Delta Air Line’s CEO Ed Bastian wrote a memo to his employees outlining his tough approach towards unvaccinated workers.
Bastian said in the blog post “Since the earliest days of the pandemic, our No. 1 priority has always been to protect our people and customers,” and “Today I’m pleased to announce that we’ve reached the milestone of 75% of our people vaccinated, which puts us one step closer to getting back to what we do best – connecting the world and running the best airline on the planet.”
He then laid out his plans:
- Effective immediately, unvaccinated employees are required to wear masks in all indoor Delta settings. This requirement will remain in place until community case rates stabilize.
- Starting Sept. 12, any U.S. employee who is not fully vaccinated will be required to take a COVID test each week while community case rates are high. Those with a positive result will need to isolate and remain out of the workplace.
- Beginning Nov. 1, unvaccinated employees enrolled in Delta’s account-based healthcare plan will be subject to a $200 monthly surcharge [emphasis placed by the author].
- The average hospital stay for COVID-19 has cost Delta $50,000 per person. This surcharge will be necessary to address the financial risk the decision to not vaccinate is creating for our company. In recent weeks since the rise of the B.1.617.2 variant, all Delta employees who have been hospitalized with COVID were not fully vaccinated.
- Effective Sept. 30, in compliance with state and local laws, COVID pay protection will only be provided to fully vaccinated individuals who are experiencing a breakthrough infection.
Delta’s plans are in line with many media outlets, private companies and public entities. Their collective logic is that since the FDA approved Pfizer’s vaccine, workers who were hesitant about getting their shots should now get vaccinated. They’ve also called for making the lives of the unvaccinated difficult in an effort to nudge them towards getting inoculated.
The airline industry’s business model is highly susceptible to the disease. Their passengers sit tightly together in a confined space for long periods of time. If potential travelers are concerned about contracting and spreading the disease, they’ll balk on booking a trip. Business people will elect to hold an online Zoom meeting instead of flying out to meet a client if there is a serious health risk. Some airliners have already reported revenue is trending lower than forecasts, an increase in cancellations and profit warnings attributed to the sudden surge of the Delta variant.
Healthcare and hospital costs are a big exorbitant issue too. The extra monthly surcharge is needed to defray the expenses of enhanced insurance bills, Bastian contends. The airliner points out the hospital charges could run to $40,000.00 or higher for covid-19 patients.
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The rate of people catching the virus has been rapidly growing. U.S. COVID-19 hospitalizations hit 100,000 to mark the highest level since January. CBS News reported that “Health insurance providers are now asking people who contract the disease to share the cost of treatment, which can get expensive if it requires a lengthy hospital stay.”
An analysis by the Kaiser Family Foundation found that “In November 2020, nearly 90% of insured individuals would have had their out-of-pocket costs — including copays, coinsurance or payments toward a deductible — waived if they had been hospitalized for COVID-19.” Now it’s different. According to CBS News, “Early in the pandemic, most private insurers waived cost-sharing for patients under their plans or even covered the full cost of treatment,” now that the FDA has approved a vaccine and “effective coronavirus vaccines widely available, most insurers are no longer waiving those costs.”
Once again costs come into play. By helping out with the hospital costs, it has a backfiring effect. The financial aid is actually a disincentive for the vaccine holdouts to get their jabs. Now that it will come out of their pockets, non-vaccinated people may reconsider their stance.
In a Yahoo Finance Live interview with Marty Mucci, the CEO of giant payroll and human resources company Paychex, he said business clients are “actively discussing whether to change their health care premiums, offering different versions for those people who are unvaccinated.” He’s also “debating” this for Paychex “We are looking at it because the cost is very high. You can talk about whether to mandate the vaccinations or not for your employees. You need to be able to say there are consequences. There are costs that come with not being vaccinated” he said.
Mucci pointed to Delta’s decision “I think Delta made the comment that the average hospital stay for someone not vaccinated is like $50,000. You don’t want to spread that to all of your employees. So you have to find ways — just like smoking and non-smoking — ways to try to get the possible cost as fair as you can to your employees to keep your rates down for health insurance.”
There are other issues that need to be considered in addition to dollars and cents. Right now businesses are in a brutal war for talent. The U.S. boasts a record 10.1 million job openings. With the ‘Great Resignation’ it’s hard for companies to find, hire and retain workers. Requiring mandatory vaccinations, mask-wearing or forcing workers to pay higher premiums if they’re unvaccinated, may make it harder to entice people to join their firms or keep current employees.
The extra $200.00 costs levied on the unvaxxed could lead to unintended consequences. If this practice takes hold across a wide array of companies, insurance firms may start to look at other actions that should require enhanced charges. How soon could insurance carriers start saying that being ‘morbidly obese’ is a known risk for Covid-19, and therefore overweight workers must be assessed an enhanced charge to their monthly paychecks. Companies and insurers could claim that workers who don’t eat healthily, binge on junk food, lead a non-active sedentary life, smoke, take drugs, drink alcohol, or engage in certain risky behaviors need to be assessed with higher medical contributions.
Another concern is that Delta’s surcharge could disproportionately impact some minority groups. The CDC reports demographic characteristics, including race/ethnicity, of people receiving COVID-19 vaccinations in the U.S. As of August 16, 2021, the “CDC reported that race/ethnicity was known for 58% of people who had received at least one dose of the vaccine. Among this group, nearly two thirds were White (58%), 10% were Black, 17% were Hispanic, 6% were Asian, 1% were American Indian or Alaska Native, and <1% were Native Hawaiian or Other Pacific Islander, while 8% reported multiple or other race.”
Since Blacks and Hispanic are less likely to have their vaccination shots, according to the CDC, these groups will be overrepresented in paying the extra $200.00 surcharge.
The Society for Human Resource Management (SHRM), which represents one, if not the largest, membership group of human resources professionals, weighed in on the topic. In a piece posted on their site, SHRM wrote “Since the passage of HIPAA in 1996, insurers may not discriminate against individuals for plan eligibility, premiums or coverage based on a health-related factor.”
The article said “The passage of the Affordable Care Act (ACA) in 2009 went even further: Insurers cannot vary premiums based on health status, gender, race or disability, among other factors.”
Health insurance reporter, Louise Norris, said “it would be hard for insurers to get around these legal regulations to implement discriminatory pricing policies,” and “I can’t think of a way that they could single out groups of employees who weren’t vaccinated and target them for higher premiums.”