All Digital Rewards, a leading health and wellness incentive provider, is committed to helping health and wellness program managers understand the basics of creating an incentive plan for their members. When creating a health and wellness incentive program, there are four main types that most programs will fall under. In previous posts, we’ve explored type 1 and type 2 programs. In this third post of our Incentive and reward program series, we will be reviewing type 3 health and wellness incentive programs: Health Plan-Related Activity-Only Programs.
Type 3 Health Plan-Related Activity-Only Programs allow participants who are enrolled in the company’s healthcare plan to earn rewards after completing certain health and wellness activities. Examples of these Health Plan-Related Activity-Only Programs could include things like a reduction in employee health plan contributions if the employee follows a diet plan, or rewarding an employee for participating in exercise classes, or offering a reduction in employee health plan contributions if the employee exercises for at least 3 days out of a week for a minimum of one hour on each of those days.
Your type 3 health and wellness program must be accessible to all similarly situated employees who are enrolled in your company’s health plan. There must be equal opportunity for all employees to complete the activity required under the type 3 program.
An important point with type 3 programs is that the rewards are based on the completion of specific activities, not on the outcome of those activities. For example, an employee who participated in a fitness challenge as part of a type 3 health and wellness incentive program would be rewarded for participating in the challenge, even if they did not lose weight or gain muscle. Additionally, if an employee wishes to participate in a type 3 health and wellness incentive program, but is unable to complete the activity required for the program, a reasonable alternative must be provided. The alternative does not need to be decided on prior to the start of the program, but employees must be made aware of the fact that they can request the alternative if they cannot complete the program’s original required activity.
As with all health and wellness incentive programs, type 3 Health Plan-Related Activity-Only Programs have specific laws that apply to how these programs are to be conducted. Type 3 health and wellness incentive rewards programs have essentially the same requirements as a type 2 health and wellness incentive rewards program. If your type 3 health and wellness incentive program provides medical care it will need to comply with The Health Insurance Portability and Accountability Act, The Employee Retirement Income Security Act, and The Consolidated Omnibus Budget Reconciliation Act. All type 3 programs, regardless of whether they provide medical care, must be in compliance with The Patient Protection and Affordable Care Act, Title VII of the Civil Rights Act, The Americans with Disabilities Act, The Age Discrimination in Employment Act, The Fair Labor Standards Act, Cafeteria plan regulations, and various local and federal tax laws. If the type 3 program offers an HRA (Health Risk Assessment) it will also need to be in compliance with The Genetic Information Nondiscrimination Act.
Choosing the right health and wellness program and what incentives can drive participation can be easy with the right people on your side. All Digital Rewards has a team of experienced experts who can help you understand incentives products and services as well as the technology needed to manage a successful wellness program that will fit your organization’s needs best. Our health and wellness experts are standing by to answer your questions. Give us a call at 866-415-7703 or click the “Schedule a Demo” button below!
Have questions or want more info?
Send us a message or reach us by phone at
+1 866-415-7703 ext 2