U.S. firm's health insurance surcharge for unvaccinated draws interest in Canada, too

Employers have been trying to encourage employees to get vaccinated against COVID-19. Some paid bonuses. Others provided gift cards. What happens when rewards aren't enough? A U.S. employer recently announced a different approach: All unvaccinated employees enrolled in the company's healthcare plan will have to pay a $200 monthly surcharge starting on November 1, 2021. In support for the surcharge, the employer noted all of its employees who were hospitalized with the virus weren't fully vaccinated. Their average hospital stay costs the company $50,000 per person.

10 questions Canadian employers are asking

The healthcare situation may be different in Canada, but some are already asking if they can follow suit and increase health benefit premiums for unvaccinated employees. Here are 10 questions to consider before making the decision.

Is there a defensible rationale for an increase? The U.S. employer that announced its plans has a clear and reasonable rationale for the surcharge. Although 75% of its American workforce is vaccinated, its small unvaccinated employee population is having a direct and significant financial impact on the business from healthcare costs.

Canadian employers usually face fewer direct healthcare costs. What surcharge rationale can they prove and defend at arbitration or in court? If companies are self-insured for short term disability, have they seen an increase in paid benefits to unvaccinated workers who get COVID-19? If they're providing paid sick time, are they seeing an increase in such leave for unvaccinated workers? Is there another rationale?