Wearable Devices Can Provide Cost Savings, but also Risks, for Employers


By Liz Carey

Sarasota, FL (WorkersCompensation.com) – For companies with wellness plans, wearable devices like FitBits can be a way to engage employees, but, experts warn, there could be some risks associated with them as well. 

While the jury is still out on how wellness programs impact workers’ compensation costs, the use of fitness trackers or wearable devices in wellness programs is beginning to take off.

According to a study from ABI Research, it’s estimated that by 2018, more than 13 million health and fitness tracking devices will be integrated into U.S. employers’ wellness programs. By the end of 2016, nearly 21 percent of US adults with online access used a fitness tracker, and as much as 46 percent of employers offered some sort of subsidizing for wearable devices as part of their wellness program, according to research from Health Enhancement Research Organization (HERO).

In fact, HERO found that wearables in wellness programs have been shown to not only engage employees, but to keep the employees in wellness programs longer. Their study showed that 54 percent of employers said more than 50 percent of their employees were still using their wearable devices six months after their wellness program launched, and 95 percent said they would continue offering fitness trackers as part of their wellness programs due to high employee satisfaction.

But the research on wearables in workplace wellness programs is still in its infancy.

"We see a lot of promise in the use of wearables as a component of a comprehensive workplace wellness program," said Jessica Grossmeier, vice president of research for HERO. However, "Early research supports that a device, on its own, will not change health behaviors over the long term."

But the research on wellness programs’ effect on workers’ compensation seems to show that employers with wellness programs focused on prevention combined with risk management and employee communication can see positive outcomes impacting their workers’ compensation programs.

According to the Institute for Healthcare Consumerism (IHC), companies that implement wellness programs see significant cost reductions, including:

Additionally, the International Foundation of Employee Benefits Plans (IFEPB) reports that for every $1 spent on wellness, employers can expect to save up to $3 in healthcare costs.

Those devices may have other uses, however. Experts say that not only can they be used in court as evidence, but they can also be used to determine if employees may have a disability that needs to be addressed.

According to Karla Grossenbacher, a labor and employment attorney with Seyfarth Shaw, LLP, data pulled from wearable devices can be used to track the location and activity of a user, as well as their emotional responses to situations.

“In the employment litigation context, wearable device data could help a factfinder determine whether a plaintiff is ‘disabled,’ has a ‘serious medical condition’ or suffered a workplace injury,” Grossenbacker wrote on the Law360 blog. “Data such as heart rate, physical activity level, number of steps taken, and sleep patterns could all be probative of an individual’s physical and mental state.” 

Additionally, the data could be utilized to see if a user’s heart rate increased to show emotional distress in harassment cases.

“In harassment cases, wearable device data could show whether a plaintiff’s heart rate went up when the claimed harassment occurred,” she wrote. “It could also provide probative evidence of whether harassment was severe and pervasive during the relevant time period. Wearable device data could also help prove or disprove any claimed emotional distress damages. For example, wearable device data could help demonstrate sleep loss or even an increased heart rate as probative evidence of anxiety.”

Gathering that data could leave employers vulnerable to lawsuits, Philip Gordon, co-chair of the privacy practice at Littler Mendelson PC, told the Wall Street Journal.

According to Gordon, using the data to track employees may put employers in a position that they should identify when an employee needs reasonable accommodations in accordance with the Americans with Disabilities Act.

If an employee doesn’t do as well on tracked activity on the job, an employee may need to worry about whether the data indicates a disability.

Even if the employee doesn’t bring up the disability, Gordon said, there is precedence for the employer being responsible for making accommodations if they had information pointing out the problem.

Wearable devices may create other problems, said Michael Stack, principal at Amaxx, a workers’ compensation consultant firm.

While the devices can be used to detect concussions in those wearing hard hats, or fatigue in employees wearing the devices, they can also be used to track the recovery of those who have already been injured on the job. 

But, Stack said, they can also be a potential vulnerability for employers.

“While wearable wristbands are still all the rage, some users have developed allergic contact dermatitis,” he said.

The devices also open the employers up to potential security problems. 

“Among the biggest concerns about wearables is the potential for a company’s proprietary information to get into the wrong hands,” he wrote on his blog. “The devices can record private conversations, take pictures and share information online. Because they can be connected to smartphones, data can be constantly transferred wirelessly. The wearables can also be plugged into a computer via a USB port and introduce viruses into the company’s system.”

Stack recommended that companies ensure that they establish policies for the devices including where they can be worn, and how they can be monitored. He also recommended that companies monitor their networks to make sure that data is not being sent through the devices.

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