By: HUB’s EB Compliance Team

The government has published new guidance on how to promote COVID-19 vaccinations using a wellness program. Specifically, on October 4, the Departments of Health and Human Services, Labor, and Treasury (the “Departments”) released additional FAQs regarding the coverage of COVID-19 vaccines and wellness incentives. Although the FAQs contain few notable surprises, they do provide some helpful confirmation and clarifications.

A Quick Jab

Under the CARES Act, plans are required to cover vaccines and other preventive services without cost-sharing within 15 business days after they are recommended by a relevant governing body. Back on December 12, 2020, the Advisory Committee on Immunization Practices (the “ACIP”), which is one of those governing bodies, recommended the use of vaccines against COVID-19 within the scope of any “Emergency Use Authorization” by the FDA or “Biologics License Application” by the FDA. The ACIP action triggered the CARES Act 15-day coverage rule and thereby mandated employer group health plan COVID-19 vaccination coverage by January 5, 2021 (apart from grandfathered plans, which are not required to cover preventive care services). 

Importantly though, these initial “Emergency Use Authorizations” have gradually changed and evolved, such as expanding to include children ages 12-17 for the Pfizer vaccine, and providing for booster shots for certain groups. When do these changes have to be implemented? Do plans also get 15 business days to start reflecting these types of changes?

According to newly released federal guidance the answer is no; the vaccines must be covered immediately in accordance with these changes. In other words, as soon as the FDA authorizes booster shots, additional age groups, or other changes, plans must cover the vaccines and their administration immediately. The Departments take the position that additional delays in vaccination coverage won’t be allowed.

This also means that subsequent ACIP recommendations are not necessarily relevant for when the plan must provide coverage for additional groups or additional vaccinations. Instead, the trigger for when the plan must provide coverage, and what the plan has to cover, reflect whatever the FDA authorizes for vaccination usage.

Since this may have been unclear before, the Departments chose not to apply this clarification retroactively. Although the good news for plans and plan sponsors is that this will only be enforced going forward, this also means that plans and plan sponsors must pay special attention to FDA Emergency Use Authorization and Biologics License Application announcements.

Getting Vaccinated is an Activity

On the wellness side, the FAQs confirm that getting vaccinated constitutes an activity-only wellness program under the HIPAA/Affordable Care Act wellness rules. The FAQs summarize the wellness program requirements that would apply. Even for activity-only based wellness, the Departments’ wellness rules impose a reasonable alternative standard obligation for anyone for whom it is unreasonably difficult or medically inadvisable to attempt to satisfy the target activity. Very conspicuously, in an example, the Departments’ FAQ offers a potential reasonable alternative standard for getting a COVID vaccine: “attesting to compliance with CDC’s mask guidelines.”

Because a vaccine incentive program tied to the health plan is an activity-only program under the HIPAA/ACA rules, that means the incentive/surcharge limits under those rules (generally, 30% of the total cost of coverage) apply to the incentive. Employers considering an incentive program also need to consider the Americans with Disabilities Act and other employment law rules that could potentially apply (visit our Vaccine Resource Center for more details on those rules).

Consistent with its earlier rules, the new FAQs point out that this incentive is treated as “not earned” (or if the “incentive” is expressed as a surcharge, the penalty is treated as if it applies) for purposes of the ACA Employer Mandate. In other words, this rule is designed to ensure the coverage is affordable for ACA purposes even for anyone that failed to participate. For example, an employer charging $200/month extra for not being vaccinated must treat those dollars as part of the employee contribution for affordability purposes. Employers who are subject to the ACA Employer Mandate should take this important distinction into account in setting an incentive or surcharge for unvaccinated employees.

Finally, the FAQs confirm that a health plan may not condition eligibility or benefits on being vaccinated. Therefore, employers cannot require employees or dependents to be vaccinated to enroll in coverage. Similarly, they cannot deny benefits under the plan based on whether the employee is vaccinated against COVID-19.

Note that while the FAQs only address vaccination against COVID-19, presumably the same analysis would apply to a program that provides an incentive, or imposes a surcharge, for receiving other vaccinations, like flu shots.


Employers should work with their carriers and TPAs to make sure they are complying with the requirement to cover vaccines immediately on a change in authorization. Additionally, employers that want to use a wellness program to encourage vaccination should consider their approach. If the goal is to reduce health plan costs, a wellness program could be an appropriate way to go. On the other hand, if the goal is to promote workplace safety, other approaches may be more effective. Additional suggestions and guidance are available through HUB’s Vaccine Resource Center.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory


Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only, and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.