Can a Fitness Tracker Save You Money on Health Insurance?

Some employers are offering financial incentives for getting in shape.

Some health insurance companies are considering offering discounts for people who use fitness devices.

By Amir Khan

Your fitness tracker measures your steps, distance, sleep and more, but did you know that it might also be able to save you money?

A handful of health insurance companies now offer discounts and incentives for hitting physical goals like walking a certain number of steps per day. Insurance experts say these wellness incentivizes could slim down your belly while fattening up your wallet - but only if the programs become mainstream.

While no health insurance companies currently market these discounts directly to consumers, several offer incentives for employers to encourage workers to use bands such as a Fitbit or Jawbone. These savings are then passed down to employees, explains Vaughn Kauffman, U.S. health care payer ​advisor with the consulting and professional services network PricewaterhouseCoopers. 'We have seen insurance companies offering programs to employers that include discounts on premiums for employee use of fitness bands,' Kauffman says. 'So far, we have not seen insurers selling plans directly to consumers that include activity tracker use. But we know insurers are exploring these options.'

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Fitness trackers typically encourage people to walk 10,000 steps, or roughly five miles, per day, which is the number of steps recommended by the U.S. Surgeon General to see a number of health benefits, including a decreased risk of heart disease, obesity and diabetes. Not all users hit 10,000 per day, but the majority increase their step count significantly, which Kauffman says is a win for insurance companies and beneficiaries. As he explains, people who use fitness trackers become more engaged and aware of their behaviors, which is the first step toward making meaningful, sustained lifestyle changes. 'Better engagement equals more informed beneficiaries, which equals lower cost,' he says.

A study published last year in the journal Translational Behavioral Medicine found that when given the choice between paying 20 percent more for health insurance or exercising more, the majority picked the fitness route. In fact, 97 percent of the 6,548 enrollees met or exceeded their goal of 5,000 steps per day after one year.​​ 'If used effectively, wearables have the potential to improve the impact of wellness programs by encouraging healthier behavior or simply by increasing team cohesion - for example, by letting colleagues compete with each other for the number of steps they take per day,' he says.

Nearly 90 percent​ of companies offered some type of incentivized wellness program as of 2013, according to a survey of 151 companies by Fidelity Investments and the National Business Group on Health. One company, the Silicon Valley startup Appirio, went the fitness tracker route and gave a Fitbit to each of its 400 employees. Appirio then negotiated a deal with its insurance provider, which ultimately reduced its health care costs by 5 percent, or $280,000.[Read: Making the Most of Your Fitbit.]Welltok, a health analytics company that helps employers manage wellness programs, conducted a survey and found that 96 percent of consumers would engage in healthier behaviors if they were rewarded - and 30 percent of the 1,000 people surveyed chose lower insurance premiums as the reward of choice. 'It doesn't need to be limited to fitness trackers,' says Michelle Snyder​, senior vice president and chief marketing officer at Welltok. 'We are starting to see our clients rewarding people for tracking other behaviors, such as eating healthier or joining condition management programs.'

The idea isn't far-fetched, Kauffman says. In fact, it's already a common practice in the auto insurance industry. 'Auto insurance companies offer drivers a small device they can plug into their dashboards so the company can monitor their driving over 30 days,' he says. 'Safe drivers are then eligible for a discount.'

So how do you get your employer or your insurance company to set this type of program up? You need to demand it, Snyder says. Talk to your boss and ask him or her to enroll​. Call your insurance provider and say you're willing to participate. But most importantly, shop around for insurance companies that offer these programs, and consider voting with your wallet. 'As the trend towards retailization in health care continues, and we see more consumers shopping for their insurance,' Snyder says, 'it makes sense that they will look for companies that help them save money and reward them for taking actions to be healthy.'

[Search: 5 Health Insurance Mistakes Costing You.] And although there are no insurance companies offering these programs direct to consumers now, Snyder says it's only a matter of time until they become widespread. As she explains, it's a win-win for all parties. ​'Consumers win, because as they pay more out of pocket for their health-related costs, they are looking for ways to save money and would be more likely to participate in programs utilizing tracking devices to motivate them to get healthier,' she says. 'For insurers, rewarding consumers for engaging in healthy behaviors helps them show more value to their members, and helps them better manage the costs and health of their populations as their members stay healthier, longer.'