). Currently the proposed EEOC rules are in their 60 day public comment period.

According to a recent poll conducted by payroll/human resource management company – Paychex – 79% of employers (10-500 employees) plan to encourage employees to be vaccinated.  So, here are some important COVID-19 vaccine incentive considerations:

• – If a Wellness program is used, keep in mind the Affordable Care Act (ACA)/HIPAA limits on premium incentives (i.e., 30% differentiation), and both ADA and GINA limitations, mentioned above.
• – Gift/Debit cards and cash are an option but if considered as income, are subject to taxation.  Also, keep in mind the impact of additional “compensation” on 401(k) matching.
• – Paid time off is another incentive option.
• – Review payroll systems/vendors for incentive capabilities.
• – For employees that object to the vaccine (e.g., due to: disability, medical condition, religious beliefs), consider an alternative standard or accommodation, depending on how the incentive is designed, and the impact of having non-vaccinated employees at the workplace.
• – Decide whether the incentive is offered/available to all employees, or only select class(es) of employees.  If the latter, make sure the class types are non-discriminatory.
• – Self funded employers may want to weigh the cost and benefits of incentivizing the vaccine, as the cost of administering the vaccine is born by the employer.
• – If offering/providing an incentive, employers will need to verify that vaccines were in fact administered.  Currently, vaccinated individuals are provided with a card showing they received the shot(s).  (Note – these Centers for Disease Control and Prevention (CDC) issued cards do not currently include medical information, according to EEOC guidance).  If other forms of proof are required, once again, there are ADA and GINA considerations.  EEOC guidance on providing proof of vaccination, outside of the CDC issued cards, should be forthcoming.
• – Record keeping – employers need to make sure the information related to vaccinations is stored in a secure, HIPAA compliant location, accessible only by HIPAA authorized employee(s).

Importantly, employers should consider the option of waiting for the current, “emergency use authorization” approval level, to advance to final approval by the FDA, before making the vaccine mandatory at the work place.

Stay tuned for both the (hopeful) resolution of the AARP/EEOC court case affecting incentive based wellness programs; and forthcoming EEOC guidance on incenting vaccinations.

UPDATE: Both the EEOC and CDC has issued guidance regarding mandating COVID-19 vaccinations at the workplace.  Here is a link to the CDC’s guidance –     https://www.cdc.gov/coronavirus/2019-ncov/vaccines/recommendations/essentialworker/workplace-vaccination-program.html

June 4, 2021 UPDATE: The EEOC added new FAQ’s pertaining to the topic at hand.  See – https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws

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