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Agencies Clarify How Employers Can Charge COVID-19 Vaccine Premium Incentives

US employers have grown increasingly interested in identifying incentives that increase COVID-19 vaccination among employees. The US Departments of Labor, Treasury and Human and Human Services recently issued guidance regarding the application of the Health Insurance Portability and Accountability Act (HIPPA) wellness rules to vaccine-related premium surcharges and discounts, clarifying that employers may charge vaccine premium incentives if they adhere to the requirements of activity-only health-contingent programs. In this Employee Benefit Plan Review article, McDermott Partner Judith Wethall and McDermott Associate Sarah G. Raaii outline what this HIPPA guidance means for employers.

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Saga and Legal Challenges Continue Despite Vaccine Requirement for Healthcare Workers

The US Supreme Court’s January ruling allowing the Centers for Medicare & Medicaid Services to enforce its COVID-19 mandate is likely to continue to face challenges. Nevertheless, in this article published by the Health Care Compliance Association, McDermott Partner Sandra DiVarco said that the Supreme Court’s decision wasn’t a surprise.

“Many of [the CMS] providers may have slow-walked their compliance and now in theory need to be fully compliant,” DiVarco noted.

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Supreme Court OKs CMS Vaccine Mandate but Blocks OSHA Rule

On January 13, 2022, the Supreme Court of the United States released two emergency opinions that change the landscape of the three federal vaccine rules. In summary:

  • A 5-4 Court majority let the Centers for Medicare & Medicaid Services (CMS) enforce its vaccine mandate nationwide, impacting specified healthcare facilities.
  • A 6-3 majority blocked the US Occupational Safety and Health Administration (OSHA) from enforcing its vax-or-test Emergency Temporary Standard (ETS) applicable to large employers.
  • The third federal vaccine rule—the federal contractor vaccine mandate—remains subject to multiple legal challenges and, at this time, the government is blocked from enforcing the mandate nationwide. The Court has not yet weighed in on this mandate.

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Fifth Circuit Brings Enforcement Back into the Mix: The Latest Court Moves with the CMS Vaccination Mandate

A flurry of litigation in federal district and appellate courts has led to an even split between states in which the COVID-19 vaccine mandate issued by the US Centers for Medicare and Medicaid Services (CMS) may be implemented and states in which such implementation has been prevented. Additional appeals are expected shortly; however, the practical effect of these decisions on enforcement of the CMS mandate remains uncertain.

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Georgia Court Issues Nationwide Injunction Blocking Federal Contractor Vaccine Mandate

On December 7, 2021, the US District Court for the Southern District of Georgia issued a nationwide injunction that blocks the federal government from enforcing the federal contractor and subcontractor vaccine mandate. The preliminary injunction issued is for the pendency of the litigation challenging the enforceability of the mandate filed by the states of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah and West Virginia. This injunction order may be challenged on appeal.

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UPDATE: CMS Issues COVID-19 Vaccination Interim Final Rule for Healthcare Facilities

On November 16, 2021, 12 states—Montana, Alabama, Arizona, Georgia, Idaho, Indiana, Louisiana, Mississippi, Oklahoma, South Carolina, Utah and West Virginia—filed a complaint in the US District Court for the Western District of Louisiana requesting that the Interim Final Rule with comment period (IFR) that put in place the vaccination mandate applicable to certain covered healthcare facilities and staff be declared arbitrary and capricious, contrary to law and in excess of the Centers for Medicare and Medicaid Services’ (CMS) statutory authority. CMS published an IFR on November 5, 2021, that implements the Biden administration’s previously announced vaccine mandate for healthcare facilities. The expansive IFR applies to more than a dozen types of healthcare providers and suppliers (facilities), affects more than 10 million healthcare staff and carries an anticipated potential price tag in excess of $1.3 billion dollars for the first year of implementation.

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Whistleblowers, Fears of Losing Funds Key to Enforcing US Vaccine Rules

Even though the US Court of Appeals for the Fifth Circuit temporarily blocked the Occupational Safety and Health Administration’s (OSHA) COVID-19 vaccination rule for employers (though not for the healthcare sector), businesses should continue preparing for important OSHA deadlines.

According to this Reuters article, workplace whistleblowers and fears of disappearing federal funds will likely help with vaccination mandates within businesses, hospitals and nursing homes. However, OSHA is unlikely to demand proof from every healthcare provider of vaccination and testing protocols. The Centers for Medicare & Medicaid Services (CMS) also typically does not survey accredited healthcare providers unless there is a complaint or a need for recertification, McDermott Partner Sandra DiVarco noted.

“On a stakeholder call, CMS reiterated their desire to work with providers to come into compliance and not to sort of send SWAT teams to go out and look for problems,” DiVarco said.

Access the article.




Agencies Clarify How Employers Can Charge COVID-19 Vaccine Premium Incentives

On October 4, 2021, the US Departments of Labor, Treasury, and Health and Human Services issued guidance regarding the application of the Health Insurance Portability and Accountability Act (HIPAA) wellness rules to vaccine-related premium surcharges and discounts, clarifying that employers may charge vaccine premium incentives if they adhere to the requirements of activity-only health-contingent programs.

Employers have grown more interested in exploring incentives designed to increase COVID-19 vaccination rates among employees. Some employers have announced plans to charge unvaccinated employees higher contributions for health coverage than vaccinated employees, while some have been considering other options, such as excluding coverage for COVID-related illnesses, charging higher cost-sharing for COVID-19-related illnesses and offering more generous plan options to employees who are vaccinated.

Read more here.




OSHA Updates COVID-19 Safety Guidance for All Industries

On August 13, 2021, the US Occupational Safety and Health Administration (OSHA) updated its COVID-19 guidance documents for employers in all industries. The new recommendations echo those published by the US Centers for Disease Control and Prevention (CDC) on July 27, 2021, and build upon OSHA’s healthcare industry requirements.

In some of its most powerful language yet (and stopping just short of an absolute requirement), OSHA “strongly encourages” employers to provide paid time off to workers for the time it takes for them to get vaccinated and recover from any side effects.

Read more here.




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