Insurance Implications of Required Vaccines


Loan Insurance

Insurance Implications
of Required Vaccines for engineers, students, lawyers and IT consultants are also in the mix. But employers have to remember the potential costs to their business if forced to cover this expense.

Employers may face:

  1. Employers cannot force employees to take the vaccine
  2. Companies cannot require doctors to give the vaccine
  3. State insurance agencies cannot require the vaccination
  4. Providers cannot require vaccination

Two exceptions to vaccine mandates

  1. The first exception applies if the vaccine could endanger the public health
  2. The second exception applies if the vaccine would not endanger the public health.

Other exceptional to vaccine mandates

  • An employer’s right to deny vaccinations is strictly “personal”
  • Exceptions apply to the most protected classes
  • Thimerosal (mercury preservative used prior to 1990 in vaccines)
  • Rasmofaction (infection)
  • Human papillomavirus (HPV)
  • Autism
  • Diabetes
  • Covid-19 (COVID-19)
  • Neuropathy
  1. The absolute right of each employee to refuse to be vaccinated
  2. Absolute right to vaccination available to everyone

Employees have the absolute right to refuse to participate in vaccines. They cannot be retaliated against for exercising their rights. Neither can they be fired for refusing. 

An employee has an absolute right to refuse vaccinations, even if their work is dependent on vaccine coverage. 


They have no legal duty to provide the vaccine or to allow anyone else to be vaccinated.

If an employee refuses to be vaccinated their health insurance remains in effect for the duration of their employment. 

  • Payments will be made after a COVID-19 case is diagnosed.

If an employee is vaccinated they will be able to continue to receive health insurance. Existing policies, however, will not be automatically renewed but will be reviewed for the presence of COVID-19. Those policies will be assumed valid from that point on.

An employer does not need to pay for an employee’s COVID-19 vaccinations if the employer can prove the vaccinations impedes the employee from performing their job. An employer, however, may have to pay for: Similarly, if the employee can show the vaccination impedes their performance, the employer might have to pay for alternate medical care.

  • Vaccine exchanges will continue to operate and offer vaccination records.

Expect minimal medical documentation from candidates; employees will fill in a simple declaration instead.

When does this occur?

When an employer learns of a COVID case on or about the date the employee is applying for employment. As a general rule, COVID cases identified on or about the date of application do not need to be reported. Some vaccines, like varicella, can be picked up by families months before a scheduled vaccination is due. Employers are faced with a vaccine-induced business disruption every three to five years. Benefits and premiums are some of the primary drivers of risk for large companies.

In 2011, we estimated the employer cost of metering out-of-pocket vaccine coverage risk to be between $300–800 million. The safety and efficacy of COVID-19 vaccines have never been proven in large populations in otherwise healthy adults.

Employer claims experience is a snapshot in time and does not completely capture what insurance companies will pay out-of-pocket. However, it is a reasonable estimate of expected rates after large cohorts are vaccinated. If 100,000 employees are vaccinated each year at the cost of $100,000 per employee, it’s expected the insurance industry will pay $2.4–7.2 billion in moderate to severe COVID-19 cases. This is an annual cost of $4–8 billion for the healthcare industry in the U.S. We estimated annual current US household COVID-19 costs at $1.8–2.4 billion. This represents an average of $300–800 million per year. These numbers depend on how many people are vaccinated and paid for by an employer.

Insurance companies and I: Medicaid Expansion

If the government establishes a national healthcare system, it will provide everyone access to COVID-19 vaccines.

The federal government’s cost-sharing model would provide an estimated 29 million individuals with COVID-19 coverage.

Based on state estimates, the healthcare industry would pay approximately 15–26 million dollars per year.

An employer may cover the costs of any COVID-19-eligible employee; however, they may face administrative hurdles from handling this large cohort in a timely fashion.

Examples of COVID-19 Exempt Employees

Employers may have adequate covered sick leave, but sick leave is often not available when employees are expected to work overtime and on-call in additional to regular office hours.

Examples of COVID-19 / Workplace Risk Areas

Employers face inherent risks in hiring for any industry. While we generally do not consider an employer’s business model to be a liability, they are responsible for their employees’ behavior on the job and if they insure themselves in a risk-averse manner.

Legal Questions

Whether the vaccine is mandated or not, employers will be faced with questions around vaccine distribution among employees — especially those with covered dependents.

Does it make sense to mandate COVID-19 vaccinations? Are they legal after all, and what will the government allow the employers to do with those rights?

Employer-Sponsored Programs

COVID-19 is a federal health emergency. State and local governments will likely pass COVID-19 insurance mandates as a cost-saving measure.

The short answer? Yes

  • COVID-19 is national and it is not a state or local decision.

Unlike a vaccine, which is a preventive disease medication, requiring one’s employees to get vaccinated is an immunization — providing that the disease will not negatively impact the employee when he or she works.

Should an Employer Require Vaccine?

The individual mandate that went into effect in September put a halt on fines and requiring government-approved vaccines (i.e., Disneyland health restrictions) in all states. The federal government, the states, and local governments all have a pilot program in place. That pilot program could continue beyond the mandated vaccine schedule.

States can choose to stay on schedule or resume enforcement at any time. As of the date of this article, nine states have stopped requiring the vaccine for all workers, however eight states are on schedule for July 1 implementation (Florida, Iowa, Maine, Maryland, New Mexico, North Carolina, Oregon, Rhode Island, and Washington). Tennessee is allowed to keep enforcing.

  • An employer’s non-compliance could result in a fine or other type of penalty.

For example, Louisiana fined Claridian Health Group $500 after it was found that the employer imposed a waiting period without justification even though the federal government had switched to full vaccination by July 1. This is the only instance of fines and penalties so far.

What About Medical Examinations?

Employers may follow all the federal, state, and local laws and regulations. The ultimate decision of whether to administer the vaccine lies with shareholders and board members.

 Based on the company’s and company resources, shareholders must decide that it is important to protect the company’s employees, patients, and the community. Health concerns may outweigh respect for non-immunization. Even if the safety and efficacy of the vaccine have been demonstrated, board members may decide to break the law if it means they can push back a timeline for implementation.  Providing the right vaccines to employees and patients is critical to maintaining both public safety and profitability. There is a clear path now to implement this vaccination program due to the president’s executive order. However, but the vaccine rollout is still nine months away.

What to Do When the Vaccine Does Not Work

If the government’s vaccination program cannot ensure the safety and efficacy of the vaccine, it is your decision whether to ignore the targeting laws, stop the vaccinations, or opt out. Just because there is no vaccine doesn’t mean there won’t be attempts to spread germs using this vaccine. 

Be safe and follow seasonal best practices. As soon as you know that there is no vaccine available, follow your state’s requirements and quarantine those who cannot pay close attention.

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