Healthywage Review: Final Results, Tips, Diet Bet Comparison

hw_logoAfter reading academic studies which found that financial incentives were effective in helping people lose weight, I joined both DietBet* and HealthWage in early 2015. This week, I received my winnings from my individual “Healthy Wager” bet at HealthyWage.com. You tell them your body details, how much you want to bet, how much you want to lose, and they’ll calculate what prize to offer you. This is my final review of the entire process, including some helpful tips and a comparison with similar site DietBet.

(* See my separate DietBet Review.)

My original HealthyWage offer was for $100 a month times 9 months = $900 total, for a potential win of $100 (11.1% payout). This was based on losing 10% of my initial weight (~20 lbs) over 9 months (2/2 to 11/3/15). However, Healthywage issues 1099-MISC forms for your total gross winnings (initial bet + profit) when at or over $600. After learning about this, I asked them to adjust my bet so I would remain under this amount. I had already made my first $100 monthly bet, but all future bets were then set to $50. I had already started the bet, so I appreciated this courtesy. Now my total bets would add up to $100 x 1 month plus $50 x 8 months = $500. Times the same 11.1% payout, my total winnings would be $555.56.

Honestly, risking $500 to win $50 didn’t feel like a very good risk/reward ratio, but I wanted both the extra motivation and the ability to compare the two services. Back in 2011, Healthwage used to have a “double down” bet where participants put $150 on the line and won $300 if they lost 10% of their weight over 6 months. I guess they found that to be too generous, as I no longer see it as available.

Initial weigh-in verification. There are three ways to verify your weight:

  1. Video Verification. Smartphone video using your personal scale. The most popular option, and the one that I chose.
  2. Verification by a Fitness or Health Professional – Bring a form to your “local gym, pharmacies, corporate wellness clinics, walk-in clinics, HR reps, nurses, your personal doctor, your personal trainer or your chiropractor.”
  3. Verification at a Weight Watchers Meeting.

I followed their directions carefully, uploaded my video, and both my initial and final videos were accepted with no issues or additional requests.

Very little ongoing support during the challenge. Every month since February, I would see a $50 charge on my credit card bill from Healthwage. However, that was about it. There were no regular e-mail updates. No interim weigh-ins. No fun tokens or prize giveaways. No smartphone app. No encouraging quotes or success stories. No interaction at all.

Upon initial sign-up, I was given my 2-week window for final weigh-in (October 20th to November 3rd, 2015). HealthyWage’s two-week window is definitely more generous than DietBet’s 48-hour window, with the important difference that I was never sent any reminders by HealthyWage when the time actually came. In comparison, Dietbet sent me multiple reminders beforehand. Now, I had the date marked on my digital calendar with several alerts, so I completed my weigh-in by the second day of the window. It is quite possible that if I waited until closer to the final deadline, I would have gotten a reminder. But I wouldn’t rely on it. I got the feeling that they wouldn’t mind if you forgot about that final weigh-in.

This brings me to the important structural difference between HealthyWage and DietBet. DietBet collects participants into groups and then takes a cut from the pooled bets. The winners of each group then split the money from the losers, so that Dietbet makes the same commission amount, no matter how many people win or lose. HealthyWage, on the other hand, makes one-on-one bets with individuals. So whether you win or lose does affect their bottom line. HealthWage is more strict in its final verification requirements (see below), and in my humble opinion this structural difference is the cause.

Extra final verification hoops. Upon final weight verification, you’ll have to submit the verification video again (see above). But that’s not all. I also had to locate and upload a “before photo” and an “after photo”, which could be any photo from “around the time” of the start and end of the challenge. I also had to upload a scan of my driver’s license. Here’s a screenshot of their page asking for additional information. Note the final line in red letters:

Please note, this is you last chance to avoid scrutiny of your account. If you have cheated, do not proceed.

Not exactly giving off the warm fuzzies, are we?

Finally, despite my desire to avoid receiving a 1099-MISC, I successfully referred a few people to Healthwage and received $240 of extra money added my “pot”. (I had to win the challenge in order to get this money.) Since I did win and my final amount was now above $600, I had to provide them with my Social Security number in order for them to fill out the 1099.

Final payout options. There are two options to receive your winnings. A mailed check takes 3-4 weeks to process, with no fee. The other “fast” option is PayPal, which charges a 3% fee. I picked the PayPal option because I didn’t want to wait around for a check. However, they later clarified that it would still take 3-5 business days for Paypal transfer. The 3% fee is actually taken out by PayPal, so HealthyWage actually sends the full amount (they just choose not to subsidize the fee). In retrospect, maybe I should have just waited for the check. Here’s a screenshot:

hw_finalpay

Summary and recommendations. I committed to a Healthywage bet to lose 10% of my initial weight over 9 months. I completed my initial and final weight verifications without hassle, won the bet, and was paid my winnings. However, the process felt rather sterile and business-like. I put $500 at risk and won $55, for a payout ratio of 11%. I also won a bit extra due to referring others.

In comparison, DietBet had a much more online interaction, regular e-mail communication, and a useful smartphone app. It felt more like a friendly, supportive game. I was only able to bet $150 total, but I won $129. That’s a payout ratio of 93% (variable, not guaranteed). This was for a 10% weight loss bet over a shorter period of 6 months.

Both Healthywage and DietBet paid out and fulfilled all of their promises and obligations. My recommendation is that for more fun and most likely better payout odds, I would join DietBet first. If you want extra motivation and the ability to risk more money and thus possibly win more money, add a concurrent HealthyWage bet as well. If I had kept my initial $100 a month bet commitment, my total winnings from both sites would have been nearly $250.

Comments

  1. I don’t really understand the 1099 tax math — you would’ve “won” $100 even with the initial proposed bet. Why would that trigger a 1099? If they send you a 1099 with your bet + winnings payout, that seems like the wrong way to do it and wouldn’t it create hassle when tax time came and you had to adjust your 1099 and explain that $900 actually came from your own bet?

    • Yes, exactly, the extra hassle is why I don’t want the 1099. The way Healthywage operates, any time your winnings (even if return of principal in effect) meets or exceeds $600, they will send you a 1099-MISC for the whole amount. Example, you bet $500 and win $100, you’d get a 1099-MISC of $600 total gross income. It is then up to you to explain to the IRS that $500 of that $600 was your “upfront bet”, and your gain was really only $100. Not impossible, not unethical, just a pain in the butt and increases your chance of audit slightly in my humble opinion.

  2. Nothing wrong with blogging about tax evasion, right?

    Or wait, I guess maybe you report all miscellaneous income on your taxes like you should regardless and the only reason you want to avoid getting a 1099 is to save the environment?

    • I don’t understand what you are talking about. If I bet $500 and won $100, I’d have a 1099-MISC for $600. I feel that I should get a 1099-MISC for $100, not the $600 as is their policy. That is my true income, no? I don’t want the hassle of having to explain to the IRS my “gambling costs” as Healthywage wants me to. Why increase my audit risk over something so relatively trivial.

      Finally, I don’t want to have to provide my Social Security Number to yet another entity. But thanks for the anonymous accusations!

      • I agree Jonathan. I could not figure out how to “write off” my bet to Healthy Wage. I hope you can figure it out but, it definitely isn’t fair to be taxed on Misc. income that isn’t income. Tax me on the payout, not my initial “BET”. Mine was worse I had a 1099 for $1800, I bet $900 but ended up having to pay taxes on my $900 winnings and my $900 bet. This was for tax year 2014, and I actually filed an extension so I could research how to write off my bet, but never was able to and just ended up paying the tax. So my winnings actually were quite a bit less. Oh, well I AM healthier!

        As Mike mentioned in these comments. “Sucks but that’s how the IRS works.” Joe’s comments were also was informative and productive.

        Not sure what is up with MUD, but that’s one of the downsides of the internet. Anonymity…….

        Thanks again for a great blog. I look forward to all of you tips and experiences.

  3. Keith Lewandowski says:

    Hi Jonathon,

    I have also done participated in the Healthy Wage and Diet Bet programs and agree with your reviews about them. Diet bet definitely doesn’t hassle you, they get their 25% up front. I also had to fill out a 1099 for my Healthy Wage winnings, but what irritated me is that the 1099 that Healthy Wage sent me was for the total payout. They didn’t subtract the amount I paid for my bet. In your case you made $55, but the 1099 that they sent you, it was for the full amount that they paid back to you, right? I don’t think you should have to pay taxes on money that you put up. Paying taxes on your $55 of winnings seems reasonable, but not on the $500 that you bet on yourself. Maybe there is a way to write off your bet, but I couldn’t figure it out. Anyways, the great thing about the 2 diet sites is that they do motivate you to drop weight. Love your blog. I always look forward to your advice. Thanks!

  4. If they are operating similar to the way that gaming entities operate (though hard to imagine they went through the trouble and expense of getting a gaming license), they are required to send you a 1099 for the full amount. That’s because once you place the bet, the funds are considered to be spent on your end and issued in full when you win. It’s the same deal with most casino games, though the threshold varies depending on the game. Sucks, but that’s the way the IRS works.

  5. I believe that you can write the 500 as a gambling loss to offset the winnings that is reported on the 1099. So you would only pay taxes on the $55.

  6. Congrats on losing all the weight! I am totally jealous – 10% wow! Awesome.

  7. I imagine this should be reported the same as other gambling winnings.

    If you bet $500 and you “won” $600, you have $600 worth of income reported on Line 21 of 1040. In order to deduct your bet, you would need to claim it as a Misc Itemized deduction (not subject to the 2% limitation) on line 28 of Schedule A.

    There are some rules that allow the “netting” of wins/losses, but those typically involve one gambling “session” (normally the same day).

  8. I’m no expert, but isn’t this like a misallaneous contract job? Somewhat like uber? They report the whole amount that they pay you, and it’s upto you to report how much of that is actual income. (In your example, you paid $500; you may have paid for other items, such as treadmill, bottled drinks, electricity, outdoor gear, and other items for this income…so, maybe if you have saved receipts, you can claim $555 was cost of the 1099-misc income?)?
    -as a curiosity, has anyone used their credit card with them? If so, what kind of purchase was it categorized on their credit card statement?

    • On the 1099-misc, will they report the gross amount (795.56), or the net amount (772.19) after their fee (23.37) for your case?

  9. John Oswald says:

    I actually won a HealthyWage 3 years ago. I put up $1,500 to lose 40 pounds in 6 months to win $600. They sent me a check for $2,100 and a 1099. I contacted the IRS to ask how to handle it since I had only made $600, how do I deduct the other $1500. The IRS responded that I was required to pay taxes on the entire amount. I inquired about the possibility of using the gambling method of deducting what I put up and they said that if you look at the HealthyWage website, it specifically says that it is NOT gambling. The IRS went on to say that HealthyWage has no gaming license and internet gambling is illegal. So there is no basis for deducting the amount that was ‘wagered’. Luckily, my winnings were enough that I still didn’t lose money, but many people could end up losing money if they follow the law regarding taxes. I believe that HealthyWage should issue 2 checks to each HealthyWager winner. The first being a refund and the second being the ‘winnings’ and issue a 1099 only on the second one, if necessary. There is never a need to issue a 1099 on a refund.

  10. Keith Lewandowski says:

    Completely agree with John Oswald. The same thing happened to me. Very frustrating experience.

  11. Jonathan, congrats on your success!

    I’m the Community Manager at HealthyWage and I just wanted to let everyone know that we have an updated policy for how we handle 1099s now.

    Your 1099 will only have the amount of your actual win. The payments for that challenge are not included.
    If you receive a $1000.00 check but paid in $600.00 you would NOT receive a 1099. If you received a $1000 check and paid in $200.00, your 1099 would say 800.00.

    We appreciate the discussion in this thread. If anyone has any questions, just let me know.

    Thanks!

    • Thank you for the notice about the updated 1099 policy. I’m glad it now changed, will update my post when I get the chance.

    • Keith Lewandowski says:

      Common sense finally prevails, but for a lot of us, we already got stuck with an inflated 1099 from HealthyWage.

      I wonder if there is anything that can be done retroactively by Healthywage. As mentioned earlier in this thread, I got a 1099 for $1800 of which only $900 was winnings. Totally turned me off to HealthyWage.

      Kate from Healthywage any chance of getting a revised 1099???

  12. Kristen Ford says:

    Finding motivation to lose weight can be very challenging. This motivation can be even more difficult during holidays, family dinners or a night out on the town with friends or coworkers. Now imagine having a financial motivator to lose weight! Yes, I thought it sounded too good to be true as well until I looked into Healthy Wage from the link on my employers intranet page. There are all kinds of challenges you can join simultaneously to earn money while you lose weight. I decided to do as many as possible. I gathered a team of five and each of us entered the team challenge for $70 to be entered in to win a grand prize of $10,000. I also decided to pay an additional $75/month to join an individual challenge for six months for a chance to double my money. I would join step challenges as well to help me incorporate walking into my weight loss routine. My team members still struggled with the team challenge and we didn’t win the $10,000 but I did win the individual challenge and lost seven additional pounds past the forty I had originally entered the challenge for! My prize was $1,050 which I spent on a mini vacation to show off my new six pack abs! 🙂 I also kept the weight off and got my $70 back from the team challenge. To read more about my daily meal plans and to see before and after photos of me in the same outfit, please visit the Healthy Wage site. I am success story #82 and my name is Kristen Ford. If you have trouble finding it, feel free to send me a message or reply to this one and I will send you the link.

    Thank you Healthy Wage for helping me surpass my goal and for paying me to do it!:)

    • Rebecca Carnahan says:

      Hello,
      I am thinking about playing Healthywage but am afraid I will bet money then lose it because I didn’t loose the weight. Also, I am confused about how 1 person is winning over $1000 and another only $55. I appreciate your time if you answer. Thanks.

  13. Wife and I lost a combined 130 lbs and won over 2,000 (which of course basically was used to replace our wardrobes… lol.

    This program gave us that little extra something and it made all the difference.

    FIVE STARS!!!!

  14. John Pauly says:

    I have done HeathlyWage. I found the financial incentive worked for me. Really the ability to make a little extra money while at the same time working towards small and large weight loss goals is a no brainer. I found the money easy to handle now with their HW Point system. I found that eventually I was able to participate in the challenges using the money I had earned from previous challenges. This is not a “get rich quick scheme” but it is a way to earn a monetary bonus for yourself while on your weight loss journey.

  15. Hi, I filled out the information and got to the last page. I stopped before I clicked on the part that says “Show your prize”. At which point am I officially committed to the program? Can I see my prize amount (which I assume is the balance after my initial monthly payments are subtracted) before committing to the program?

    • It’s been a while since I did this so I can’t say for sure, but I recall being able to see the prize before committing to the program. It should be before they ask you for credit card information.

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