Fitbit Allows Boss to Track Employee Exercise to Cut Insurance Costs

fitbitWearable fitness trackers are a way for people to track their steps and determine how much exercise they are getting. Now these devices, such as the popular Fitbit, are also coming into use as part of corporate wellness programs, as they encourage employees to become more fit, potentially cutting insurance costs, and allowing the boss to track workers’ exercise to verify they are actually doing what they say. Companies are passing much of these savings on to their workers, and many are offering other incentives to encourage their workers to become more fit.

Market research firm Canalys predicts that shipments of smart bands will reach 8 million this year alone and more than 45 million by 2017. ABI Research predicts that at least 13 million of the devices will be used in corporate wellness programs by 2018. Popular trackers such as Fitbit, Jawbone UP or Nike+ Fuelband have been incorporated into companies for several years, offering employee challenges such as walking a certain number of steps or climbing Mt. Everest through distance walked or run. Changes in employee behavior have been seen in response to the challenges, such as parking at the far end of the lot in order to increase daily steps.

In 2013, BP America provided 14,000 employees, 4,000 retirees and 6,000 spouses with free Fitbit trackers as part of their wellness program. The program enabled the company to reduce their health care costs to less than the average growth rate of U.S. insurance premiums of 6 percent.

Concerns with privacy are growing as information from the Fitbit is relayed to the employer, if not directly to the boss, at least to a third-party who tracks the data, which some consider too high a price to pay for cutting costs such as insurance premiums. San Diego’s World Privacy Forum founder Pam Dixon says “the focus on preventive health at the expense of privacy is dangerous.” She says with the devices tracking steps per day the reach is not that far, but in time their connection capabilities will be quite sophisticated.

Under the Affordable Care Act (Obamacare), companies are allowed to use as much as 30 percent of annual insurance premiums rewarding their employees’ healthy behavior. Technology companies are paying attention. Apple is releasing its new health tracking app called HealthKit this year. Fitbit is highlighting software that makes it easier to log the activity of even individual workers if companies want.

Appirio Inc. CEO Chris Barbin says about 40 percent of his staff participate in voluntary fitness programs that include uploading their activity using Fitbit. He says privacy protections are available for those reluctant to share their data. Using information collected on employees who lost weight and became more active, Barbin was able to negotiate a 6 percent savings on their company’s health insurance costs because he was able to show the shared information to the insurance company.

Daniel McCaffrey is a consultant and behavioral scientist for Endeavour Partners who says privacy risks with the devices are relatively low because really the only data collected is steps, activity, calories and weight. However, as technology advances and integrative platforms increase their data capabilities the wellness programs and devices will have to respond with more extensive security measures, including the legal implications involved in HIPAA (federal privacy regulations).

Employers looking to launch their own corporate wellness programs are facing challenges that requires an informed, strategic approach to minimize risk. Simply trying to reduce costs such as insurance premiums through tracking employees’ exercise through Fitbit devices and similar trackers may not be enough incentive for many employees who do not want their bosses looking over their shoulders and tracking their activity without some guarantee of privacy.

By Beth A. Balen

Employer Healthcare & Benefits Congress

2 Responses to "Fitbit Allows Boss to Track Employee Exercise to Cut Insurance Costs"

  1. Tim   September 3, 2014 at 8:26 am

    That is actually something I have wondered why companies haven’t done already – use these fitness things to bring down the cost of healthcare. Fitbit certainly could do that (You’d just allow your data to be shared with the insurance company) but why not also sites like Runtastic or exercise apps like Xbox Fitness/Wii Fit/etc…? Seems to me that that is a untapped market with a lot of potential…

  2. Tabitha Farrar   September 2, 2014 at 4:54 pm

    Very Cool!!

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