Uncertain Future for Employee Wellness Market

Jan 12, 2018

Mobile wellness devices such as the Fitbit and Apple or Garmin watches are ubiquitous these days. Many of us wear them to hold ourselves accountable for our physical fitness. But they’re also becoming a tool that employers are using with a separate, but related goal to have healthy employees and controlling healthcare costs.

The devices themselves are evolving and could soon do more than just counting your steps or keeping track of your heart rate. And that means they could face a different kind of regulation than what governs them today, according to health policy contributor Barbara Zabawa

Zabawa is the owner of the Center for Health and Wellness Law, and a clinical assistant professor in the College of Health Sciences at UW-Milwaukee. She wrote about fitness trackers and the changing wellness incentive landscape recently for the American Bar Association.  

With the potential for wellness devices to move into a more clinical use, such as treating or trying to prevent chronic diseases or conditions, Zabawa notes that these companies have to be more aware of the possible Food and Drug Administration regulations for medical devices.

What determines FDA involvement is a device's or product's intended use, which has to be directly related to treatment and prevention of disease according to Zabawa. "A lot of these devices do in effect do that, but the intended use is really for keeping track of your steps or a lot of other functionalities."

Zabawa says if fitness tracking companies decide to move into the larger healthcare field and away from consumers, the FDA would also require device registration and emphasize consumer safety. "When you get into more the clinical realm, the devices are maybe going to be more invasive or going to be making claims about being able to cure or prevent (diseases or conditions). The FDA will have to step in and insure that (those products) would do that safely. They don't want any device or drug out in the marketplace that will hurt the consumer or give them a false belief about something."

The FDA released a revised guidance about wellness devices and mobile apps just last month according to Zabawa. But for now, the FDA does not consider them medical devices.

While wellness trackers could have a bigger future, Zabawa says that wellness incentives from employers could become a thing of the past. What prompted that buzz was a recent District of Columbia court decision in the AARP v. EEOC case.

Zabawa explains that the AARP sued and won over the EEOC over their rules over the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA), that said employers could impose financial incentive to encourage employees to give up their personal health information.

Now that an official court decision proved the EEOC overstepped its authority, Zabawa predicts a difficult time ahead for the EEOC. "(They're) going to have a hard time finding an incentive amount that all employees, regardless of their income, would feel would still be a voluntary wellness program," she says.

"The current rules are no longer going to be in existence as of January next year, so employers - many may feel they don’t want to bother with the incentives," she adds. "There’s a lot of disruption in the employee wellness marketplace right now...It's going to be a rocky year."