Employee health benefits are about to get more expensive at companies that assess surcharges for coverage of unvaccinated spouses or domestic partners.
Ochsner Health System in Luling, Louisiana, recently announced that it would charging workers $200 per month next year for spouses and partners who aren't vaccinated against COVID-19. The not-for-profit company characterizes it as a "cost adjustment" to help cover the costs of COVID-19 treatment. The health system also announced a vaccine mandate for employees in August with an Oct. 29 deadline.
Ochsner President and CEO Warner Thomas said the system has spent more than $9 million on COVID-19 care for employees and dependents in the past year. Of those hospitalized after vaccines became available in December, about 90% were unvaccinated, he said.
"This fee is similar to what's been in place for tobacco users and is in line with the benefits offered by many healthcare organizations and companies," Thomas said in a statement. "As a self-insured organization, we work hard every year to keep our health premiums low for our employees and their families. The reality is the cost of treating COVID-19, particularly for patients requiring intensive inpatient care, is expensive."
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Similar to the employee vaccine requirement, spouses and partners are eligible for medical and religious exemptions, Thomas said.
Other self-insured employers are looking into similar surcharges as vaccine mandates roll out for healthcare workers and employees at large companies following President Joe Biden's announcement that firms with more than 100 workers must get everyone immunized, said Wade Symons, leader of Mercer's regulatory resources group. More companies are eying surcharges for unvaccinated employees than for their spouses and partners, however, he said.
"Anybody on the plan, whether it's the spouse or the employee, if they're unvaccinated, they have the potential to increase costs," Symons said. "We know spouses can cost self-insured plan sponsors just as much, if not more, than employees."
The Employee Benefit Research Institute estimates that spouses typically cost more than $1,000 more than employees to cover, and some companies choose not to cover spouses or assess fees if spouses select coverage if other options are available.
While the idea of charging spouses more for choosing not to be vaccinated is new, "it makes sense, especially in Louisiana where vaccination rates are pretty low," said Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation.
"The probability that a spouse or domestic partner is unvaccinated is probably higher than average. It makes sense because a domestic partner or spouse that is hospitalized will add to costs just as much as an employee if they are covered under the plan," Hempstead said.
The Kaiser Family Foundation estimates that 287,000 unvaccinated Americans hospitalized from June through August cost the U.S. healthcare system $5.7 billion.
Incentives and mandates "seem to be having the desired effect" in encouraging people to get vaccinated. Hempstead said.
Delta Airlines led the way in using insurance fees to encourage employee vaccination. In August, Delta announced it would begin charging unvaccinated employees $200 per month starting in November to help alleviate costs of care on the company. Delta CEO Ed Bastian said the average cost to the company per hospitalization was $50,000, and that all Delta workers who had recently been hospitalized with COVID-19 had been unvaccinated.
In the three weeks after the fees were announced, the vaccination rate at the company rose from 75% to 82%, Delta Chief Health Officer Dr. Henry Ting told CNN. United Airlines opted instead for an employee vaccine mandate and achieved better results: Its vaccination rate hit 99% last month, not counting workers who qualified for exemptions.
