In today’s fast-paced business world, prioritizing employee health and wellness is no longer optional—it’s a strategic imperative. Companies in the healthcare retail and consumer health sectors are increasingly recognizing the value of wearable technology, such as fitness trackers and smart rings, in promoting healthier lifestyles among their workforce. What’s more, many of these devices now qualify for reimbursement through Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs), offering a tax-advantaged way to invest in employee well-being. This article explores the growing trend of reimbursable fitness trackers, the eligibility requirements for HSA/FSA spending, and how businesses can leverage these tools to enhance workplace wellness programs.
The Growing Importance of Wearable Health Technology
Wearable fitness trackers, such as Fitbit, Garmin, Oura Ring, and WHOOP, have evolved from novelty gadgets to essential health-monitoring tools. These devices track critical biometric data, including heart rate, sleep patterns, blood oxygen levels, and metabolic health metrics, empowering users to make data-driven decisions about their wellness. For businesses, integrating wearables into employee health programs can lead to reduced healthcare costs, improved productivity, and higher employee satisfaction.
The healthcare industry is placing a stronger emphasis on preventive care, with research underscoring the impact of lifestyle factors like sleep and physical activity on overall health outcomes. For example, sleep scientist Matthew Walker, an advisor to Oura Ring, has highlighted that “sleep is the Swiss army knife of health,” linking poor sleep to chronic diseases like cardiovascular issues and diabetes. Wearables provide actionable insights that align with this preventive approach, making them a valuable asset for both individuals and organizations.
Understanding HSA and FSA Eligibility for Fitness Trackers
HSAs and FSAs allow employees to set aside pre-tax dollars for qualified medical expenses, reducing their taxable income and overall healthcare costs. While HSAs are tied to high-deductible health plans and roll over annually, FSAs are typically employer-sponsored and have a “use-it-or-lose-it” policy, often requiring funds to be spent within the plan year. Both accounts can be used for a range of healthcare expenses, from prescription medications to medical devices, but fitness trackers require specific conditions to qualify.
The IRS classifies most fitness trackers as “general health” products, meaning they are not automatically eligible for HSA/FSA reimbursement. However, with a Letter of Medical Necessity (LMN) from a licensed healthcare provider, these devices can qualify if they are deemed essential for treating or preventing a specific medical condition, such as obesity, heart disease, or sleep disorders. The LMN must detail the medical necessity and confirm that the expense would not have been incurred without the condition.
Some wearables, like the Oura Ring, have gained explicit HSA/FSA eligibility due to their advanced health-monitoring capabilities. As of December 2023, both the Oura Ring and its membership are reimbursable, as they provide medically relevant data such as heart rate variability (HRV), body temperature trends, and sleep stage analysis, which can assist in managing conditions like chronic fatigue or sleep apnea. Similarly, certain Garmin products, such as the Index BPM smart blood pressure monitor and HRM-Pro Plus heart rate monitor, are eligible without an LMN, as they are classified as medical devices.
How Businesses Can Leverage Reimbursable Wearables
For B2B companies in the healthcare retail sector, reimbursable fitness trackers present a unique opportunity to align product offerings with corporate wellness initiatives. Here’s how businesses can capitalize on this trend:
- Enhance Employee Wellness Programs: Offering HSA/FSA-eligible wearables as part of a corporate wellness program can incentivize employees to prioritize their health. Companies can partner with brands like Oura, Garmin, or Amazfit to provide discounted devices, streamlining the reimbursement process through platforms like Flex or Truemed, which simplify HSA/FSA payments. This not only boosts employee engagement but also demonstrates a commitment to holistic well-being.
- Educate Employees on HSA/FSA Benefits: Many employees are unaware that fitness trackers can qualify for reimbursement with proper documentation. Businesses can host workshops or provide resources to guide employees through the process of obtaining an LMN and submitting claims. This education can increase utilization of HSA/FSA funds, ensuring employees maximize their tax-advantaged accounts.
- Partner with Retailers and Brands: Healthcare retailers can collaborate with wearable tech brands to market HSA/FSA-eligible products. For example, platforms like buyFSA.com and FSAstore.com offer curated lists of approved items, making it easier for consumers to shop with their HSA/FSA cards. By integrating these payment options at checkout, retailers can tap into the growing consumer demand for health tech.
- Promote Preventive Health: By encouraging the use of wearables, businesses can align with the healthcare industry’s shift toward preventive care. Data from wearables can help employees monitor metrics like heart rate and sleep quality, reducing the risk of chronic conditions and lowering long-term healthcare costs for both individuals and employers.
Navigating the Reimbursement Process
To use HSA/FSA funds for fitness trackers, employees typically follow these steps:
- Verify Eligibility: Check with the HSA/FSA provider to confirm whether the device qualifies. For devices requiring an LMN, consult a healthcare provider to obtain the necessary documentation.
- Make the Purchase: Use an HSA/FSA card at checkout, or pay out-of-pocket and submit a claim for reimbursement. Retailers like Oura and Amazfit offer HSA/FSA payment options through third-party services like Sika or Truemed.
- Submit Documentation: Provide a receipt and any required documentation, such as an LMN, to the HSA/FSA provider. Ensure the receipt includes the retailer’s name, purchase date, product description, and total amount.
- Track Deadlines: For FSAs, purchases must typically be made within the plan year, though some plans offer a grace period. HSA funds, however, roll over indefinitely, providing more flexibility.
The Future of Reimbursable Wearables
The market for HSA/FSA-eligible wearables is poised for growth, driven by increasing consumer awareness and policy changes. Recent legislation has expanded HSA/FSA contribution limits, with self-only HSAs rising to $4,300 and family HSAs to $8,600 for 2025. As more consumers leverage these accounts for health tech purchases, retailers and brands must adapt by offering seamless payment options and clear eligibility guidelines.
Moreover, advancements in wearable technology are blurring the line between fitness trackers and medical devices. Innovations like Ultrahuman’s metabolic health monitors and Lumen’s breath CO2 analyzers are pushing the boundaries of what qualifies as a reimbursable expense, particularly for conditions like diabetes or metabolic disorders. As these devices gain regulatory approval, they are likely to become more accessible through HSA/FSA spending.
Conclusion
Reimbursable fitness trackers represent a powerful convergence of health technology and financial benefits, offering businesses a chance to enhance employee wellness while tapping into a growing market. By integrating HSA/FSA-eligible wearables into corporate programs, educating employees on reimbursement processes, and partnering with leading brands, healthcare retailers can position themselves as leaders in the consumer health space. As the industry continues to evolve, staying ahead of trends in wearable tech and HSA/FSA policies will be critical for driving business success and fostering healthier workplaces.
