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Illustration: Sarah Grillo/Axios

Delta Air Lines' decision to charge unvaccinated employees an extra $200 per month for health insurance signals that rewards alone aren't doing enough to measurably increase rates of COVID-19 vaccination.

Why it matters: Employers are playing a central role in getting more people vaccinated, but it's unclear how much, or if, these types of penalties will help.

How it works: Federal law allows employers to charge higher health insurance premiums to workers based on a health factor only if that factor is within a "wellness program," according to Georgetown University health insurance expert Sabrina Corlette.

Yes, but: "Most [wellness] programs do not work," health policy researchers wrote in 2017. "Some raise serious legal concerns."

Delta's surcharge may not follow federal guidelines.

  • Penalties can't be so large that they'd be "coercive," according to the Equal Employment Opportunity Commission.
  • Rewards and penalties in a wellness program also can't exceed 30% of the cost of employee-only coverage, which in 2020 averaged $7,470, according to the Kaiser Family Foundation.
  • Delta's $200-a-month penalty, or $2,400 for the year, exceeds 30% of that average and would more than double the average worker contribution. Other companies have been contemplating much lower surcharges.

Delta's surcharge may not lead to behavioral change.

  • Health insurance premiums are automatically deducted from workers' paychecks, so people won't feel the penalty like they would if they had to pay $200 from their wallet.
  • Research suggests sticks over carrots can be "stigmatizing."
  • Tobacco surcharges haven't really worked.

Between the lines: The policy might not even affect all Delta employees, based on a closer read of the company's language.

  • Delta specifically said this will apply to unvaccinated workers in its "account-based health care plan," which presumably are only those who have some type of health savings account.
  • Delta did not immediately respond to questions.

The bottom line: If companies want more of their workforce vaccinated, mandates might be the clearest, legally protected option over rewards and penalties.

Go deeper

Dec 3, 2021 - World

COVID cases surge in South Africa in sign Omicron wave is coming

Recreated from Our World in Data; Chart: Axios Visuals

South Africa alerted the world to the Omicron variant. Now data out of South Africa may serve as a warning of what we're facing.

Driving the news: South Africa recorded 11,535 new cases Thursday with 22.4% of tests coming back positive — up from an average of about 300 new cases, with a 2% test positivity rate 10 days earlier. The country's top public health officials expect that exponential rise to continue as Omicron rapidly becomes the dominant variant.

Updated Dec 3, 2021 - Health

Omicron cases confirmed in 5 U.S. states

A healthcare worker inserts a Covid-19 rapid test into a machine in Denver, Colorado. Photo: Daniel Brenner/Bloomberg via Getty Images

Hawaii became on Thursday the fifth state to confirm the newly discovered Omicron variant after New York announced five new cases earlier in the day.

The latest: In Hawaii, the variant was found in an unvaccinated O'ahu resident with moderate symptoms who had previously been infected with COVID-19, per a state health department statement. The variant has also been confirmed in California, Colorado and Minnesota.

Dec 2, 2021 - World

Germany approves new restrictions for unvaccinated people

Photo: John MacDougall - Pool/Getty Images

German Chancellor Angela Merkel said Thursday that people who are unvaccinated will not be allowed in nonessential shops, cultural and recreational venues, AP reports.

State of play: Merkel, alongside incoming Chancellor Olaf Scholz, said the measures were necessary to avoid overflowing hospitals with coronavirus patients. The country is seeing an increase in daily infections.