This article was curated by the Sequoia Compliance Team and posted in partnership with Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on ERISA-governed and non-ERISA-governed retirement and welfare plans, executive compensation and employment law. 

With the recent “emergency use” approval of a third COVID-19 vaccine, employers are seeing the light at the end of the tunnel after one of the most disruptive events to the modern-day workforce. As a result, many employers question whether they can “mandate” their employees receive the COVID-19 vaccine to ensure workplace safety. While prior EEOC guidance focused on the flu and other vaccines, on December 16, 2020, the EEOC updated its guidance, “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws” in an effort to provide insight to employers.

The guidance does not tread new ground. Rather, the EEOC clarifies some outstanding questions, while many others remain. In short, neither providing the vaccine to employees, nor requiring proof of receiving the vaccine are considered “medical examinations” under the Americans with Disabilities Act (ADA); however, the employer must be mindful of restrictions around “disability related inquiries” if employees must complete certain pre-screening questions to receive an employer-provided vaccine (including employer-paid vaccines provided by a third party). The EEOC guidance is discussed in more detail below.

Vaccine Group Health Plan Coverage

It is important for employers to remember that the ACA’s preventive care requirements, as amended by the CARES Act, require all non-grandfathered health plans (both self-funded and fully insured) to cover the COVID-19 vaccine within 15 days of it receiving an A or B recommendation by the U.S. Preventive Services Task Force or an applicable recommendation from the CDC. Currently, the requirement to cover the Pfizer BioNTech COVID-19 vaccine became effective January 5, 2021, and the requirement to cover the Moderna COVID-19 vaccine became effective January 12, 2021. While the ACA’s preventive care requirements require plans to cover 100% of the vaccine cost (i.e., no employee cost sharing) provided by any in-network provider, plans were generally not required to cover vaccines provided by non-network providers (or could impose cost sharing in these circumstances).

Now, pursuant to the CARES Act and Interim Final Rules issued on October 28, 2020, coverage for the COVID-19 vaccine must be provided without cost sharing, regardless of whether the vaccine is administered by an in-network or out-of-network provider. In the preamble to the Interim Final Rules, HHS reasons that this is necessary to ensure full access to the vaccine to help mitigate the public health emergency as the vaccine rolls out to high risk or high priority populations before being released to the general public. Plans and issuers are required to abide by these requirements at least through the end of the public health emergency, which is currently scheduled to end on April 21, 2021 unless it is further extended. Once the public health emergency ends, the COVID-19 preventive-services coverage mandate will continue to apply, but only on an “in-network” basis.

ADA Implications of Mandating the COVID-19 Vaccine

Medical Examinations and Disability Related Inquiries

According to the CDC, if an employer administers (or contracts with a third party to administer) the COVID-19 vaccine to employees, it does not amount to a medical examination; however, before administering a vaccine, a health care provider would need to question the employee about their medical history to ensure the vaccine is medically appropriate. It is possible these pre-screening questions could elicit information about a disability, which would implicate the ADA’s provisions regarding disability-related inquiries. If this is the case, then the employer would need to establish the questions are both “job-related and consistent with business necessity,” if they are planning to mandate the vaccine. In other words, the employer would need to reasonably believe, based on objective evidence, that failing to receive the vaccine would pose a direct threat to the health or safety of other employees or individuals.

However, if an employer makes both the pre-screening questions and receipt of the vaccine voluntary, or if the employee receives the vaccine from any third party (i.e., any pharmacy or medical provider), not a provider under contract with the employer, then the ADA’s provisions regarding disability related inquiries is not implicated.

If the employer decides to use a non-contracted third party, the employer could require an employee to show proof of receiving the vaccine by an independent pharmacist or medical provider, and this would not amount to a disability-related inquiry. Therefore, according to the EEOC, employers mandating the vaccine can request employees receive the vaccine elsewhere and show proof of receiving the vaccine, though the employer should ensure the employee does not provide any documentation or information beyond proof the vaccine was administered.

Qualification Standards

If an employee is unable to receive a COVID-19 vaccine due to a disability, then the employer would need to have a “qualification standard” to ensure an employee does not pose a direct threat to the health or safety of the workplace. In essence, the employer would need to show the individual’s failure to vaccinate due to such disability is a direct threat to other individuals because of a “significant risk of substantial harm to the health or safety of the individual or others that cannot be reduced or eliminated without reasonable accommodation.” Therefore, before an employer could take any action, the employer would need to establish there is a direct threat by demonstrating: (1) the duration of any risk; (2) the nature and severity of potential harm; (3) the likelihood that a potential harm will occur; and (4) the imminence of the potential harm.

Even if a direct threat is found, the employer would still be required to determine whether a reasonable accommodation is possible, without undue hardship, which could eliminate or reduce the risk to the workplace.

It is possible an employer can exclude an unvaccinated employee from the workplace if there is a direct threat; however, this does not necessarily mean the employer can terminate the employee. The EEOC reminds employers that the employee may have other rights under applicable EEO laws or other federal, state, or local laws. Further, in assessing risk, the employer would need to consider the amount of its workforce that is unvaccinated and the frequency or type of contact between vaccinated and unvaccinated employees.

Outright termination without considering any reasonable accommodation could result in an employer ADA violation. Instead, employers may need to consider whether an employee can telecommute. If the employee was previously telecommuting during COVID-19 shutdowns, it may be difficult for the employer to make the case that in-person work is required or necessary. Further, employers must consider CDC guidance when assessing whether an effective accommodation that would not pose an undue hardship is available.

Ultimately, if a reasonable accommodation cannot be made without undue hardship, then termination may be permissible. These determinations should be made on an individualized employee basis taking all facts and circumstances into consideration.

Other Implications of Mandating the COVID-19 Vaccine

Sincerely Held Religious Beliefs Under Title VII

Employers also must consider religious accommodations may be necessary for employees who are not vaccinated. Under Title VII, an employer must reasonably accommodate an employee’s sincerely held religious belief absent an undue hardship. Without an objective basis for questioning whether the employee’s beliefs are religious in nature or sincerely held, the employer should not request supporting information or documentation regarding a sincerely held religious belief; however, even if the employee provides supporting information or documentation, the employer is not required to allow the employee in the workplace if a reasonable accommodation is not available or if accommodating the employee would cause an undue hardship to the employer. Specifically, an undue burden in this context means the burden is “more than a de minimis cost or burden.”

Again, this is facts and circumstances specific, and an employer should not automatically terminate an unvaccinated employee without considering whether an accommodation is possible or necessary. Per the EEOC, if an employee cannot receive the COVID-19 vaccine because of a sincerely held religious belief, practice, or observance, then the employee may be excluded from the workplace if there is no available or possible reasonable accommodation.

Genetic Information Nondiscrimination Act (GINA)

The EEOC further advises that Title II of GINA, which prohibits employers from using, acquiring, or disclosing an employee’s or family member’s genetic information, is not implicated if the employer administers the vaccine to employees or requires employees to provide proof of vaccination, because administration of an mRNA vaccine in and of itself does not involve the use of genetic information. However, as discussed previously, if the employer administers the vaccine, then any pre-vaccine screening questions could violate GINA to the extent the screening questions ask about or require the employee (or family members) to provide any genetic information. As such, the vaccine would be more simply executed if the employer makes vaccination “voluntary” and then limits what type of information is received by the employer.

Employer-Provided COVID-19 Vaccine Clinics and Incentives

Employers who intend to offer the COVID-19 vaccine to employees or incentivize employees to receive the COVID-19 vaccine, should consider implications under ERISA and regulations governing wellness plans (HIPAA, ADA, and GINA).

Employer-provided Vaccine

If an employer offers COVID-19 vaccine clinics (either onsite or pays for vaccines administered at an offsite facility) or arranges for the vaccine to be provided through their employee assistance program (EAP), these programs are generally considered to be group health plans under ERISA, which raises certain compliance considerations. While most on-site clinics and EAPs are “excepted benefits” under HIPAA (and thus avoid most ACA requirements), they are still group health plans under ERISA and are subject to COBRA and other requirements, including the need to have a summary plan description (SPD). These requirements (SPD, COBRA) can often be met if an employer ties the vaccine program to group health plan enrollment (meaning only those enrolled in the employer’s group health plan may participate). On the other hand, employers who would like to offer a vaccine program to those not enrolled in the group health plan may want to ensure the program can separately comply with ERISA. Further, if employers want to offer vaccinations on site, or through a third party (as discussed above), this would be permissible under the ADA/GINA as long as the program is voluntary and the employer limits access to pre-screening information.

Incentives

If the employer decides to incentivize employees who receive a COVID-19 vaccine, then the employer would have to comply with applicable rules and regulations governing wellness programs, including HIPAA nondiscrimination rules, ADA wellness regulations, and GINA wellness regulations. Specifically, under HIPAA nondiscrimination rules, benefits must be available on a uniform basis for all “similarly situated individuals” and benefits cannot be limited or excluded based on a participant’s health factor. If the employer offers an incentive, such as a premium reduction, for receiving the vaccine, but some employees are not eligible to receive the vaccine because they have certain health risks or other health factors, then the employer must offer a “reasonable alternative standard” for employees to meet. Further, incentives would be limited to no more than 30% of the cost of single coverage (or family coverage if dependents can participate in the program). Some employers are also contemplating offering “paid time off” as an incentive, in which case the 30% rule would not be implicated.

Please note that on March 11, 2021 President Biden signed the American Rescue Plan Act (ARPA) into law.  Part of the new legislation allows certain employers to obtain a tax credit if they continue to voluntarily extend leave to their employees under the federal Families First Coronavirus Response Act (FFCRA).  This is relevant to employer vaccine incentives because ARPA allows new additional reasons for FFCRA leave, including leave for obtaining a COVID-19 vaccine, leave for recovering from an injury, disability, illness, or condition relating to the receipt of the vaccine, or seeking or awaiting results of a diagnostic test or COVID-19 diagnosis.  As such, if FFCRA covered employers plan to offer qualifying FFCRA time off to obtain a COVID-19 vaccine, the employer may be able to receive tax credits for such leave offered through September 30, 2021. See our article here for more.

Additionally, as explained in earlier sections regarding EEOC guidance on mandating the vaccine, the ADA and/or GINA and, therefore, the wellness regulations associated with each, may be implicated if an employer receives too much information when substantiating that an employee received the vaccine elsewhere, or if the employee has to explain they are not eligible to receive a vaccine due to health or risk factors. Under both ADA and GINA rules, wellness program participation must be “voluntary,” which means the employer’s incentives for receiving the vaccine must not be so great as to make the employee feel compelled to participate. Unfortunately, at this point, it is unclear what amount of incentive would make participation involuntary given the EEOC’s recent withdrawal of the proposed wellness regulations, which limited incentives for certain wellness programs to a de minimis amount. Until new regulations are implemented, if the ADA and/or GINA are implicated, employers should take a reasonable approach in evaluating their program to ensure the program is truly voluntary for employees.

Conclusion

For employers outside of the health care industry, this analysis is predominantly academic in nature at this time, as the vaccine is not widely available to the public or workforce; however, employers should consider the EEOC’s guidance as they evaluate their plan of action once the vaccine is more widely distributed. At that time, employers could potentially require employees to receive the COVID-19 vaccine; however, without a mandate or signal that they should, or are required to, enforce a mandate under applicable law, employers may be well-served in refraining from implementing a mandate unless they are in certain high-risk industries.

If an employer does mandate employees receive the vaccine, the employer must be mindful of the ADA, Title VII, and GINA, and should engage in an individualized analysis of the facts and circumstances of each unvaccinated employee with counsel. Further, the employer should ensure its vaccine requirement serves some business purpose. For example, if an employer has a mostly remote workforce and remote employees do not engage in business travel or directly engage with clients, requiring the vaccine would not likely serve a business purpose.

Finally, if an employer directly administers vaccines (or contracts with a third party to administer the vaccine) and plans to mandate vaccination, the employer should have the pre-screening questions reviewed to ensure the questions do not include disability-related or genetic questions. If the employer plans to offer the vaccine on a voluntary basis, the employer should limit their access to any pre-screening information and should ensure the program or any incentives offered for receiving the vaccine comply with ERISA and/or regulations governing wellness plans.

Additional Resources

Please note that certain states and localities may also issue their own guidance/regulations as the COVID-19 vaccine becomes more widely available. Employers may want to check in with their employment law counsel for the most up-to-date state and local guidance that may be applicable to their operations. We will continue to post helpful links below as more guidance becomes available.

Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2021 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved

Joanna Castillo – Joanna is the Director of Client Compliance at Sequoia Consulting Group, where she works with our clients to optimize and streamline benefits compliance. In her free time, Joanna enjoys live music, college football, travel, and walking her dog in Golden Gate Park.