Comply With Us

Friendly Advice on Handling Workforce COVID-19 Vaccination Policies

November 3, 2021

Friends, we’ve been thinking a lot about vaccines lately.  We were both thrilled to get our own COVID-19 shots last winter, and we are dreaming of when doses and boosters are readily available to all adults who need them worldwide, and the CDC finally grants full permission to vaccinate kids ages 5-11.  We’ve both got 11-year-olds, and we both know how to give injections.  So, we’d be lying if we didn’t admit that there have been days when we’ve fantasized about breaking into a Rite Aid and jabbing their not-so-little arms ourselves!  

Besides the personal reasons to be a bit vaccine-obsessed, we are also answering vaccination-related questions at work—both about vaccine mandates and workplace-based incentives to get employees and their family members vaccinated.  As you might have noticed, the Biden Administration recently published several pieces of sub-regulatory guidance about employers and the COVID-19 vaccine. They include DOL guidance on how employer plans must treat vaccinations in the context of group health insurance plans, EEOC FAQs about how the Americans With Disabilities Act (ACA) and the Genetic Information Nondiscrimination Act (GINA) affect employer-based efforts to vaccinate the workforce, and HHS guidance covering common misconceptions about the applicability of the HIPAA privacy rule to vaccine and masking requirements.  We are also still waiting for rules outlining the employer aspect of President Biden’s vaccine proposal, but we’ve heard they are coming soon!

While all this new information is helpful, it can be confusing too. Many employers are wondering what to do.  Luckily, we can be bossy friends.  We would apologize for this obnoxious tendency, but in all modesty, we’re very good at solving other people’s problems, particularly those of a compliance-related nature.  So, we want to share what we would do about vaccinations, should we own businesses that meet the following fictional profiles.

Scenario 1:

Healthcare Employer With The Ability To Vaccinate Its Employees Onsite Without Involving Another Business Entity

In our opinion, this type of business is a prime candidate to 1) offer to vaccinate/give boosters to employees and their loved ones on site; 2) impose a vaccine mandate on its workforce (including appropriate reasonable alternatives for those with legitimate religious and/or medical concerns, rather than trying to justify a business reason for forgoing vaccination alternatives); and 3) forgo providing any incentives to employees to get jabbed (other than the convenience of getting their shots at work and meeting the terms of the conditions of their employment).  

Here’s why.  First, employers like this probably already impose other vaccine and/or medical testing requirements on their workforce.  It’s fairly normal for hospital employees to be required to get a flu shot or a TB test.  Also, most entities that meet this description have provided employees with access to the COVID-19 vaccination for months. Their workforces often have first-hand knowledge about the benefits of vaccination. This type of employer will have to impose a workforce vaccination mandate anyway when the Biden Administration publishes its workforce vaccination rules, so doing it early and on their own terms makes sense.  We would not try to claim undue hardship on business operations to try and get out of providing people with reasonable vaccination alternatives. It’s legally tricky, and the requirements a business needs to meet are different for religious objections instead of medical. Plus, it just seems mean. This type of business is also very familiar with privacy requirements, so it won’t be a big lift to keep employee vaccination records securely stored away from other employment records.

Finally, while it might seem harsh for this kind of employer to not offer their employees any financial incentives to get vaccinated, doing so allows the business to avoid the ADA rules that apply to employers who provide vaccinations to their employees directly at the worksite.  If an employer or its agent is the one who provides the vaccine, then any vaccination incentive cannot be so high as to be considered “coercive.” Since we have no idea what a “coercive” level of incentive to get vaccinated against COVID-19 is, and we don’t know anyone else who does either, our thought is to avoid a faulty guess and skip offering an incentive altogether.  

Scenario 2:

Employer with at least 100 Employees Who Has No Ability to Vaccinate Its Employees Onsite Without Hiring Some Other Entity To Help

If we were you, we would put in a vaccine mandate with reasonable alternatives for employees who have legitimate religious and/or medical objections. This type of company will be subject to the coming large employer vaccination mandate requirement, so might as well start planning for it now. What we would NOT do is offer to vaccinate anyone at work.  Companies with this profile would have to hire someone to come in and provide the shots.  Not only does that cost money and time, but also when an employer or its agent administers a COVID-19 vaccine, the value of any employee vaccination incentive (which includes both rewards and penalties) may not be so substantial as to be coercive. Since we like rewards, and we don’t like finding someone to come in and give shots amongst vague coercion standards, we say skit the on-site shot clinic. Instead, we would hand out all kinds of resources to employees to help them find vaccination sites themselves. We would also build or buy a system where employees could securely submit proof of vaccination, making sure that the system keeps the data protected and private and entirely separate from other employee personnel records.  

If we were feeling particularly ambitious and generous (which personally we typically are), we’d think about offering a health insurance premium incentive to vaccinated employees.  The reason why we’d need to think about it is, while a business can avoid the ADA coercive penalty rules by not administering the vaccine to employees directly, if the employer is subject to the ACA’s employer shared responsibility requirements (employer mandate), then they need to take into consideration how vaccination incentives are linked to the ACA’s affordability requirements. 

Now, it is perfectly legal for group health plans to try and incentivize employee plan participants to get vaccinated. When they do so, they create a health-contingent wellness program subject to all wellness program rules. These rules cap the value of any reward or penalty (including but not limited to the reward or penalty for vaccination) at 30% of the total annual cost of coverage. They also require informing all participants about the availability of a reasonable alternative.  If an individual’s premium contribution is reduced as part of a COVID-19 vaccination wellness program, then the reduction is disregarded for purposes of determining whether the offer of that coverage is affordable for purposes of assessing liability for the employer shared responsibility payment. Conversely, if an individual’s premium contribution for health coverage goes up because they are not vaccinated, then that surcharge counts when determining if their coverage is “affordable” under the ACA’s employer mandate. So, by offering a vaccination premium incentive, rather than imposing a premium surcharge, it is easier to achieve “affordability.”  When setting up the incentive program, we would be sure to follow the federal wellness program rules, and provide a reasonable alternative to any employees for whom vaccination would be “unreasonably difficult due to a medical condition or medically inadvisability.”  

Scenario 3:

Employer with Somewhere Between 50-100 Employees Who Has No Ability To Vaccinate Its Employees Onsite Without Hiring Some Other Entity To Help

If we owned a company of size and with these resources, we would think hard about whether or not to impose a vaccination mandate.  Most companies like this will not need to follow the federal employee vaccination mandate, so we would advise taking into consideration workplace dynamics, employee locations, public-facing exposure, and other employee safety risk factors before deciding.  Just like other businesses that do not have the capability of providing vaccinations themselves, we would caution against offering a COVID-19 vaccination clinic at work, due to potential ADA issues.  

Additionally, we know some businesses in this size range are considering adding a surcharge to the health insurance premiums of any employee who will not attest to being vaccinated.  Such premium surcharges are legal, but they are also tricky to implement, as we discussed in Scenario 2 above. 

Since wellness program incentives and penalties are linked to the ACA’s affordability requirements, if an individual’s premium contribution for health coverage goes up because they are not vaccinated, then that surcharge counts when determining if their coverage is “affordable.” So, an employer who imposes a no-vaccine surcharge might pay for it later if they do not structure it correctly on the front end.  We would suggest giving employees a premium discount if they can provide proof of vaccination or of meeting a “reasonable alternative” standard (such as submitting to weekly COVID-19 testing and always wearing a mask at work).  No matter what choice this type of employer makes, they need to keep any vaccination or COVID-19 testing information they collect about employees secure and private, storing it separately from all other employee personnel files.

Scenario 4

Small Employer Worrying About Keeping the Doors Open and Lights On, Let Alone Vaccinating People At Work 

This is the business profile most like the one we own/work for, and we don’t have a vaccination mandate in place here at MZQ. Employers and employees at businesses this size range know a lot about one another. So, we know at our workplace, a mandate is not necessary. If we needed to encourage our workforce to get vaccinated, we would provide all kinds of resources about where employees and their loved ones could get jabbed.  

As in Scenarios 2 & 3, these employers could also introduce an incentive-based wellness program.  This kind of company typically does not have to worry about the ACA’s coverage “affordability” penalties—but all the other challenges outlined above still apply.  Personally, we’d still go with an incentive-based program because we prefer giving presents over punishment (except when it comes to sassy tween and teenage children).  Just like any other business that collects vaccination information about employees, these companies should be mindful of the ADA requirement that requires an employer to maintain the confidentiality of employee medical information and store it separately from the employee’s personnel files.

Scenario 5

Business Located in Florida, Texas or Other Red State with A Governor, Legislature and/or Attorney General Itching to Go Before the Supreme Court of the United States 

If you are a large employer or a government-contractor in a state where policymakers plan to (or already have) banned private employer-mandated vaccinations, you have our sympathies.  No matter what you do, there’s the potential of running afoul of a state or federal requirement.  If you are a fan of Article VI, paragraph two of the United States Constitution, then follow whichever scenario above matches your business best.  If you do not want to risk state-level consequences for requiring vaccinations, we understand and suggest incenting employees as an alternative.  We also wouldn’t blame you if you want to stick your head in the sand on one of the many Caribbean islands currently letting American tourists back in to visit again.  Saint Lucia is very nice this time of year.

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We hope you find this unsolicited advice helpful, friends.  We are fully expecting the Biden Administration’s vaccine rules to become public later this week, probably on Thursday, because that’s Jen’s 15th wedding anniversary.  But never fear, we are a team and Jess will be back with thoughts about how the new rules will affect employers and health policy nerds everywhere as soon as we have more details.  Until then, be careful out there!