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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

Hawaii invites fully vaccinated travelers to return from Nov. 1

Hawaii Gov. David Ige. Photo: Darryl Oumi/Getty Images

Hawaii Gov. David Ige (D) announced plans Wednesday to soon welcome back nonresidents to the island state who are fully vaccinated against COVID-19 for nonessential travel.

Why it matters: Hawaii's tourist-dependent labor market suffered one of the worst blows in the U.S. last year and the state's climb out of its pandemic-sized hole is moving slowly, Axios' Courtenay Brown notes.

Oct 20, 2021 - Health

FDA authorizes mix-and-match for COVID booster shots

Photo: Francine Orr/Los Angeles Times via Getty Images

The Food and Drug Administration (FDA) on Wednesday gave its approval for Americans to get booster shots that are different from the COVID vaccine they initially received.

Why it matters: The recommendation from the FDA, which also authorized booster shots for people who received Moderna and Johnson & Johnson vaccines on Wednesday, paves the way for an expansion of booster shots.

Oct 20, 2021 - Health

New York City announces COVID vaccine mandate for all public workers

A health care worker administering a dose of the COVID-19 vaccine to a student in Staten Island in August. Photo: Jeenah Moon/Bloomberg via Getty Images

New York City Mayor Bill de Blasio on Wednesday announced an expanded COVID-19 vaccine mandate that covers all of the city's public employees, including police officers and firefighters.

Why it matters: Around 71% of city workers have already satisfied the mandate by receiving at least one dose. The remaining 46,000 unvaccinated employees will have to receive their first dose by Oct. 29 or will risk being placed on unpaid leave until they can show proof of a first dose, the Wall Street Journal reported.