Issue #109: Being vaxxed may save me cash on health insurance

September 1, 2021 • Issue #109

Hi y’all —

Perhaps the best song in High School Musical is “Stick to the Status Quo,” a group number where teens in various cliques express their desire to break out of stereotypes and try something different. The jock bakes; the skater plays the cello; you get the idea.

At one point, as the geek is singing about how she secretly dances hip-hop — “I love to pop and lock and jam and break!” — a student interrupts. 

“Is that even legal?” he asks.

Ever since I saw this scene in eighth grade, I’ve made that reference a lot. It may be obscure, and I don’t know if people realize that it’s from a 2006 DCOM, but it’s a weirdly useful phrase. “Is that even legal?” can be a reaction to pretty much anything, from seeing an extremely tiny dog to encountering a cheeseburger at a restaurant that comes topped with mac and cheese. 

And in fact, it was my first question when I read about Delta Airlines’ decision to make unvaccinated employees in certain plans pay a $200 monthly surcharge for health care starting this fall. 

Is it even legal to make unvaxxed workers pay more for health insurance? How can they do that?

Financial consequences for Americans who ignore medical advice and choose to remain unvaccinated have been mounting lately — I wrote about them here — and workplace-specific vaccination mandates were always going to spike with the Food and Drug Administration's approval of the shot. But the health insurance angle represents a twist in the narrative.

At Delta, where 75% of the 74,000 employees are vaccinated against the coronavirus, the decision is likely meant to motivate holdouts. At its core, though, it's motivated by money.

"The average hospital stay for COVID-19 has cost Delta $50,000 per person," Delta CEO Ed Bastian said in a staff memo. "This surcharge will be necessary to address the financial risk the decision to not vaccinate is creating for our company."

Like many large companies, Delta has what's called a self-insured (or self-funded) plan, meaning it takes on the financial burden for employee health care and pays claims itself. UnitedHealthcare administers the plans. And while the Health Insurance Portability and Accountability Act (HIPAA) restricts insurers and employers from discriminating against people based on health status, Delta may be taking advantage of a loophole of sorts.

Specifically, Lindsay Wiley, a professor who specializes in health law at the American University Washington College of Law, told me the airline is likely intending to implement the surcharge as part of a wellness program.

Some no-background: When HIPAA was passed in the '90s, it limited the ability of companies to turn away or charge some participants more than others based on "health status-related factors." Wiley says the Affordable Care Act, signed in 2010 and implemented in 2014, strengthened those rules and widened their applicability.

For example, pre-existing conditions are now fully covered. When setting rates, insurance companies can only take into account people's age, location, enrollment status, plan category and tobacco use. 

Though some might classify refusing the COVID-19 vaccine as a behavioral choice similar to smoking, it doesn't explicitly fall into one of those five categories.

However, "there’s an exception to these limits that allows group health plans (employment-based plans) to establish premium discounts or rebates or modify copayments or deductibles as an incentive for employees who adhere to 'programs of health promotion and disease prevention' — better known as 'wellness programs,'" Wiley says.

If an employer like Delta structures its surcharge as an incentive for participating in a wellness program — one that just so happens to make employees show proof of vaccination — it could be in different territory.

That's because Wiley says the wellness program regulations are "complex and in flux." The Trump administration proposed changing the rules around wellness programs in January, but when President Joe Biden took over he froze them. Biden has since taken his foot off the gas, in part because the Equal Employment Opportunity Commission (EEOC) is controlled by the Republican party (and will be until at least July 2022).

"One of the standards an employer wellness program has to meet is that it has a reasonable chance of improving health or preventing disease," Larry Levitt, executive vice president for health policy for the Kaiser Family Foundation, pointed out on Twitter. "Assuming Delta's health benefits surcharge increases vaccine uptake, it's a no-brainer that it meets that standard."

The EEOC, for its part, has said that companies are generally OK to offer vaccine incentives "as long as the incentives are not coercive."

THE BOTTOM LINE

(but please don't tell me you scrolled past all of my hard work)

If I have a certain type of insurance through my company, it can charge me more for health care if structured as a wellness plan. There are a bunch of laws involved, including HIPAA, the Affordable Care Act, the Employee Retirement Income Security Act and the Genetic Information Nondiscrimination Act, but my employer has enough leeway to create this as a vaccination incentive.

So, yes, for now it's legal. Probably.

VIA GIPHY

RECEIPT OF THE WEEK

check out this wild celebrity purchase

VIA INSTAGRAM

Michael Jordan is on vacation in Croatia right now… on board a yacht that costs $1.2 million a week. To drink while he sails, the basketball player-slash-Space Jam star also reportedly purchased 25 bottles of Clase Azul Plata tequila, which go for at least $1,700 apiece online. Only the best (and most expensive) for the GOAT.

INTERNET GOLD

five things I'm loving online right now

1	I love this Philadelphia Inquirer story about Stoppy, a stop sign in a random parking lot that gets run over all the time and has a local fandom on Facebook. “Stoppy is an anthropomorphized, multigenerational, frequently abused, and universally beloved stop sign,” said one resident. “As soon as I saw my first post about Stoppy, I knew I was committed to loving that stop sign and loving other people loving that stop sign.” Inspiring.
2	Check out Nestflix, a collection of 450 fake shows and movies that exist in shows and movies.
3	Etihad Stadium, home of the Manchester City soccer team in the U.K., is serving coffee, tea and hot chocolate in edible cookie cups, which sound like the perfect thing to stress-eat when a game goes to penalty kicks.
4	This is now a Kacey Musgraves stan newsletter.
5	Can’t stop thinking about this music video that is a direct copy of the iconic scene in Twilight where the Cullens play baseball during a thunderstorm. Also, I am literally never not thinking about that thing Jasper does with the bat. So.

401(K)ITTY CONTRIBUTION

send me cute pictures of your pets, please

VIA DELANIE HENDERSON

Meet Jasper, a Jacksonville kitty who’s having his pawyer look over his company’s vaccination pawlicy.

We’re breaking free...

See you next week.

P.S. After last issue, I learned we're pretty much all in agreement that it's a little weird to put your Venmo on social media for your birthday (but there are some exceptions). In other news, Scholar Denise said her favorite children's book is Charlotte's Web, and Scholar Dale likes Where the Sidewalk Ends.

P.P.S. Is your employer requiring you to get vaccinated against COVID-19? What’s your favorite scene in Twilight? How many cookie cups do you think you could eat during one soccer game? LMK at julia.glum@money.com or Tweet @SuperJulia on Twitter. Stay safe, guys.

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