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. The airline, 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 $40,000 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.”

Delta is self-insured and 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 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 Air Lines spokeswoman said the plan had been in the works for weeks and that the timing was coincidental.

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.

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.

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