American carrier Delta Air Lines informed employees that their health insurance premiums will be increased by $200 every month if they do not get the Wuhan coronavirus (COVID-19) vaccine. Delta said the new rule, which is set to begin Nov. 1, aims to cover the high costs of COVID-19 hospitalization. The airline’s latest measures appeared to be an attempt to increase COVID-19 vaccination rates through a punishment-based approach.

Delta CEO Ed Bastian announced the new rule on Aug. 25 through an employee memo. It said: “The average hospital stay for COVID-19 has cost Delta $50,000 per person.” Bastian defended the move by saying that the extra $200 charge “will be necessary to address the financial risk the decision to not [get vaccinated] is creating for our company.”

The Atlanta-based airline added that beginning Sept. 30, “[COVID-19] pay protection will only be provided to fully vaccinated individuals who are experiencing a breakthrough infection” in accordance with state and local regulations. It added that unvaccinated Delta employees who fall sick from COVID-19 will have to use their sick days after Sept. 30.

Furthermore, Delta also mandated new COVID-19 policies for its employees. It announced that unvaccinated staff members will have to mask up in indoor settings effective immediately. It also mandated unvaccinated employees to submit to weekly COVID-19 testing starting Sept. 12.

According to Bastian, about 75 percent of Delta’s roughly 75,000-strong workforce had already been vaccinated for COVID-19. However, this was not enough as “[the] aggressiveness of the [B16172 delta] variant means we need to get many more of our people vaccinated, and as close to 100 percent as possible,” he said. Bastian continued: “In recent weeks since the rise of the B16172 variant, all Delta employees who have been hospitalized with [COVID-19] were not fully vaccinated.”

Delta stood out from its rivals with its plan to raise health insurance premiums for unvaccinated employers, given that it self-ensures staff members. However, it stopped short of mandating COVID-19 vaccination altogether. 

Will coercion- and punishment-based vaccine mandates work?

Bastian’s Aug. 25 memo came two days after the Food and Drug Administration (FDA) gave full approval to the Pfizer/BioNTech COVID-19 vaccine. A spokeswoman for the airline said the plan to increase health insurance premiums had been in the works for weeks. Nevertheless, she added that the timing of Bastian’s memo and the FDA’s full approval of the vaccine was coincidental.

Wade Symons, regulatory resources group national leader at human resources consulting firm Mercer, projected that many firms will follow Delta’s footsteps. “Given the full FDA approval of the Pfizer vaccine, the strong statements asking employers to require employees to get vaccinated and the spike in new [COVID-19] cases around the U.S. – we are likely at a tipping point for companies taking stricter measures to motivate employees to get vaccinated,” he said.

Denise Rousseau of Carnegie Mellon University‘s Heinz College meanwhile said health insurance surcharges such as what Delta did could turn out to be more effective than outright mandates. “People are loss-sensitive. Losses are more painful than gains are good. If the incentives are experienced as a loss, they’ll act to correct that loss,” she said during a recent interview.

Krutika Amin of the Kaiser Family Foundation meanwhile said employers can impose a higher cost on unvaccinated individuals outside of the health plan through wellness incentive programs. She continued: “The Affordable Care act and other federal laws prohibit insurers from charging more for people who are not vaccinated. But employers, though incentive programs, may and can increase people’s cost if they are unvaccinated.”

True enough, some of Delta’s rival airline companies have implemented COVID-19 vaccine mandates. Alaska Airlines considered making vaccinations mandatory, but later said it would only do so when one of the COVID-19 vaccines received full approval. Frontier Airlines also announced that employees must get the COVID-19 vaccine or submit to regular testing for SARS-CoV-2. 

On the same day that Bastian released his memo, the Air Line Pilots Association (ALPA) received dozens of comments from pilots both supporting and opposing the measure. Delta said it informed ALPA, which represents aviators in the airline company, of the COVID-related changes.

ALPA has reiterated that COVID-19 vaccinations should be voluntary for its member pilots. In a statement, the union said it “has consistently advocated to maintain the right of each individual pilot to consult with [their] medical provider regarding COVID-19 vaccinations or booster doses.”

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