Delta Air Lines is raising health insurance premiums for unvaccinated employees by $200 a month to cover higher Covid costs

Delta Air Lines CEO Ed Bastian notified employees Wednesday that they will face $200 monthly increases on their health insurance premiums starting Nov. 1 if they aren’t vaccinated against Covid-19, citing steep costs to cover employees who are hospitalized with the virus.

Unvaccinated employees will face other restrictions, including indoor masking effective immediately and weekly Covid-19 tests starting Sept. 12, the Atlanta-based airline said in announcing new Covid policies for employees.

The measures are the latest attempt by a U.S. corporation to drive up Covid vaccination rates. Delta stopped short of an outright mandate like rival United Airlines established earlier this month. Delta, which self-insures its employees, stands out in its plans to raise premiums for unvaccinated workers to cover the higher costs of insuring employees who get Covid.

“The average hospital stay for COVID-19 has cost Delta $50,000 per person,” Bastian said in an employee memo. “This surcharge will be necessary to address the financial risk the decision to not vaccinate is creating for our company. In recent weeks since the rise of the B.1.617.2 variant, all Delta employees who have been hospitalized with COVID were not fully vaccinated.”

United Healthcare administers the airline’s health insurance plans. The change in approach was Delta’s initiative.

Delta also said starting Sept. 30, “in compliance with state and local laws, COVID pay protection will only be provided to fully vaccinated individuals who are experiencing a breakthrough infection.” Unvaccinated employees who contract Covid, without exemptions, will have to use their sick days after that.

CEO Bastian said that about 75% of Delta’s roughly 75,000 employees are already vaccinated and that “aggressiveness of the [delta] variant means we need to get many more of our people vaccinated, and as close to 100 percent as possible.”

Delta earlier this year started requiring new employees to be vaccinated against Covid.

On Monday, the U.S. Food and Drug Administration gave full approval to the Pfizer vaccine though a Delta spokeswoman said the plan had been in the works for weeks and that the timing was coincidental.

“Given the full FDA approval of the Pfizer vaccine, the [President Joe Biden’s] strong statements asking employers to require employees get vaccinated, and the spike in new COVID cases around the US, we are likely at a tipping point for companies taking stricter measures to motivate employees to get vaccinated,” Wade Symons, a partner and group leader for regulatory resources at human resources consulting firm Mercer, said by email. “We anticipate more companies will announce vaccine mandates and surcharges in the coming weeks.”

Alaska Airlines earlier this month told employees that it was considering requiring employees to be vaccinated against Covid but that it would only do so after one of the vaccines received full approval. Frontier Airlines said this month that employees have to be vaccinated or test regularly for Covid. American Airlines, Southwest Airlines and JetBlue Airways have encouraged employees to get vaccinated.

Delta, which has the fewest unionized employees of the large U.S. airlines, said it informed the Air Line Pilots Association, their aviators’ labor union, of the changes.

The union on Wednesday received dozens of comments from pilots, some who oppose the surcharge and others who applauded the measure, according to Delta pilot and union spokesman Christopher Riggins.

About 8% of Delta’s roughly 12,000 pilots are exempt from the $200 surcharge even if they are unvaccinated because they had previously elected a health care plan that comes with higher premiums. That health care plan had been negotiated as part of their contract. A change would require Delta to negotiate with the union, which has said most of the pilots are vaccinated.

The union has repeatedly said vaccinations should be voluntary for its members.

The union “has consistently advocated to maintain the right of each individual pilot to consult with his or her medical provider regarding COVID-19 vaccinations or booster doses,” it said in a statement. “While the Delta [master executive council] respects Delta Air Line’s efforts to mitigate the impact of breakthrough COVID-19 variant infections, it needs to bargain with the Delta MEC over any employer-mandated vaccination for pilots.”

Airlines have been among the hardest-hit companies by the pandemic, and the rise of the Covid delta variant is already driving down a recent recovery in bookings, according to airlines including Southwest, American and Spirit.

Correction: This article was updated after Delta Air Lines corrected its average medical costs of an employee hospitalized with Covid. It is $50,000 per person.