COVID-19 vaccination premium discounts must be offered as part of a wellness program

The U.S. Departments of Labor, Health and Human Services, and Treasury have issued guidance that addresses rules regarding premium incentives for COVID-19 vaccinations and rapid coverage of preventive services for COVID-19.

The document clarifies that a group health plan (or health insurance issuer offering coverage in connection with a group health plan) may offer participants a premium discount for receiving a COVID-19 vaccination. But plans generally cannot use vaccination status as a condition for benefits eligibility, and any discount must comply with final wellness program rules.

Under those rules, premium discounts that require people to obtain a COVID-19 vaccination would be considered an activity-only wellness program, which is a type of health-contingent wellness program. These programs must comply with five nondiscrimination criteria, including an incentive limit and a requirement to offer a reasonable alternative standard in some cases. The maximum reward or penalty under a health-contingent wellness program that is part of a group health plan (and is not related to tobacco use) is 30% of the cost of coverage.

The guidance document also says that, effective Jan. 5, 2021, plans and issuers must cover without cost sharing, any COVID-19 vaccines and their administration once the particular vaccine is authorized under an emergency use authorization (EUA) or approved under a biologics license application (BLA). This coverage must be provided consistent with the scope of the EUA or BLA, including any amendment. That includes allowing for an additional dose to certain individuals, booster doses, or the expansion of the age demographic for whom the vaccine is authorized.