Considering charging a premium surcharge for unvaxxed staff? Check ACA rules first.

Employers are increasingly turning to health insurance premium surcharges to incentivize more COVID shots in employees' arms. Delta, for example, is charging unvaxxed workers an extra $200 per month. If you are considering this tactic, be aware that the surcharge may bump up against Affordable Care Act requirements.

If you are required to provide ACA coverage, you have probably aligned your employee premium contribution rate to the "affordable" formula. That may not leave you much room to impose a surcharge large enough to persuade workers to get their shots.

Under the ACA, an employee's contribution for self-only coverage for the least expensive plan can't exceed 9.83% of his or her household income. The IRS lets employers pick from three ways to calculate affordability: * The monthly federal poverty line multiplied by the percentage ($105.51 premium for 2021).

* Wages from the employees' W-2 Box I multiplied by .0983, divided by 12. Example: ($30,000 * .0983) / 12 =...