Nevada will be the first state in the U.S. to charge state workers enrolled in public employee health insurance plans a surcharge if they aren’t vaccinated against the coronavirus.

Earlier this month, the state Public Employees’ Benefit Program Board voted to charge unvaccinated workers up to US$55 per month to offset the costs of testing that those who haven’t received shots are required to undergo in certain workplaces.

The coronavirus pandemic has been a burden for everyone, but this particular burden — the testing — should be shouldered by those who refuse to be vaccinated, said DuAne Young, policy director for Nevada Governor Steve Sisolak.

Read: Employers enforcing rules for unvaccinated employees

Surcharges for state workers and adult dependants on their insurance plans will go into effect in July 2022. Since the start of the coronavirus pandemic, public sector plans have covered all coronavirus-related testing and treatment for state workers. Though many other plans stopped completely covering testing when vaccines became widely available, insurance plans for state workers have continued to pay for it in entirety.

In Nevada workplaces where less than 70 per cent of employees have been vaccinated, employees are required to be tested weekly to prevent the spread of the virus. Although U.S. President Joe Biden’s workplace mandates face court challenges, if they go into effect, all unvaccinated workers will have to submit to weekly testing — a development that would significantly increase the state’s costs.

Officials said coronavirus-related claims filed by state workers were on track to surpass $6 billion in 2021. By charging state workers and their dependants age 18 and older, the plans will help offset the cost of testing people who refuse to be vaccinated.

Laura Rich, the PEBP’s executive officer, said some public sector plans — including for workers at the Dallas Fort Worth International Airport — have imposed surcharges on unvaccinated employees, but, to her knowledge, Nevada would be the first state to impose a systemwide surcharge on public employee plans.

Read: Employers grappling with worker shortages amid vaccine deadlines

She compared the premium to a smoking surcharge and said it would help underwrite roughly $18 million in annual testing costs. With thousands of unvaccinated workers, she said administrators had to decide the extent to which tax dollars should pay for the medical costs of those who chose not to get vaccinated.

“PEBP is largely a taxpayer-funded plan outside of employee premiums,” she said. “Since we do not have the ability to adjust the state subsidy portion outside of a legislative session, we have no choice but to look at other options.”

The surcharge presented liberal-leaning labour unions with a dilemma. It pit a policy intended to encourage vaccination against increasing health-care costs for workers — a longtime centrepiece of their advocacy. Labor lobbyists from the American Federation of State, County and Municipal Employees and the Nevada Faculty Alliance testified in neutral about the surcharge proposal.

Read: Vaccine policies gaining steam with small-, medium-sized employers

Tom Verducci, a board member who represents state workers’ deferred compensation plans, voted against the surcharge and said he opposed the idea of imposing additional costs on workers regardless of the reason. “State employees have been hit very hard with no raises over a number of years. . . . I have a hard time with this one.”

Nevada estimates roughly 5,000 state workers and 1,250 employees of the Nevada System of Higher Education are unvaccinated. The state hopes incentives and penalties like the surcharge will convince more people to get vaccinated, said Rich.

In August, Delta Air Lines said it would charge employees on its company health plan $200 a month if they fail to get vaccinated against the coronavirus, a policy the airline’s top executive said was necessary because the average hospital stay for the virus costs the airline $40,000.

Read: Delta Air Lines charging unvaccinated employees on company health plan US$200 per