ebr logo bar
December 2021   Volume 19, Number 12        
 

vaccinated woman giving thumbs up

How to Legally Use Premium Discounts to Encourage Vaccinations

Three federal agencies have issued guidance indicating that employers may legally offer a reduced health benefit premium to employees who are vaccinated for COVID-19.

However, employers must comply with federal wellness program regulations. The Departments of Labor, Health and Human Services, and Treasury addressed the issue in a Frequently Asked Questions (FAQs) document. The FAQ explains that since wellness programs are designed to promote health or prevent disease, they are allowed to offer a reward for completing an activity related to health. Therefore, a premium discount that requires an individual to perform or complete an activity, such as obtaining a COVID-19 vaccination, would be considered part of a wellness program.

However, the reward can’t exceed 30 percent of the total cost of employee-only coverage, and the plan can require that participants qualify annually for this premium discount.

In addition, employers must provide a reasonable alternative for certain employees who find it unreasonably difficult to get the vaccine to qualify for the discount. According to the FAQ, employees who would qualify for a waiver would include those who have certain medical conditions or for whom it is medically inadvisable to obtain the COVID-19 vaccination. For instance, the plan could mandate that the employee complies with the CDC’s mask guidelines for unvaccinated individuals.

The plan also must maintain a toll-free hotline to provide information to employees about the COVID-19 vaccine. The hotline also must include information about how to receive a COVID-19 vaccination or how to fulfill the requirements for the alternative.

What an employer offering a plan can’t do is discriminate against participants, beneficiaries and enrollees in determining eligibility for benefits or coverage based on getting the vaccination.

Also, employers may not deny employee benefits coverage based on whether an employee obtained a COVID-19 vaccination.

[return to top]


 

 

 

 

In this issue:

This Just In

How the Pandemic Is Making Employer-Sponsored Life Insurance More Attractive

How to Make Annuities Work with 401(k)s

Voluntary Benefits That Could Move the Needle for Employees in 2022

How to Legally Use Premium Discounts to Encourage Vaccinations

 

 


The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher's permission. All rights reserved. ©2021 The Insurance 411. https://theinsurance411.com Tel. 877-762-7877.