Delta Air Lines imposes $200 monthly insurance fee on unvaccinated workers

Delta Air Lines, days after the government fully approved a COVID-19 vaccine, took a harder line with its unvaccinated workers.

Employees on Delta's health plan who haven't been fully vaccinated will incur a $200 monthly surcharge, deducted from paychecks beginning in November, the company said Wednesday. That adds up to a $2,400 cut in annual pay.

It's the latest corporation to impose stricter COVID-19 personnel policies following the legal protections offered by the U.S. Food and Drug Administration's full approval of the Pfizer COVID-19 vaccine on Monday.

"With this week's announcement that the FDA has granted full approval for the Pfizer vaccine, the time for you to get vaccinated is now," Ed Bastian, Delta's chief executive, told employees in a memo. About 75% of Delta's employees are fully vaccinated.

The Atlanta-based airline employs about 5,800 Minnesotans. While that's fewer than the 8,400 it had before the pandemic, Delta remains one of the state's largest private employers and Minneapolis-St. Paul International Airport is its second-largest hub.

Bastian said the average cost to the airline for each Delta worker hospitalized by COVID-19 is around $50,000. "This surcharge will be necessary to address the financial risk the decision to not vaccinate is creating for our company," Bastian wrote.

Since the rise in recent weeks of the more contagious version of coronavirus known as the delta variant, none of Delta's fully vaccinated employees were hospitalized. Those who were have not been fully vaccinated, the airline said.

"While we are grateful of the progress we've made, the most recent virus variants make it clear that more work remains ahead," Bastian said.

U.S. airlines are taking different approaches to encourage vaccinations. On one end are those mandating workers get the shots by a certain date, including United, Frontier and Hawaiian airlines. At the other end are airlines that are relying on incentives, like American Airlines' bonus vacation day, to encourage vaccination.

Delta is in the middle of that range, but the new policy moves it beyond incentivizing employees and into penalizing those who choose not to get the shot.

Unions representing airline workers are generally supportive of the vaccination efforts.

The Air Line Pilots Association (ALPA), the nation's largest pilot union and whose members include Delta's pilots, this week applauded the federal government's full approval of the Pfizer vaccine, citing hope that it would speed the world's recovery and help the aviation business rebound.

Delta's pilot group doesn't oppose the airline's policy changes affecting unvaccinated members but is against a vaccine mandate, said Chris Riggins, a Delta pilot and spokesman for the group.

The vaccination rate for Delta's pilots, he said, is between 80% and 85%.

For some, the policy immediately raised questions about health discrimination.

While federal and state laws generally prohibit health plans from adjusting premiums based on an individual's health status, "this does not prevent the employer from providing incentives for employees to be vaccinated, as long as the incentives do not violate anti-discrimination laws," Laura Kane, head of communications for the National Association of Insurance Commissioners, wrote in an email.

Sabrina Corlette, a health policy and private insurance expert at Georgetown University, unpacked it further in a long Twitter thread Wednesday. After detailing the legal standards Delta would need to meet, she concluded that the airline's new insurance policy is "likely permissible under current federal law."

"But," she added, "that doesn't make it an advisable course of action. There is very little evidence wellness programs actually change behavior."

A survey released Tuesday by Eagle Hill, a human resources consulting firm, found 41% of Americans believe unvaccinated employees should face higher insurance rates.

Delta is also requiring all workers who are not fully vaccinated to take weekly COVID-19 tests. That will begin Sept. 12 and continue as long as community case rates remain high, the airline said.

Unvaccinated employees will immediately be required to mask up at indoor Delta facilities until case rates drop.

And beginning Sept. 30, COVID-19 pay protection will only apply to fully vaccinated employees who suffera breakthrough infection — something Delta says will be done in compliance with state and local laws. Like many companies, Delta early in the pandemic created extra time off for employees who miss work because of the virus.

Delta's new policies don't apply to regional airline partners, including Minneapolis-based Endeavor Air, that operate under the Delta Connection name. Endeavor, a wholly owned subsidiary of Delta's, manages its workers separately.

Beyond the public health factor, airlines are financially dependent on a vaccinated public. Following a surge in spring and summer travel created by lower COVID-19 case rates, bookings slowed and cancellations increased as the virus took a turn for the worse in August.

Two weeks ago, Southwest Airlines lowered its financial guidance to investors for late summer and early fall. American Airlines on Wednesday told investors its August revenue is trending below its earlier internal forecast.