COVID vaccine incentives pay off, but who can pay for them?

Approaches differ as area employers try to keep workforces safe.

Cash incentives have encouraged people to get the COVID-19 vaccine, large employers and local public health officials said, but public health funds for incentives have dried up and smaller businesses say they can’t afford them amid this tight labor market.

The vaccine is key to moving past the COVID-19 pandemic, public health leaders said.

More than 65% of eligible Ohioans are vaccinated. Local hospital officials say nearly nine out of 10 of those hospitalized in intensive care units for COVID-19 in the most recent surge and 84% of those who died were unvaccinated.

Getting employees vaccinated keeps workers healthy, helps control health insurance costs and reduces business disruptions, businesses leaders said.

“Primarily, it’s about making sure your workforce is safe,” said Pat Tiberi, president of the Ohio Business Roundtable. “No matter what line of business you are in today, you can’t find enough people to work.”

The business roundtable is composed of CEOs of the state’s largest and most influential businesses.

“The majority of our members are not mandating the vaccine,” Tiberi said. “They’re strongly encouraging it, they’re incentivizing it. We have employers who are doing cash incentives. We have employers who are doing day-off incentives, different types of contests internally.”

Locally, this includes Cleveland Cliffs. The company’s Middletown Works facility achieved a 75% vaccination rate among its roughly 2,400 employees. The surrounding ZIP code is 55% vaccinated.

To do this, the company paid employees $1,500 to get vaccinated. They added another $1,500 if at least 75% of employees at each location get vaccinated. The incentive caused the vaccination rate for the 25,000 employees of the Cleveland-based company to double.

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Members of the Dayton & Montgomery County Public Health, prepare for the COVID-19 vaccination clinic Wednesday, April 28, 2021 at the Sinclair College Centerville, located at 5800 Clyo Rd. MARSHALL GORBY\STAFF

Members of  the Dayton & Montgomery County Public Health, prepare for the COVID-19 vaccination clinic Wednesday, April 28, 2021 at the Sinclair College Centerville, located at 5800 Clyo Rd. MARSHALL GORBY\STAFF

Combined ShapeCaption
Members of the Dayton & Montgomery County Public Health, prepare for the COVID-19 vaccination clinic Wednesday, April 28, 2021 at the Sinclair College Centerville, located at 5800 Clyo Rd. MARSHALL GORBY\STAFF

“I implore both my steel producing peers and all other companies who have not already done so to implement similar programs, in order to defeat this nasty virus in our country once and for all,” said Cleveland Cliffs President Lourenco Goncalves in a news release last year.

Kroger adopted a carrot-and-stick approach. The company offers $100 bonuses for workers to get vaccinated. It also offered customer and employee giveaways to encourage the shots, including five $1 million checks and free groceries. But also this year Kroger reportedly started charging salaried, nonunion employees $50 more per month for their health insurance if they aren’t vaccinated, and denying extra paid leave for unvaccinated employees who get COVID. Kroger officials did not respond to a request for comment.

Honda, another of the Dayton region’s largest employers, recently started letting employees who become vaccinated receive either a $400 bonus or have the company donate $600 to a food pantry.

“As the COVID-19 crisis has evolved over the past 23 months, Honda’s approach has remained consistent and steadfast with a focus on taking measures intended to ensure the health and safety of Honda associates and their families,” said Honda spokesman Chris Abbruzzese.

Incentives spike vax rates

Ohio adopted a plan similar to Cleveland Cliffs for most of its roughly 49,000 employees. The state offered $100 for employees to get the vaccine, and $25 for each spouse on their insurance plan. The state later added that employees could get another $300 if 65% of their agency’s employees were vaccinated, and another $600 if 85% got the shot. This means each employee could get a total of $1,000.

Employees had to submit paperwork by Jan. 5, and officials with the Ohio Department of Administrative Services say they are still totaling the numbers. They say roughly 32,884 employees and 11,041 spouses have received the incentives. DAS says about 67% of eligible state employees took part in their incentive program, and additional employees may be vaccinated but did not take part in the program.

DAS did not provide numbers on how many agencies are expected to reach the 65% or 85% thresholds.

“The number of employees applying for the incentive was very promising following the initial announcement of the incentive in August,” DAS spokeswoman Melissa Vince said. “We then saw a noticeable increase since the announcement of the tiered incentive program.”

Employees with three state agencies fall under federal mandates: the Department of Mental Health and Addiction Services, the Department of Developmental Disabilities and the Department of Veterans Services. Those agencies must have 80% of their employees vaccinated — or file a medical or religious exemption — by Feb. 14, and must maintain a 100% compliance rate by April.

Further evidence that incentives encourage people to get vaccinated comes from Public Health–Dayton & Montgomery County. The county health department took part in a program funded by the Ohio Department of Health that offered $50 and $100 gift cards to people getting vaccinated from Sept. 21 to Dec. 30.

Vaccinations nearly doubled. During the first week of the program, 772 people got their first dose, compared to 776 first doses in the preceding nine weeks, Montgomery County health department officials said.

“Anecdotally, many individuals coming for first vaccinations while we were offering the gift cards said that the gift cards were the reason that they were getting vaccinated that day,” said Dan Suffoletto, Public Health spokesperson.

The program distributed 3,690 gift cards to area residents getting their first dose, totaling $359,500.

The Ohio Department of Health allocated $4.9 million in federal funds to 39 local health departments — including seven in southwest Ohio — for incentive programs last year. The state agency also allocated $1 million to a smaller number of health departments in January and has no plans for a statewide incentive program this year.

Some ongoing incentive programs still exist. Darke County is offering $100 gift cards to encourage people to get their first shot at vaccine clinics on Feb. 17 and 24. Ohio Medicaid managed care providers, including Dayton-based CareSource, will offer $100 gift cards through June 2022 for members age 5 and older who get their first shot.

ExploreCOVID vaccination campaign includes $100 gift cards, young Dayton influencer

Small businesses face ‘Catch-22′

As the omicron wave surged earlier this year, the Dayton Area Chamber of Commerce, Dayton Development Coalition and Downtown Dayton Partnership published a joint letter urging the business community to focus on COVID-19 safety.

The letter noted that the overwhelming majority of COVID-19 hospitalizations, intensive care admissions and deaths were among the unvaccinated.

Chamber of Commerce President Chris Kershner said each employer should decide for themselves how best to keep their workplaces safe. The chamber, he said, offered financial incentives for its staff to get vaccinated; he wouldn’t say how much.

“We’re encouraging businesses to maintain the safest working environment that they can,” he said. “Whatever is best for them is what we’re encouraging them to do.”

Small businesses face a “Catch-22,” according to Roger Geiger, Ohio executive director of the National Federation of Independent Businesses.

The NFIB fought in court a proposed federal mandate for large employers that would have required vaccinations or frequent testing. The U.S. Supreme Court blocked the federal mandate for large employers but allowed it for most health care workers.

The federation believes each business should have the ability to do what’s best for them. Many of its members are vaccinated, and Geiger personally encouraged people to get vaccinated.

But he said small businesses are trying to recover from the pandemic-induced recession. The labor shortage has them struggling to fill jobs, and even asking employees about vaccination status is an obstacle to that.

“Very candidly, our members are not trying to make it more difficult for people to work,” Geiger said. “It just makes it really hard if you create more complications for folks to be hired.”

Meanwhile the pandemic still disrupts business. “It continues to have a major impact because it’s disrupting the labor pool, it’s certainly part of the supply chain crisis, and it’s part of inflation concerns,” he said.

Local business owner

Clara Osterhage of Centerville just opened her 82nd Great Clips location and has more than 600 employees. About a third are vaccinated, based on an informal survey she did.

COVID has forced her to adjust hours at some of her salons as about 60 employees at one time were off on quarantine.

But Osterhage doesn’t believe she has the right as an employer to force people to make a decision about their health.

As for incentives, she said with the rising costs of labor and supplies she can’t afford to start incentivizing COVID vaccines, especially since it’s unclear how often boosters will be necessary.

So she offers information to her employees about the vaccine and talks about why she got vaccinated.

“I’m doing what I think a really smart businesswoman does, I talk about it,” she said. “I think that’s the best, smartest business thing I can do right now.”

Joyce Whitaker, chapter president for the Miami Valley Human Resources Association, said some smaller Dayton-area businesses have offered vaccine incentives like paid time off, cash incentives or gift cards.

“If they can afford to do so, the answer is yes,” she said.

But it’s more the exception than the rule, she said, as some businesses don’t have the resources to track employee vaccine status and deal with exemptions and pushback — while struggling just to fill jobs.

“Every business wants to keep their employees safe, it’s a matter of what makes the most sense for them and how they are going to continue to be profitable,” she said.

Some mandates persist

Some of the area’s largest employers still fall under federal mandates for military members and health care workers. This includes Wright-Patterson Air Force Base, where officials recently said about 97% of active duty servicemembers and more than 90% of the civilian workforce is vaccinated.

Behind the base, health care is the area’s largest employer, most notably Premier Health with 13,000 employees and Kettering Health with 14,000.

Federal rules require health care employees of organizations that received Medicare and Medicaid, both clinical and nonclinical, to be vaccinated or have a medical or religious exemption.

Questions submitted to the two hospital systems were answered with a joint response from the Greater Dayton Area Hospital Association.

GDAHA Vice President Lisa Henderson wrote that the compliance rate across the two systems — the percentage of employees who are vaccinated or filed an exemption — is “in the high 90s.” They would not comment on whether incentives were being offered.

“We can say that the incredible vaccination rate of employees across both organizations clearly demonstrates their tireless commitment to each other, their patients and the broader community,” she said.

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