Benefit Premium Surcharges For Unvaccinated Employees – When The Carrot Isn't Enough

Employers have been trying to encourage employees to get vaccinated against COVID-19. Some employers paid bonuses. Others provided gift cards. What happens when rewards are not enough? A US employer recently announced a different approach: all unvaccinated employees enrolled in the company's healthcare plan will be subject to a $200 monthly surcharge, starting November 1, 2021. In deciding to implement the new surcharge, the employer pointed to the fact that all of its employees who were hospitalized with COVID-19 were not fully vaccinated. The average hospital stay for those employees cost the employer $50,000 per person.

The health care situation may be different in Canada, but some are already asking if they can follow suit in Canada and increase health benefit premiums for unvaccinated employees. This bulletin outlines a number of things to consider before making that decision.