vitality active rewards with apple watch faq · • mall, our online mall with fitness devices and...

©2018 The Vitality Group Proprietary and Confidential 1

Vitality Active Rewards, Mall

and Apple Watch — FAQ Handbook —

Internal Use Only

Updated January 8, 2018

WWW.VITALITYGROUP.COM

200 WEST MONROE STREET, SUITE 1900,

CHICAGO, IL 60606


OVERVIEW/UPDATE

This document provides background on three incentive programs that Vitality clients can use and that we recommend

be used together for maximum engagement:

• Vitality Active Rewards, a weekly physical activity gamification program

• Mall, our online mall with fitness devices and gift cards (Amazon, Charity Choice, hotels.com, etc.) that can be

purchased with Vitality Bucks

• Apple Watch, which encourages physical activity on a monthly basis, enabling Vitality members to purchase an

Apple Watch for a low activation fee, with subsequent payments based on the amount of standard and

advanced workouts completed each month

The marketing of all three programs as a recommended “pitch” is for new Vitality clients in the second quarter of 2018

and beyond. Unless otherwise noted in a specific question, this FAQ is related to a new pricing structure for Apple Watch

and other changes aimed at keeping overall incentive costs at a reasonable level.

When initially launched in the U.S., Vitality Active Rewards was paired with Apple Watch. Vitality Mall was a separate

incentive. At the time Vitality Active Rewards with Apple Watch (previously called VARWAW internally) was rolled out, a

client could not have Active Rewards without Apple Watch, or Apple Watch without Active Rewards. Now, while it is

recommended that both – plus Mall – be sold as Vitality’s recommended incentive plan, it is possible for a client to select

any one or two of the three, if desired.

Changes outlined below and in this document are intended to achieve two goals for new clients:

• Make the Apple Watch offering more affordable to employers to increase take-up of this option.

• Increase the number of members who have access to Active Rewards, which data shows can significantly

increase the physical activity of members.

Product changes being made for new clients who launch in May 2018 or later include:

• Bonus Bucks awarded as a member reaches a new Vitality Status threshold are now at these levels:

Activate - Individual Activate – Individual

and Spouse/Partner

Elevate – Individual Elevate – Individual

and Spouse/Partner

Bronze 0 0 0 0

Silver 100 150 200 250

Gold 200 300 400 500

Platinum 300 450 600 750

• Milestone Workout Vitality Points awarded after every 10-workout milestone (e.g., 110, 120, etc.) are being

removed. There are three exceptions that are NOT being highlighted to clients or members.

at the 1st, 50th, and 1000th workout, points will be awarded on a “surprise-and-delight basis” – 50 Vitality Points

for the first two milestones (1 workout, 50 workouts), 250 for the third (1000 workouts).

• Clients will be billed for rewards redeemed through Vitality Wheel spins and the Mall.

• There will be one configuration of the Vitality Wheel regardless of a prospect’s decision on a Low, Medium, or

High Mall Rewards level. The odds of a member winning a gift card (instead of Vitality Points) on the Vitality

Wheel if they meet their weekly target will be the same for both new clients and existing clients.


• For Apple Watch, the employer will no longer pay a flat $150 fee each time an Apple Watch is purchased by one

of their members. The new pricing structure calls for:

o A PEPM increase of 12 cents if only employees can purchase an Apple Watch OR a PEPM increase of 15

cents if the employer offers an Apple Watch purchase option to both employees and spouses.

o An additional payment each month for each of their Vitality members still on a 24-month contract. The

payment amount will be equivalent to the difference between the maximum monthly payment (e.g.,

$12.50 for Apple Watch Series 3) and the payment due from the member (based on their number of

Standard/Advanced Workout points that month). If the member’s payment is totally waived because of

their activity, for example, the employer would pay the member’s entire maximum payment for that

month (e.g., the aforementioned $12.50 for Apple Watch Series 3).

VITALITY ACTIVE REWARDS, MALL OVERVIEW

1. What is Vitality Active Rewards? How does it benefit Vitality members? What are the primary objectives of the

program?

Vitality Active Rewards is an incentive-based physical activity feature that encourages members to strive to achieve

weekly physical activity targets for the chance to win an e-gift card from such vendors as Fandango, Amazon, Under

Armour and Starbucks. Each time a member meets the weekly target, he or she can spin the Vitality Wheel for a chance

to win Vitality Points or one of the e-gift cards.

The main objective of Vitality Active Rewards is to increase the total level of physical activity for less active members

and/or maintain appropriate levels of sustainable activity for members who are already considered active.

2. At a high level, how does Vitality Active Rewards work?

All eligible Vitality members receive a weekly target number of Vitality Points that they need to earn that week through

physical activity. For this particular program, the points target is earned through Standard or Advanced Workouts only.

If a member achieves the target for the week, the member can use his or her iPhone or Android phone to spin the

Vitality Wheel, a reward mechanism through which the member earns either points or a gift card. The number of points

earned ranges from 5 to 50; the gift card values range from $5 to $25.

3. How many Vitality Points must a member earn each week to receive a spin of the Vitality Wheel? And what is the

timeframe for each week’s workouts?

The weekly target will vary from 20 to 70 points to ensure that there is some gamification involved and that members

stay engaged. Targets will be revealed on a Monday and the members will have from that day through the following

Sunday to achieve their points targets for a spin on the wheel. Members’ points earned must be through Standard and

Advanced Workouts.

With the Vitality Today app, members will be able to see the progress they have made toward each target by reviewing

the Standard and Advanced Workouts they have completed each week.


4. Is there a connection between the level of Mall Rewards selected by the employer and the likelihood that a member

might win a gift card on the Vitality Wheel?

No. There is only one configuration for the Vitality Wheel; the chance of a member winning a gift card on the Vitality

Wheel if they meet their weekly target will be the same for members of new or existing clients regardless of the level of

Mall Rewards selected.

5. For Active Rewards, is there a particular way (e.g., Apple Watch) members have to earn points for Standard and

Advanced Workouts?

No. Members can earn points for Standard and Advanced Workouts the same ways they have been able to earn them. If

a member uses another device, tracks a workout through MapMyFITNESS, or visits a gym and uses the Vitality Today app

to verify the time spent there, the points the member earns will count toward Vitality Active Rewards. Note: If a member

completes multiple workouts in a day, only the points for the highest threshold workout will be credited toward the

weekly target.

6. What are the exact timeframes for each week in the weekly targets?

The weekly target cycle requires Standard and Advanced Workouts to be completed between 12 a.m. Monday and 11:59

p.m. Sunday (Central time).

7. What happens if there is a delay in workout points being reflected in Vitality, and/or the member doesn’t meet the

weekly target by 11:59 p.m. Central time Sunday?

If a weekly target is not achieved with certainty by the end of the weekly target cycle, the member will not be able to

immediately spin the Vitality Wheel but will be given a new target for the new week. In the meantime, the previous week’s

challenge will be kept open until 11:59 p.m. on the following Saturday to allow for any delay in points to be reflected, e.g.,

if the member has not yet synchronized his or her device. If during that monitoring period, points are awarded and the

previous week’s target is met, the member will earn a spin of the wheel for that previous target cycle. Points awarded

after the monitoring period will not be retroactively counted.

8. If a member doesn’t meet the weekly target by the time the next one is set, but meets it within the monitoring

period, will this affect the next week’s target?

Yes, it could because the weekly targets are determined based on past activity.

APPLE WATCH OVERVIEW

9. Why is Apple working with Vitality?

Apple is passionate about positively influencing people’s health and feels that Vitality’s offering is very much aligned to

their goals. They are also excited to work with a company in the health and wellness space that has a global presence.

Apple and Vitality share a global vision.


10. Why does Apple care about productivity within employer groups?

Apple wants to positively influence people’s lives. This collaboration with Vitality reaches individual and corporate clients

through life and health insurance as well as employee wellness programs. It’s the whole Vitality ecosystem that can be

positively influenced. For organizations outside the Vitality ecosystem, Apple has developed a product that makes

accessing workplace applications easier. Examples include email and phone notifications, calendar synchronization,

Salesforce apps, healthy lifestyle reminders and nudges.

11. What data does Vitality provide to Apple?

Vitality holds privacy in the highest regard. In the Apple collaboration, Vitality is able – with member consent – to obtain

information from the Apple Health app to deliver the benefits of the Vitality program. Vitality does not transmit individual

data to Apple. Apple does not use a member’s personal information. For more information on Apple’s commitment to

privacy, review its statement at http://www.apple.com/privacy/.

12. At a high level, how does the Apple Watch offering work?

Members can order:

• Apple Watch Series 1 and pay an up-front activation fee of $9 (for a 38mm model).

• Apple Watch Series 3 – GPS and pay an activation fee of $29 (for a 38mm model).

NOTE: More expensive Apple Watch models can also be purchased. However, the activation fee will be

higher (e.g., a 42mm model that lists for $30 more than the same 38mm model would have its activation fee

increased by that amount; similarly, an Apple Watch Series 3 – GPS + Cellular listing at $70 more than its

GPS-only counterpart would have $70 added to the activation fee).

After the activation fee, the number of Vitality Points members earn doing Standard or Advanced Workouts

determines the amount they pay for their Watch. A member’s monthly payment can be partially or even totally

waived based on these points earned.

Assuming a client is on a flat PEPM pricing structure (not shared-risk), then from the client’s standpoint, the amount of

the monthly payment that is waived for the member will be charged to the client. This is in addition to an extra PEPM fee

– for all employees, whether they purchase Apple Watch or not – of 12 cents; if the employer wants to offer the Apple

Watch purchase option to both employees and spouses, the PEPM surcharge is 15 cents.

For a client on the shared-risk pricing model, pricing varies. See question 13.

13. If a client has both employees and partners/spouses on Vitality, can both benefit from Apple Watch?

As part of the standard Apple Watch offering, only employees will have the ability to buy Apple Watch.

If an employer wants to also give partners the chance to purchase an Apple Watch, the impact depends on the pricing

model:

• For new clients on the shared-risk pricing model who want to offer both employees and their partners the

opportunity to purchase an Apple Watch, the performance fee charged for each advancement in an employee’s

Vitality Status will be $60 (instead of $50) with an annual performance fee cap of $60 per employee (instead of

$50).

• For clients on the flat PEPM model, the employer pays both of the following:

o A PEPM increase of 12 cents if only employees can purchase an Apple Watch or a PEPM increase of 15

cents if the employer offers an Apple Watch purchase option to both employees and spouses.

http://www.apple.com/privacy/


o An additional payment each month for each of their Vitality members still on a 24-month contract that

equals the difference between the maximum payment (e.g., $12.50 for Apple Watch Series 3) and the

payment made by the member (based on their number of Standard/Advanced Workout points that

month). If the member’s payment is totally waived because of their activity, for example, the employer

would pay the member’s entire maximum payment for that month (e.g., the aforementioned $12.50 for

Apple Watch Series 3).

14. Is there any prerequisite for an employee on Vitality to purchase an Apple Watch?

No, although the member needs an iPhone to be able to use the Apple Watch. The type of iPhone varies based on the

Apple Watch selected:

• Apple Watch Series 1: iPhone 5s or later with iOS 11 or later

• Apple Watch Series 3 – GPS: iPhone5s or later with iOS 11 or later

• Apple Watch Series 3 – GPS + Cellular: iPhone 6 or later with iOS 11 or later

A wireless service plan is required for cellular service. The Apple Watch and iPhone service provider must be the

same. Cellular is not available with all service providers. Roaming is not available outside carrier network

coverage area. For a list of cell providers broken out by country, go to https://www.apple.com/watch/cellular/.

15. In terms of data collected, can you confirm what data is automatically collected by Apple Watch as opposed to data

that is self-reported or manually entered by the employee?

We rely on data collected automatically by Apple Watch, focusing on daily steps and Active Calories. Self-reported

information and data from other sources into Apple’s HealthKit will not be applicable.

16. Do members need to close all the rings on Apple Watch to earn points?

Vitality will not award points for closing the Stand or Exercise Rings on Apple Watch. However, Vitality will award points

for Active Calories – and the Move Ring can assist in tracking progress toward meeting the required number of calories

burned.

Active Calories for Light, Standard and Advanced Workouts are calculated based on the member’s weight and gender. To

determine the number of calories he or she must burn to earn points, a member can refer to information on the Vitality

Today mobile app. If a member wants to set the Move Ring based on these thresholds, he or she will be able to do this

directly on his or her Apple Watch.

17. How are monthly targets activated?

When a member purchases an Apple Watch through the program and the Watch is shipped, Vitality is notified. Through

the shipping confirmation email, Vitality will direct the member to the mobile app and website to determine when his or

her monthly tracking will begin.

18. When a Vitality member purchases an Apple Watch, does he or she also pay sales tax?

Yes. Taxes are calculated on the retail cost of the Watch and are payable at the time the member orders an Apple

Watch. Taxes are calculated based on the state to which the Apple Watch is shipped.

https://www.apple.com/watch/cellular/


19. What does the member have to pay when ordering an Apple Watch?

The member needs to pay an activation fee associated with his or her Watch model, tax on the retail value of the Watch

and any applicable upgrade fees should the member choose a more expensive model. The ongoing monthly payments

will depend on the number of points the member earns through Standard or Advanced Workouts for that month.

20. Can a member purchase a more expensive Apple Watch other than Apple Watch Series 1 or Series 3 – GPS?

Yes. An upgrade cost will apply and, along with sales tax, will need to be paid at the time of purchase in addition to his or

her activation fee. This would include Series 3 – GPS + Cellular Apple Watches.

21. How often can a member purchase a new Apple Watch through this program?

Every two years. Even if a member pays off the Watch before the two years is up, he or she will still only be eligible to

purchase a new Watch when two years has elapsed after his or her initial purchase.

22. Does Apple Watch already have the member’s Vitality information and Vitality Today app pre-loaded on it?

No, it is not pre-loaded with any apps. Because Apple Watch is shipped directly from Apple, it is as if the member

purchased a new Watch online or directly from an Apple store.

23. What happens when a new Watch is released?

Vitality will adapt to incorporate newer models of Apple Watch into the program.

24. What happens when a member has reached the maximum number of Vitality Points permitted in the Physical

Activity category? Will he or she still be able to meet the monthly levels?

Yes. The member can continue to engage in physical activity and be recognized for qualifying workouts as if he or she

had earned points for Standard and Advanced Workouts. Watch payments will be reduced based on this activity, but this

activity will not contribute to any more total points in the Vitality program for purposes of Vitality Bucks or Vitality Status.

25. Does a member need to have an iPhone to use Apple Watch?

Yes, Apple Watch links to the iOS operating system that powers the iPhone. Users must have an iPhone 5s, 6 or later

model to enable this part of the program. See the response to question 14 above to determine the specific model

required for each Apple Watch model. Apple Watch cannot be linked to other Apple products such as an iPad or iPod.

26. Do all U.S. cellular providers offer cellular service for Apple Watch Series 3 – GPS + Cellular?

No, as of the time of the rollout of Series 3, only AT&T, Sprint, T-Mobile and Verizon offer cellular service to integrate with

Apple Watch Series 3 – GPS + Cellular. For a list of cell providers broken out by country, go to

https://www.apple.com/watch/cellular/.

https://www.apple.com/watch/cellular/


27. If a member purchases Apple Watch Series 3 – GPS + Cellular, is the cellular service immediately available when the

Watch arrives?

No, it is not immediately operational. For Apple Watch Series 3 – GPS + Cellular to use its cellular capabilities, the

member must take their Watch to their cellular provider (AT&T, Sprint, T-Mobile, or Verizon) to activate it as it will use the

same mobile phone number as the member’s iPhone. Also, for the GPS + Cellular Apple Watch, a monthly servicing fee

will be charged by the member’s cellular provider.

28. Are there any additional charges for Apple Watch Series 3 – GPS + Cellular beyond the purchase price?

Yes, but not from Vitality. As this is a new device being added to the contract, the member’s cellular provider will charge

an additional monthly fee for cellular service to the Apple Watch.

29. What is the exact timeframe for each month in the monthly points levels?

Standard and Advanced Workouts must be completed between 12 a.m. on the first day of the month and 11:59 p.m.

Central time on the last day of the month.

30. If a member gives his or her Watch away, will the new owner earn the fitness points on the member’s behalf?

For Apple Watch to work as intended, it is paired with the owner’s personal iPhone. If the Watch is given away as a gift to

a non-Vitality member, any data collected would be isolated to that person’s Watch and iPhone, and it will not be

possible for its data to be transferred to Vitality.

31. Can a member purchase the Watch for someone and pay it off through his or her own workouts without using it?

Yes, because Vitality measures Standard and Advanced Workouts from a variety of devices, it is possible to fund Apple

Watch without wearing it.

APPLE WATCH: MEMBER BILLING

32. How are the monthly payments for Apple Watch determined?

Payments are based on the total number of Vitality Points a member earns over the course of a calendar month through

Standard or Advanced Workouts. (Vitality Points for Light Workouts, self-reported workouts, and milestone bonuses are

excluded from the total.)

For Vitality to waive a member’s total monthly payment, the member will need to earn at least 250 Vitality Points for

those activities. For example, if a member completes an Advanced Workout on 10 days during the month and a

Standard workout on 10 other days that month, he or she will have earned 150 points for the Advanced Workouts (10

days x 15 Vitality Points) and 100 points for the Standard Workouts (10 days x 10 Vitality Points) for a total of 250 points.

In this example, the member will pay nothing for that month.


Under the new pricing structure described previously, the difference between the maximum payment and the actual

amount paid by the member will be billed to the employer each month. For example, if a member has purchased an

Apple Watch Series 3, the maximum payment amount each month, as shown in the chart below, is $12.50; if the

member achieves 200 points in Standard and Advanced Workouts in a particular month, the member is charged $6.00

and the employer is billed $6.50 for that member ($12.50 minus $6.00). Similarly, if a member has purchased an Apple

Watch Series 1 with a maximum monthly payment of $10.00 and achieves 125 points in Standard and Advanced

Workouts, the member is charged $8.00 and the employer is billed $2.00 for that member ($10.00 minus $8.00).

Other payment amounts and the number of Vitality Points required for that member payment amount are shown below:

Monthly Points Required

(Standard and Advanced Workouts)

Apple Watch Series 1 Payment

Amount

Apple Watch Series 3 Payment

Amount (GPS or GPS + Cellular)

250+ $0.00 $0.00

180-249 $5.00 $6.00

120-179 $8.00 $10.00

0-119 $10.00 $12.50

33. At what point each month does Vitality bill the member for an Apple Watch?

On the 17th day of the month, Vitality bills the member the appropriate payment amount based on the number of Vitality

Points for Standard or Advanced Workout the member earned in the previous month. Members must have all points

awarded in the system by the 6th of the month in order for them to be counted toward the previous month’s target for

the monthly payments. There will be no retroactive adjustments for points that Vitality awards after the 6th of the month.

34. When can a member expect his or her first billing cycle?

It depends on when Apple ships the Watch. Assuming a member receives his or her Watch seven calendar days after

Apple sends it, the member’s first full calendar month could be several weeks after the member receives the Watch. Two

examples:

• Example 1:

If Apple ships the Watch on January 13, 2018, Vitality assumes the member has it on January 20, 2018. The

member’s first full calendar month is February 2018, and Vitality begins tracking the qualifying workout points

earned.

The member’s first invoice/billing occurs on March 17, 2018.

• Example 2:

If Apple ships the Watch on July 31, 2018, Vitality assumes the member has the Watch on August 7, 2018.

The member’s first full calendar month is September 2018, and Vitality begins tracking the qualifying workout

points earned.

The member’s first invoice/billing occurs on October 17, 2018.

More specifics are included below.

If a member’s

Watch is shipped

in this month:

And the member is

notified his or her

Watch was shipped:

The member’s first

full month to earn

points will be:


billing month/date

will be:

Jan On or before the 24th Feb Mar 17

Mar Apr May 17

May Jun Jul 17

Jul Aug Sep 17


If a member’s

Watch is shipped

in this month:

And the member is

notified his or her

Watch was shipped:


full month to earn

points will be:


billing month/date

will be:

Aug Sep Oct 17

Oct Nov Dec 17

Dec Jan Feb 17

Jan On or after the 25th Mar Apr 17

Mar May Jun 17

May Jul Aug 17

Jul Sep Oct 17

Aug Oct Nov 17

Oct Dec Jan 17

Dec Feb Mar 17

Sep On or before the 23rd Oct Nov 17

Jun Jul Aug 17

Apr May Jun 17

Nov Dec Jan 17

Sep On or after the 24th Nov Dec 17

Jun Aug Sep 17

Apr Jun Jul 17

Nov Jan Feb 17

February – not

leap year

On or before the 21st Mar Apr 17

On or after the 22nd Apr May 17

February – leap

year

On or before the

22nd

Mar Apr 17

On or after the 23rd Apr May 17

35. Is there flexibility on the billing date of the 17th of the month?

No. Vitality must tell the member 10 days prior to charging his or her credit card. With a member having a monitoring

period of six days and a 10-day waiting period, everything needs to follow this cycle.

36. If a member misses payments, i.e., nonzero payment amounts are due but not paid, what happens?

If Vitality is unable to process a payment, typically due to an expired or invalid credit card, we will send an email to the

member. The member will also see alerts on both the mobile app and website asking him or her to update his or her

credit card details. If a member has missed six months’ worth of payments and has not updated his or her payment

details, Vitality will send a warning that we will send his or her account to a collection agency if we are unable to process

payments that month. If there is still no response from the member, Vitality will send the member’s account to a

collection agency where the member will need to pay any amounts missed along with the full remaining balance on the

Watch.


37. How will we manage reimbursements if workouts are delayed due to an error in our system? Or what if the

member’s “six-day” window overlaps with the next month and we charge him or her after we receive his or her

workouts?

We will credit members back only if we can see that there was a delay on Vitality’s side to award points. Members must

sync their devices by the 3rd of the month to ensure timely awarding of their points.

38. Is the employer ever responsible for payments that the employee doesn’t make? Also, who pays the difference

between the monthly repayment amount and the reduced amount for an active member?

The retail installment agreement is between the employee and Vitality; the employee is responsible for all payments on

that agreement. So the employer is not responsible for a payment; however, for clients under the new pricing structure

described on page 1, the employer would be responsible for paying Vitality the difference between the maximum

monthly payment and the reduced amount paid.

39. What happens to bad debts?

If a member has not paid his or her owed monthly amounts (as opposed to months in which the member earned at

least 250 points from Standard and Advanced Workouts and therefore didn’t have a payment) for a period of six

months, that member’s account will be sent to a collection agency. The collection agency will attempt to collect the past-

due amounts owed and the remaining balance on the Watch.

40. How are payments handled for a person who is no longer a Vitality member?

An individual may no longer be a Vitality member for several reasons:

• The employer terminates the contract with Vitality.

• The Watch owner is no longer employed by the client offering Vitality.

• An individual’s coverage on the employer’s insurance plan is terminated if that is a requirement to participate in

Vitality.

When a member’s Vitality policy is terminated, he or she no longer has the ability to earn Vitality Points and must pay the

maximum monthly amount for the remainder of the payment period.

Member Termination: The member is responsible for continuing his or her monthly payments at the maximum

monthly amount. Depending on what point in the month the member’s coverage is terminated, and the number

of Vitality Points he or she earned in qualifying workouts up to that point, a discounted monthly payment may

still be appropriate. For example, if a member leaves his or her employer effective May 20th, but has earned 200

Vitality Points in Standard and Advanced Workouts by that date, the June billing cycle will allow him or her to pay

the discounted amount associated with earning those 200 points. In June, the member will not be able to earn

any Vitality Points; therefore, when the July billing cycle occurs, the member will pay the maximum monthly

amount for that month and all future months until the balance is paid in full. Also, the member always has an

option of paying the remaining balance and closing out his or her monthly obligation.


41. If an employee’s Apple Watch is lost or stolen, will he or she need to pay for a full replacement or will he or she be

allowed to pay the activation fee again and restart the 24 monthly payments?

If the Watch is lost or stolen, the member is still responsible for the monthly payments based on the number of

Standard or Advanced Workouts he or she completes during each month. The member will still be able to reduce the

monthly payments based on physical activity tracked via other devices or through gym visits. However, he or she will not

be eligible to purchase another Watch through Vitality until two years after his or her original purchase.

42. Who collects the money from the employee?

Our payment vendor, Vindicia, stores credit card information, collects payments and maintains details on successful

payments, missed payments, and expiring and expired credit cards. From a member’s perspective, this interface will be

contained within the POV site. Vitality will never store any credit card details.

43. Can a member use Vitality Bucks to pay off his or her balance?

No.

APPLE WATCH: SUBSIDIES

44. If an employer wants to help finance part of the purchase of an Apple Watch for each employee, can it be for any

amount?

The employer has three options to reduce the length of time their employees have to pay off their monthly contributions

(reducing the term). If the employer makes no contribution, it will be a 24-month payment period.

If the employer

wants the payment

period reduced to:

The employer’s contribution for

each Apple Watch (Series 1) must

be:

The employer’s contribution for

each Apple Watch (Series 3) must

be:

The employer’s

contribution for each

Apple Watch ~ % off:

18 months $60.00 (equivalent to funding six

months)

$75.00 (equivalent to funding six

months)

25% discount

12 months $120.00 (equivalent to funding 12

months)

$150.00 (equivalent to funding 12

months)

50% discount

6 months $180.00 (equivalent to funding 18

months)

$225.00 (equivalent to funding 18

months)

75% discount

Note: The activation fee must be paid by the member. Vitality will not waive, nor allow employers to fund, the activation

fee.

45. Is there a minimum number of Apple Watches to which a client needs to commit?

No.


46. What does the employer need to pay per Apple Watch ordered?

This depends on the pricing model selected by an employer.

• For employers who select shared risk pricing, there is no employer payment per Watch, but rather a payment

each time an employee advances in Vitality Status. See question 13.

• For clients who select the flat PEPM model but add on Apple Watch, there is no up-front fee per Watch ordered.

However:

o When a client adds the Apple Watch purchase program, the PEPM is raised by 12 cents if only employees

can buy an Apple Watch or by 15 cents if both employees and spouses can buy an Apple Watch. Note:

this is the case for new clients. If an existing client is adding Apple Watch as an option, the PEPM charged

may or may not be increased – that will be handled on a case-by-case basis.

o Also, the client is billed – for each Watch purchaser each month – the difference between the maximum

monthly payment (e.g., $12.50 for Apple Watch Series 3) and the payment due from the member (based

on their number of Standard/Advanced Workout points that month).

Both shared-risk pricing clients and flat PEPM-billed clients can offer to subsidize 0, 6, 12 or 18 months’ worth of

payments.

47. If an employee buys an Apple Watch and leaves the company before the end of the two years, will the employer get

any portion of their subsidized amount back, i.e., the up-front amount: 6, 12, or 18 months’ worth of subsidy?

No. The retail installment agreement is a two-year pact between Vitality and the member that details the payments

involved with all months that are not subsidized by the employer. The retail installment agreement does not require

member repayment of any amounts subsidized by the employer. For example, if the employer subsidizes the first 12

months of payments, and the member leaves the company six months after that, the member would be responsible for

paying the final 6 months of payments that have not yet been covered by subsidy, verified standard or advanced

workouts and/or payments.

48. As an employer, if I subsidize part of Apple Watch, am I obligated legally to provide a subsidy for other devices?

No, a client is not legally required to offer a subsidy for other devices. However, if a client wants to offer incentives for

other devices, he or she can set this up as a VCM option requiring people to exercise a certain number of times in a

quarter. Note: The client will manage that; it is not an automated part of the program.

APPLE WATCH: CLIENT PRICING AND BILLING

49. What is the client pricing for this program?

The Apple Watch purchase program is included in the shared-risk pricing model; it is available as a buy-up for those on

standard PEPM pricing. The pricing details for these two models is as follows:

1) For shared-risk pricing, the performance fee is $50 each time a member’s Vitality Status increases, with a $50

PEPY performance fee cap. If the new client wants spouses/partners to have the opportunity to purchase Apple

Watch, these fees will rise to $60 per status change with a $60 PEPY performance fee cap.


2) New clients who wish to add Apple Watch but maintain their flat PEPM may elect to do so but: their PEPM will be

increased by 12 cents if only employees can buy an Apple Watch or by 15 cents if both employees and spouses can

buy one. Also, as indicated in the response to question 46, the client will be billed each month for the difference

between the maximum monthly payment and the payment due from the member. For existing clients, the PEPM

may or may not increase; this will be determined on a case-by-case basis.

50. If an existing client wants to add Apple Watch to their program part-way through the program year, what will the

PEPM be?

This will be determined on a case-by-case basis, but the PEPM may or may not be raised by 12 cents if only employees

can buy an Apple Watch or by 15 cents if both employees and spouses can buy an Apple Watch through the program.

51. If existing clients move to shared-risk pricing, they are paying more for the already-engaged people who Vitality is

not really trying to target through this benefit. How do you explain that?

In the shared-risk pricing model, clients are paying for the results they receive from the program. The more members

engage, the better the outcomes and desired behavior from them. Vitality has seen increases in activity from people who

are engaged in Vitality Active Rewards.

52. What if an employer selects the shared-risk model, but does not elect to allow partners to buy Apple Watch during

the sales and contracting processes, adding them instead during the implementation or first year of the program?

Does it change the PEPM or Performance Fee? Is an addendum required?

The PEPM remains the same, but adding partners for the Apple Watch benefit increases the status-based fee. Please see

information earlier in this section for fees.

VITALITY WHEEL REWARDS

53. How is the target provided to the member?

Weekly targets are provided on Vitality Today and will change on a weekly basis. These targets are dynamic and based on

the member’s past physical activity. Targets will be available on Vitality Today every Monday.

54. If a member wins a gift card, but would prefer one for a different retailer, e.g., the member wins a Starbucks gift

card, but has no Starbucks in his or her area, can the member select a different retailer?

Yes, other gift cards are available for the same dollar value.

55. Does the client fund the rewards redeemed if the member wins a prize on the wheel?

In the shared-risk pricing model, prizes won through the Vitality Wheel are not billed back to the client. In the flat-fee

model, gift cards won from wheel spins are billed back to the client and items purchased on the Mall are also included

on the bill.


REASONABLE ALTERNATIVES, ACA AND TAXATION

56. What are the Reasonable Alternative Standards for those under the Active Rewards and Apple Watch benefits?

There are two groups of people who will need a Reasonable Alternative Standard (RAS) under Active Rewards and Apple

Watch:

1. Those who can work out, but cannot achieve a Standard or Advanced Workout, and

2. Those who cannot do any physical activity whatsoever.

For those who can partially work out, they can fill out a physical activity waiver and receive Standard Workout points for

all Light Workouts they complete. This will allow them to do Light Workouts to achieve the points needed for both the

weekly targets and Apple Watch benefit. If a member already has a physical activity waiver on file, no additional waiver is

required.

Those who cannot work out whatsoever – whether temporarily or permanently – will be able to receive some reprieve

for the Apple Watch benefit and can receive up to four waived months. This is when Vitality will give the member a “zero

point requirement” for those months and the member would be charged nothing regardless of the activity he or she

performs.

For those who cannot workout whatsoever, no RAS will be provided for the weekly targets part of the program. Members

who have a temporary or permanent disability will need to contact Vitality’s Call Center and submit a doctor’s note

explaining their situation.

There is no formal form for the member to complete online.

57. Will Vitality provide VARWAW Rewards reporting to employers requiring it for tax purposes?

Yes, Vitality will include the value of gift cards, Apple Watch subsidies and engagement discounts in the standard rewards

report to employers. This provides the employer with the information they need for tax reporting, if required, in line with

the employer’s existing practices on employee benefits and incentives.

58. Do we furnish a 1099 for discounted payments or any other VARWAW Rewards?

No. We only furnish them for Vitality Squares wins that exceed $600 per calendar year.

59. How do the program rewards impact a client’s budget or Vitality Bucks liability?

Vitality Points won via Vitality Wheel spins will contribute to a member’s bucks balance and Vitality Status progress. In the

shared-risk pricing model, prizes won through the Vitality Wheel are not billed back to the client. In the flat-fee model,

gift cards won from wheel spins are billed back to the client and items purchased on the Mall are also included on the

bill.

60. How does Vitality calculate sales tax on Apple Watch?

This is a state sales tax based upon the delivery address the purchaser enters into the shipping information at the time

of purchase. Sales tax varies from state to state and is based on the retail price of Apple Watch.


61. How does the Apple Watch incentive and gift cards from the Vitality Wheel work with the ACA’s 30 percent limit for

incentives?

The incentives received are based on an Activity-based Outcome (number of workouts in a given amount of time). This is

true with both the Vitality Wheel and Apple Watch. Therefore, when considering the total value of Vitality Rewards, the

total possible Active Rewards values should be considered.

Remember, when anyone asks about ACA, you must include a disclaimer, “While Vitality is happy to share our opinion and

understanding, we recommend you seek advice from your own counsel on the matter.”

62. Physical Disability: What if the client wants to extend the six-month window and take on the liability for a member

who has a physical disability? Will Vitality give them the opportunity to do so?

The decision will be made by Vitality’s Tailored Solutions Committee as this is not a standard option in the program. It is

also sensitive as it involves sharing a member’s PHI.

MISCELLANEOUS

63. What is available for Android users?

Vitality Active Rewards weekly targets and their associated rewards are available.

64. With Vitality partnering with Manulife, will there be more opportunity for this to be available to Canadian employees

of U.S. companies?

While this may be possible in the future, please refrain from any speculation around this as the programs are

significantly different.

65. Will Vitality receive data from the Apple Health app now that we are linked to Apple Watch?

Vitality receives data from Apple to record steps and active calories for the purpose of awarding Vitality Points. The

member has to elect to share this data. No data will be shared back with Apple.

66. Does a member have to download a separate app on the Apple Watch?

Yes, the member needs to add the Vitality Today app to his or her Apple Watch.

67. Is the Apple Watch delivered with the Vitality Today app already pre-loaded?

No, a member is responsible for downloading Vitality Today from the App store.

68. Does the Vitality Today app work on Apple Watch enabling a client to send push notifications on the employer

portal through the app, to the member’s Watch?

Yes, and this is a great selling point for Sales and WSMs, as it helps with the ease of communication and productivity and

proves Apple Watch is a true lifestyle companion.


69. What is the lifespan of Apple Watch? Will Apple Watch last the length of the financing?

Yes – this is consistent with other technology upgrades, i.e., a member is eligible for new phone upgrades every two

years and Vitality is moving forward on this same assumption. While Apple may have annual releases or upgrades on the

Watch, Vitality expects most people will not want to buy a new Watch every year.

The lifespan of the agreement is 24 months (2 years). Employees are only offered the ability to purchase one Apple

Watch within that timeframe.

70. Can a member exchange the Watch for a new one should Apple come out with another?

No, if a member is outside of the 14-day exchange period, he or she is responsible for satisfying the contract on the

Watch he or she originally purchased. However, if a member is within the 14-day exchange policy, he or she can

exchange the original Watch for another at the Apple store, paying any difference in price at the point of purchase.

71. How is Vitality planning to ensure that its program is compatible with any new versions of Apple Watch? Does

Vitality have an agreed-upon time frame with Apple to ensure compatibility (e.g., four weeks post release of the new

Apple Watch version)?

Apple doesn’t announce the timing of new products until they are made public. When a new Apple Watch version

becomes available to the market, as occurred in the fall of 2017 with the unveiling of Apple Watch Series 3 – GPS and

Apple Watch Series 3 – GPS + Cellular, Vitality will be able to offer that to members shortly thereafter (exact timeframes

vary). The customer experience will be exactly the same as it would be if they were buying retail – if they happen to buy

the old Watch prior to the release of the new one, it’s just like any other retail purchase when a new version comes out.

72. If a member leaves one company where he or she was a Vitality member and purchased an Apple Watch and joins

another that offers Vitality and Apple Watch, can he or she receive a new Watch through his or her new company’s

program? What if a member leaves a company that offers Vitality and Apple Watch and then returns to it?

If a previous member joins a new company that offers Apple Watch, he or she will be able to purchase another Watch.

Vitality isn’t policing such scenarios and won’t know that they are the same person. The individual could pay off two

Watches, but the first one will be at the full payment amount. If the member leaves and returns to the same company,

this will be a reinstatement for which rules are in development.

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