Vaccine Incentives and Health Insurance Surcharges

Abstract

When COVID-19 spread across the globe, overwhelming healthcare systems and interrupting national productivity, many hoped that the discovery of a vaccine would provide necessary relief. When the Food and Drug Administration (FDA) granted emergency approval to the Pfizer-BioNTech COVID-19 Vaccine on December 11, 2020, a sense of celebration spread throughout the country. Many believed that this vaccine would provide the long-awaited return to normal that so many families had hoped for. Instead, however, the vaccine became a political talking point, dividing the nation between individuals lining up to take the shot and those who fell victim to misinformation, public skepticism, and opposition to vaccine mandates. More than 1 year later the United States (U.S.) is still dealing with low COVID-19 vaccination rates, struggling to reach herd immunity, and lowering the continued financial burden the pandemic imposes on healthcare systems.

Unvaccinated individuals are at a far higher risk of death and hospitalization from COVID-19, and hospitalizations of unvaccinated adults cost the U.S. $13.8 billion from June to November 2021. The monetary cost of treating unvaccinated individuals for COVID-19 is borne not only by patients but also by society more broadly, including taxpayer-funded public programs and private insurance premiums paid by workers, businesses, and individual purchasers. Widespread vaccination promotes the health of employees and can assist businesses in assuring customers of their safety, reducing the harm of low staffing, and preventing lost productivity.

Vaccination has an important role in controlling the COVID-19 pandemic and preventing harms from it. With a significant portion of the U.S. population remaining unvaccinated or unboosted, incentives may be necessary for rapid vaccine uptake. Early on, employers began evaluating options to encourage employee uptake of vaccines with three goals in mind: to minimize transmissions, to lower absence due to illness, and to reduce COVID-19-related health care expenditures. Rather than mandating vaccination, offering incentives to vaccinate have become more and more popular for companies attempting to maintain a healthy and productive workplace. However, employers should be mindful of several key challenges and considerations of offering incentives to vaccinate. In this chapter, we evaluate the effectiveness and associated challenges with employer-offered vaccination incentives and highlight key strategies for employers moving forward.