Employer health plans must pay the cost of a COVID-19 vaccine

As many have likely heard, multiple COVID-19 vaccine candidates have rapidly reached the final stages of development and are showing extraordinary effectiveness. The vaccines are beginning to be submitted to the Food and Drug Administration (FDA) for emergency approval before hitting the market. Consequently, employers need to start thinking about how the developments will affect their workplace benefit plans.

Paying for vaccines

As my colleague Charlie Plumb recently wrote, employers are generally permitted to implement mandatory vaccine policies that require employees to be vaccinated before returning to the workplace. Assuming no disability or religious exception applies, the next question is: Who has to pay for it?

Surprisingly, the answer is pretty simple: Employer-sponsored group health plans (whether fully or self-insured) will be required to pay the full cost of the vaccine for employees covered under the plan with no cost-sharing (copay, coinsurance, deductible) to the employee.

General preventive service rules

As employee benefits professionals and insiders are inevitably aware, the Affordable Care Act (ACA) already requires group health plans and insurers to cover certain “preventive care” items with no cost-sharing (also called first-dollar coverage), such as the flu vaccine. Such items are generally listed on the HealthCare.gov website.