Incentivizing Employees to Obtain COVID-19 Vaccines

There are a number of reasons why employers may want their employees to receive the COVID-19 vaccines.  Such reasons may include, for example, the employer’s commitment to public health initiatives, concerns with employee health and wellbeing or satisfaction of vaccine requirements imposed by suppliers, vendors or affiliates. If your organization is considering whether to incentivize employees to get vaccinated and/or requiring that employees prove that they have been vaccinated, there are several items to consider. Those items are summarized below.   

I. Amount of Permissible Incentive

There is some legal uncertainty regarding the permissible amount of an incentive that an employer may offer its employees. The Americans with Disabilities Act (“ADA”) generally prohibits an employer from coercing employees to participate in a wellness program, but voluntary wellness programs are generally permitted. Current guidance is unclear as to what level of incentives are permitted without causing a wellness program to cease being voluntary. De minimis incentives (e.g., a water bottle or $15 gift card) are generally considered to be acceptable. 

In addition to the ADA, the Health Insurance Portability and Accountability Act (“HIPAA”) also limits the amount of wellness program incentives that can be offered. HIPAA imposes a limit on incentives offered under a health-contingent wellness program equal to 30% of the total cost of health plan coverage. Considering the current cost of health plan coverage, a 30% incentive may be very valuable. 

Given conflicting rules and standards regarding wellness incentives, employers should proceed with caution after consultation with their benefits attorney.

II. Nondiscrimination Considerations

A vaccination incentive program must be designed in a manner that does not discriminate against employees who have a religious objection to receiving a vaccination or a disability that interferes with their ability to receive a vaccination. Therefore, if an employee has a sincere religious objection or a legitimate medical disability that interferes with his or her ability to receive the vaccination, then the employer must provide a reasonable accommodation (both in the context of any vaccination requirement and with regard to a vaccination incentive). The type of accommodation provided may vary depending on the facts and circumstances and should be discussed with competent counsel.

III. Requesting and Providing Proof of Vaccination

An employer may not make medical or disability-related inquiries of employees. Relevant legal guidance suggests that merely asking employees whether they have received a vaccination or requesting proof of vaccination does not constitute a disability-related inquiry for purposes of the ADA. However, a medical questionnaire that must be completed before a vaccine is received could be considered a disability-related inquiry subject to the ADA depending on the circumstances. Therefore, an employer should avoid collecting any personal health information as part of any pre-screening questions or other part of their vaccine incentive program.

HIPAA generally applies to protected health information that is maintained by a group health plan, but not to employment-related information that is maintained by an employer. Therefore, if proof of vaccination is provided by the employee directly to the employer, HIPAA does not prevent the employer from using or disclosing this information to a third party (because the employer is not a HIPAA-covered entity in its capacity as an employer).

When requesting vaccination information from employees, and especially when conveying that information to a third party, employers must be careful. At times, employers may be required to balance the privacy interests of employees with legal compliance and demands from business partners. Our benefits team is experienced with navigating these complex decisions and would be happy to speak with you about them.

Please contact any of our ERISA attorneys to further discuss how vaccination requirements and incentive programs may be implemented within your organization.