The COVID Delta variant has left employers questioning whether to institute a vaccination policy in the workplace. Some high-profile companies and certain industry sectors are either mandating or encouraging the vaccine while others are leaving inoculation up to individual employees. It’s important for employers to understand how a vaccination policy can potentially impact workers’ compensation costs in addition to the broad range of employment laws and regulations that arise with a vaccine mandate.
Workers' Compensation and a Vaccine Policy
Vaccine mandates may act to both decrease and increase a company’s workers’ compensation costs. Protection provided by the vaccines should serve to improve safety and, if effective, decrease the likelihood of serious illness or death and ultimately the cost of a workers’ compensation claim if it were determined that the employee was infected with COVID-19 in the workplace and if the virus were covered. (Many workers’ comp state statutes exclude “ordinary diseases of life,” however, exceptions were made for COVID-19 in several states for certain employees and industry sectors at the onset of the pandemic and such exceptions could be instituted again.)
On the flip side, when an employer mandates a vaccination their liability exposure under workers' compensation increases as a result of possible adverse reactions or the development of long-term health issues from the vaccine. There have been almost ½ million cases of various reactions reported to the VARS Database, due to the COVID-19 vaccines. While pharmaceutical companies have been provided immunity waivers, the workers’ compensation system could hold employers liable if an employee were able to establish that the vaccine (mandated by the employer) caused him or her harm. This is not without precedent, because employers who have mandated flu vaccines have been found responsible for adverse reactions even in cases where the vaccine is fully approved by the FDA and known to be very safe with long-term testing and years of use. Also, some legal experts have stated that since an employer-mandated vaccine is considered a part of work, under most state laws, an adverse reaction would be covered by workers' compensation.
On August 23, 2021, the FDA approved the Pfizer-BioNTech vaccine called Comirnaty. It is important to understand that the Pfizer-BioNTech vaccine commonly being used in the US is not the Comirnaty vaccine. Although, the Comirnaty Pfizer-BioNTech vaccine is substantially similar to the commonly used Pfizer-BioNTech vaccine there is an important legal difference (Hinton, 2021*). The difference could impact an employer’s liability because the commonly available Pfizer-BioNTech vaccine provides comprehensive legal immunities to the manufacturer and medical community whereas the Comirnaty vaccine does not provide the same protections. Subrogation for an adverse event is not an option under the Pfizer-BioNTech vaccine currently available.
For now, the Occupational Safety and Health Administration (OSHA) does not require that adverse vaccine reactions be reported if employers mandated inoculation although initially the agency did require such documentation. This led to confusion over how employers with mandated versus voluntary vaccine policies should proceed. While OSHA changed its guidance so that employers are not required to report adverse vaccine reactions, its initial directive muddied the waters putting into question whether those employers providing incentives only could still be construed as mandating.
Further potentially complicating vaccine policies is for certain industries to require vaccines. For example, the Biden administration recently called for nursing homes to require staff be vaccinated in order for facilities to continue to receive Medicare and Medicaid reimbursements. This demonstrates the importance for all businesses to ensure their policies and programs follow federal and state law and are fully aware of all consequences their choice may bring.
Beyond Workers' Comp: Liability Issues with Vaccine Mandates
The Equal Employment Opportunity Commission (EEOC) has stated that employers may create a vaccine mandate provided they allow reasonable accommodation for disabilities and religious beliefs. In addition, the U.S. Department of Justice (DOJ) recently issued an opinion stating that the Food, Drug and Cosmetic Act does not prohibit employers from mandating vaccinations for COVID-19, even while such vaccinations are available only through Emergency Use Authorizations (EUAs).
However, it’s important to note that laws vary from one state to another and each state may impose its own restrictions. Employers should research and follow state laws. Employers also must be mindful of various discrimination laws that may require exceptions, such as the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Pregnancy Discrimination Act, and similar state or local laws.
At Prescient National, we suggest all employers receive legal advice from an attorney on the subject of vaccination. In addition, contact our Loss Prevention representatives for more information.
*Hinton, D. (2021, August 23) FDA letter to Pfizer, page 5
