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October 5, 2021

A $200 surcharge for unvaccinated spouses? It's coming to one Louisiana health system.

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    As more companies consider implementing insurance surcharges for their unvaccinated employees, Ochsner Health plans to add a $200 monthly surcharge for employees with unvaccinated spouses and domestic partners covered by the organization's health plan.

    Resource library: How health care organizations can navigate vaccination mandates and other issues in the post-pandemic world

    Unvaccinated employees face potential insurance surcharges

    While many companies have relied on incentives to encourage employee Covid-19 vaccination, some have recently opted to implement penalties, such as premium surcharges, for those who remain unvaccinated instead.

    Recent polling suggests that these surcharges could spur a significant portion of unvaccinated employees to get the Covid-19 vaccine. According to an Affordable Health Insurance poll of 1,000  unvaccinated individuals with employer-based health plans, nearly 75% said a health insurance surcharge could motivate them to get vaccinated, with 43% saying a surcharge would definitely motivate them to get vaccinated.

    "As they say, the vaccine is not mandatory, but if people have extra charges with their insurance due to not being vaccinated, people will surely push themselves to be vaccinated," Nick Schrader, insurance agent at Texas General Insurance, said.

    So far, Delta Airlines is the largest employer to implement an insurance surcharge for unvaccinated employees, and it has already seen significant increases in employee vaccination.

    In August, Delta announced unvaccinated employees would have to pay a $200 monthly health insurance surcharge to remain on the company's health insurance plan beginning Nov. 1.

    According to Delta, the surcharge will protect the company from lost revenue due to unvaccinated employees being hospitalized with Covid-19—which costs the company an average of $50,000 for each case.

    Henry Ting, Delta's chief health officer, said almost 20% of the company's unvaccinated employees received the Covid-19 vaccine in the two weeks after the surcharge was announced. In addition, the company did not see any employee turnover or resignation due to the announcement, Ting said.

    Ochsner Health's 'spousal Covid vaccine fee'

    Ochsner Health, Louisiana's largest health system with nearly 32,000 employees and more than 4,500 physicians, plans to implement a $200 monthly surcharge for employees with unvaccinated domestic partners and spouses on the organization's health insurance plan, the Associated Press reports.

    Ochsner is the first health system to apply insurance surcharges to unvaccinated family members, not just employees. Other Louisiana health care organizations, such as Our Lady of the Lake Regional Medical Center and LCMC Health, said they would ask families of employees to be vaccinated, but did not plan on implementing a surcharge for unvaccinated spouses or partners, the Times-Picayune/New Orleans Advocate reports.

    According to a letter sent from Ochsner leaders to employees, the surcharge, called the "spousal Covid vaccine fee," will begin in 2022 and could deduct up to $2,400 a year from an employee's paycheck. The surcharge will only apply to domestic partners or spouses, not other dependents covered by an employee's health plan like children.

    Warner Thomas, Ochsner's president and CEO, said the surcharge for unvaccinated spouses and partners is similar to a surcharge for tobacco users and will be used to help keep health premiums low for employees. As a self-insured organization, Ochsner is responsible for the cost of Covid-19 treatment for patients on its health insurance plan, the Associated Press reports.

    "The reality is the cost of treating Covid-19, particularly for patients requiring intensive inpatient care, is expensive, and we spent more than $9 million on Covid care for those who are covered on our health plans over the last year," Thomas said.

    "We know that Covid-19 vaccination dramatically reduces transmission, severity of symptoms, hospitalizations, and death. Approximately 90% of those hospitalized with Covid in our facilities have been unvaccinated since vaccines were approved in December 2020,” he added. "Widespread vaccination is critical to stopping the spread of Covid-19, and we hope this change will encourage even more community members to get vaccinated."

    Thomas also clarified that unvaccinated spouses and partners are not required to be vaccinated because of the surcharge. "This is not a mandate as non-employed spouses and domestic partners can choose to select a health plan outside of Ochsner Health offerings," he said.

    Unvaccinated spouses and partners can also apply for medical or religious exemptions for the Covid-19 vaccine, Thomas said. Currently, around 300 Ochsner employees have applied for medical or religious exemptions, the Times-Picayune/New Orleans Advocate reports. (AP/NBC News, 10/1; Woodruff, The Times-Picayune/New Orleans Advocate, 9/30; Frazier, Axios, 10/1; Vakil, The Hill, 10/1)

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