Delta Air Lines is raising health care costs for employees who insist on staying unvaccinated.
The airline said that as of November 1, unvaccinated staff will pay up to $200 a month more for their company health insurance, depending on the coverage. It will also limit the number of sick days unvaccinated employees are allowed to take if they contract Covid-19.
It will also require unvaccinated employees to take weekly Covid tests.
Delta (DAL) CEO Ed Bastian made the announcement in a company-wide memo, which the company shared with CNN.
“While we can be proud of our 75% vaccination rate, the aggressiveness of the variant means we need to get many more of our people vaccinated, and as close to 100% as possible,” said Bastian.
“The average hospital stay for Covid-19 has cost Delta $50,000 per person,” said the airline. “This surcharge will be necessary to address the financial risk the decision to not vaccinate is creating for our company.”
Since the rise of the Delta variant, whose name has nothing to do with the airline, all cases of Covid-19 among Delta employees have been among the unvaccinated, according to the company.
“This is not just costing lives, this is costing us financial resources as well,” Bastain said on CNN Wednesday.
Delta is only now returning to profitability after losing $12.9 billion since the start of 2020.
Delta says starting September 12, any US employee who is not fully vaccinated will be required to take a weekly coronavirus test “while community case rates are high.” The airline says those with a positive result will need to isolate and remain out of the workplace.
And there will be new limits for unvaccinated workers who become sick with Covid-19, or who can’t work due to a positive test.
Under legislation passed by Congress last year, Delta employees who are sick get up to 14 days of “Covid pay protection” before they have to start using their standard company sick days. That will end for unvaccinated employees as of September 30, Delta said.
“In compliance with state and local laws, Covid pay protection will only be provided to fully vaccinated individuals who are experiencing a breakthrough infection,” said the memo to employees.
The airline is also requiring unvaccinated employees to wear masks in “all indoor Delta settings.” A federal mask mandate for air travel, both passengers and staff, remains in place through at least January 18, 2022.
Delta has stopped short of the vaccine mandate that rival United Airlines (UAL) imposed on its US employees. The nation’s other two major airlines, American and Southwest, have also stopped short of a mandate.
But a number of other household-name companies have begun implementing mandates in response to the surge of Delta variant covid cases, including major tech companies such as Google (GOOG) and Facebook (FB), and Wall Street banks such as Goldman Sach (GS)s and Morgan Stanley (MS).
But many other employers are reluctant to impose vaccine mandates, concerned about losing employees if they impose a mandate. Among unvaccinated workers asked what they would do if their employer instituted a mandate, 50% said they’d leave their job, according to a June survey by health policy think tank KFF.
“Every company has to make its own decision [on mandates] for its culture, its people, what works according to its values,” Bastian told CNN. “I think these added voluntary steps, short of mandating a vaccine, will get us as close to 100% as we can.”
Scott Kirby, the CEO of United, told CNN in a recent interview that his airline’s vaccine mandate has produced some push back from employees who are opposed the vaccine. But he said he was pleasantly surprised that the overwhelming majority of employees who contacted him about the mandate supported the requirement.
“The reason we did this is I know that a year from now, even if there are some people who are still unhappy with me about doing this, there will be some people who are alive who otherwise wouldn’t have been because we required a vaccine,” Kirby told CNN.
United is offering employees who do get a vaccine an extra day of vacation and $50.
“With the alarming rise of Delta variant covid cases companies face the tough decision of providing a safe workplace by using carrots and sticks to get employees to vaccinate or impose a vaccine mandate at the risk of alienating and possibly losing some employees,” said Joe Holt, professor of business ethics at Notre Dame. “It seems more likely that a big stick will motivate employees more than small carrots will.”
Holt says he would be concerned if the logic were extended and companies started charging higher health insurance rates or limiting sick days for employees who smoke or are overweight.
“But that’s a yellow light, to proceed with caution,” he said. “I don’t know if it’s a red light to this case, given the gravity of the Covid-19 threat.”
He said in those cases, the risky behavior doesn’t pose the threat to other employees that an unvaccinated employee poses to their coworkers.
“This is an important social responsibility for companies to resolve,” Holt said. “Lives are at stake.”
Correction: An earlier version of this story misidentified the average cost for Delta employees hospitalized with Covid-19. It is $50,000 per person.