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CHICAGO, Aug. 25 (Reuters) – Delta Air Lines (DAL.N) said on Wednesday that employees will have to pay an additional $ 200 each month for their company-sponsored health care plan if they choose not to take get vaccinated against COVID-19.
The move to add a surcharge to health insurance premiums is the latest tactic for U.S. companies to push employees to get vaccinated to fight the pandemic.
A number of US companies, including competitor Delta United Airlines (UAL.O), have imposed injections on their employees to protect their operations against the highly contagious Delta variant of the coronavirus, which has particularly affected parts of the country with lower vaccination levels.
President Joe Biden also urged private companies to demand that their employees be vaccinated.
The surge in coronavirus infections has clouded the outlook for airlines. American Airlines (AAL.O) said on Wednesday that its revenue for August was lower than its internal forecast due to a slowdown in bookings and an increase in cancellations. Read more
The comments came two weeks after Southwest Airlines (LUV.N) issued a profit warning, citing the impact of the Delta variant on its business. Read more
Shares of U.S. airlines have risen in the past two days, however, in hopes that full approval of the COVID-19 vaccines from Pfizer (PFE.N) and BioNTech (22UAy.DE) by the Food and Drug Administration would increase. the vaccination. rate and slow new infections.
In a memo, Delta Air chief executive Ed Bastian said the monthly surcharge would go into effect on November 1. He said the surcharge is necessary to address the financial risk the Atlanta-based airline faces due to the decision not to vaccinate.
Wade Symons, partner and head of the regulatory resource group at global consulting firm Mercer, believes US companies have reached a “tipping point” to take tougher measures to motivate employees to get vaccinated.
“We expect more companies to announce vaccine mandates and surcharges in the coming weeks,” he said.
Company data shows that a quarter of U.S. employers employing 500 or more people charge their employees additional fees for company-sponsored health care plans if they use tobacco.
Delta Air did not say whether its employees were subject to other surcharges.
PROOF OF INOCULATION
A spokesperson for Delta Air said the average hospital stay for COVID-19 cost the company $ 40,000 per person. The surcharge would apply to the entire workforce and proof or documentation of vaccination will be required to avoid it, the spokesperson said.
Chris Riggins, spokesperson for the Air Line Pilots Association at Delta, said the union did not intend to oppose the proposed surcharge because it would not affect the healthcare plan it he negotiated with the airline for its members.
But since most pilots are not covered by the union negotiated plan, Riggins said they would see an increase in their healthcare costs if they decide to remain unvaccinated.
In the note, Bastian said 75% of Delta Air’s workforce has been vaccinated. However, not all of the employees who have been hospitalized with COVID-19 in recent weeks were not fully vaccinated, he said.
While Delta had refrained from making vaccines mandatory for its staff, its latest move contrasted starkly with the policy of competitors such as American Airlines and Southwest Airlines, which “strongly encourage” their employees to be vaccinated.
American Airlines is giving vaccinated employees an extra day off in 2022 and $ 50 through its employee recognition platform.
Bastian said unvaccinated Delta employees will be required to wear masks in all indoor environments, effective immediately.
Any employee in the United States who is not fully vaccinated will be required to take a COVID-19 test every week. Compulsory testing will begin on September 12.
Those who test positive for the virus will need to isolate themselves and stay out of the workplace, Bastian said.
The company will offer COVID-19 salary protection starting September 30 only to fully vaccinated employees who experience a breakthrough infection, he said.
Reporting by Rajesh Kumar Singh; edited by Jonathan Oatis, Emelia Sithole-Matarise and Steve Orlofsky
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