Instead of a gym membership, innovative companies start to offer programs for improve employees’ hea

Collecting Health Data Is All in the Wrist for Some Employers

A growing number of employers are embracing wearable devices and offering incentives, like health insurance discounts, when workers sign up for them.

With the skyrocketing popularity of fitness tracking devices like Fitbit and Jawbone UP and the growing number of companies looking for ways to improve employee health, the worlds of corporate wellness and wearable tech were bound to intersect.

The ability of tracking apps and devices to help users set goals and measure their progress makes them attractive tools for corporate wellness efforts, but it is also raising concerns about how employers will use such data.

A court case in Canada involving the use of Fitbit data to support a woman’s personal injury claim is stoking some of these concerns. The case, as reported in Forbes last November, involves a woman whose Fitbit data will be used to help prove that she is suffering from the effects of an accident from four years ago. Some observers worry that the case could open the door for insurers to use wearable data in claims decisions or by employers who might use the information in deciding promotions or other career decisions.

“People don’t want employers to use health data against them,” said Harry Wang, director of health and mobile product research at Park Associates, a market research firm. “I think the employer understands that if you try to use data against an employee, like denying someone a promotion, they will definitely get a lot of pushback. But if you tie the data to health behavior only and the employee understands that if they don’t manage their health it will cost the company money down the road, there won’t be a problem. Over time employees will understand this.”

But despite these concerns, a growing number of employers are embracing wearable devices and offering incentives, like health insurance discounts, when workers sign up for them. The adoption of wearable devices by companies and insurers is increasing as spending on corporate wellness incentives has doubled to $594 per employee since 2009, according to a study by Fidelity Investments and the National Business Group on Health. In fact, employers are expected to integrate more than 13 million wearable fitness trackers over the next five years, according to a 2013 study by market research firm ABI Research.

And given the number of consumers willing to use these devices, the trend is likely to continue, Wang said. Nearly three-fourths of employees surveyed in a recent PricewaterhouseCoopers report said they would use a smart watch and more than 60 percent said that they would wear a fitness band if their employer paid for it. The study, titled “The Wearable Future” also showed that about 70 percent of consumers said they would wear employer-provided wearables streaming anonymous data to a pool in exchange for a break on their insurance premiums.

“The emergence of fitness trackers gives employers a way to measure participation in wellness programs,” Wang said. “In the past if you offered a gym membership you had no way to know if employees were using it. With fitness rewards like badges and cash and discounts, it’s very important for employers to know that their employees are doing things in the right way and that their ROI is validated.”

Andrew Rosenthal, group manager, wellness and platform at Jawbone, a wearable device company in the fitness tracking market, said that employers aren’t interested in the personal habits of individual employees, but in the wellness activities of the workforce as a whole. The San Francisco-based company recently launched UP for Groups to help employers get their workers walking. The service allows corporate customers to buy discounted fitness trackers in bulk and aggregate data from all of the devices. Each UP for Groups team will have an administrator who creates group challenges and sends members motivational messages, Rosenthal said.

He added that employers “know what price their stock closed but not how well their employees are doing, how well they are sleeping.”

UP for Groups’ data is anonymous and no organizer can see someone’s personal data without that group member’s permission. According to a company blog post announcing the service, “no data appears in the dashboard until at least five participants are syncing an activity simultaneously,” such as sleep or steps.

However, Seth Perretta, a principal with Groom Law Group in Washington, D.C., said that employers must address privacy issues when considering adopting wearable devices in their wellness programs. The Health Insurance Portability and Accountability Act protects personal health information generated by hospitals or doctors, but the data generated by tracking devices may not be covered. Employers must be careful with how they use this information.

“If you’re using Fitbit to identify medical conditions or rake an adverse employment action because of data you learn from Fitbit, I’d counsel that this data be used for the benefit of the individual,” he said. “I would be very thoughtful around issues of surrounding the Americans with Disabilities Act and HIPAA. Employers must act in the interest of their employees.”