Delta Air Lines is hiking health insurance premiums for unvaccinated employees by $200 a month

Delta Air Lines will be hiking health insurance premiums for its staffers who are unvaccinated against COVID-19, effective November 1, the commercial airline giant said Wednesday.

The new rules were shared in a memo to employees from CEO Ed Bastian. The company cited steep costs to cover workers who become hospitalized with the virus, which can total around $40,000 per person for the airline, according to the memo. “This surcharge will be necessary to address the financial risk the decision to not vaccinate is creating for our company,” Bastian wrote. “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.”

In addition, starting September 30, the company will only provide COVID pay protection to fully vaccinated employees experiencing breakthrough infections, whereas unvaccinated workers who contract the illness—and who do not have medical or religious exemptions—must use sick days during recovery.

The more aggressive policy comes just days after the vaccine developed by Pfizer and BioNTech received full approval from the U.S. Food and Drug Administration, although a Delta spokesperson told CNBC that it had actually been in the works for weeks and the timing was purely coincidental. According to Bloomberg, Delta is the first major U.S. company to levy such a penalty to encourage inoculations.

While some believe the vaccine’s full approval will pave the way for a flurry of mandates from businesses and institutions, Delta itself has stopped short of requiring it for its 68,000 employees. Among its peers, rival carrier United Airlines imposed a mandate earlier this month, and Alaska Airlines has said it would consider doing so if a vaccine was fully approved. Frontier Airlines has said employees must either be vaccinated or submit to weekly testing.