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Employers nationwide are considering vaccine incentives and potential penalties for workers who remain unvaccinated against Covid-19. Recent news coverage indicates that many employers across the country are considering levying premium surcharges for employees who participate in their company's healthcare plan and choose to remain unvaccinated. There are many factors under consideration with these kinds of decisions, but there is a potential compliance and fiscal wrinkle that may not always be on radar—the Affordable Care Act (ACA) ramifications related to how those surcharges, or penalties, affect the affordability of an employer's health plans.

The ACA requires "applicable large employers" (ALEs) to offer affordable healthcare benefits to eligible employees or pay a penalty. Within the ACA law lie very specific rules governing the design of wellness programs, especially regarding incentives and penalties (premium surcharges).

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