When Rami Rafeh was finishing his master’s degree in health care policy management at Columbia University, he was tasked with a project to create a “disruptive start-up.” When it comes to health care and wellness businesses, he soon realized it was a cluttered space. He wanted to do something unique, but also rooted at the core of what causes most of the health problems that people deal with every day — lack of physical activity.

“The basic problem is, there are credits out there that are underutilized and employers want [their employees] to make use of their insurance credits,” he explains. “So, that’s why we created Spott3r, in order to show people, look you have this benefit where you can get credit on your insurance for using a gym, chances are you don’t notice this benefit, you’re looking at other things.”

Spott3r — named after a spotter for a weight-training session — finds people at gyms, or through employers and benefit brokers and advisers, and offers to check with their insurance company to see if they have a credit for their gym membership they aren’t already engaging. Right now, most of Rafeh’s app users have been identified through the New York City gyms that he and his team frequent or have partnered with, but he sees an opening for employers to start working with his group directly; and for brokers and advisers to bring this to their employer client’s attention.

“So if an employer says it’s important to get their employees working out … if a broker believes in our vision, they can suggest this,” Rafeh says. “As a broker, say you have [a client] with 30,000 employees. You can say, ‘It looks like one of your agenda items is to reduce claims, well I partnered with a company called Spott3r.’ The benefit broker uses it as a talking point.”

Rafeh formed the company in June 2012 but didn’t start piloting the program until last year because he was conducting research into the potential market for a service like this. “It turns out that a third of insurance companies, or about 80% of the privately insured lives out there, have this gym credit available,” he says. He did the math — that’s 12.5 million to upwards of 24 million eligible people.

Employers and brokers

His partnerships with benefit brokers and employers are still in the preliminary stages. Andrew Prevost, president and broker at The Meltzer Group in Bethesda, Md., says they were drawn to the Spott3r idea because “the way Meltzer Group runs their business is, we always try to connect the dots when it comes to clients and clients that may help them grow their business.” Prevost’s company happens to provide benefits to a lot of gyms, so his first step is simply making introductions with his clients to Rafeh to continue his initial mission of finding people at gyms to offer his reimbursement services.

However, Prevost says they may soon introduce the concept to employers for their wellness initiatives, the next step that Rafeh says he envisions taking with this company. “The way any benefit consultant would look at this is, this is a hard sell on the benefits side, because wellness is sometimes way down low on the totem pole,” Prevost says. “But at the same time, it’s a value-add because you get them to the gyms and if you have insurance already that offers these credits, it’s a win-win.”

He adds: “I think any broker worth their weight is trying to innovate and listen to new ideas to help their clients.” He acknowledges there’s no real commission opportunity for the broker here, but the potential to impress and meet a need in this area for certain clients is very real.

One employer, for instance,  got so excited upon hearing about Rafeh’s app,they’re considering dropping their current health insurance coverage in order  to partner with Spott3r to increase their employees’ wellness.

“This is a rather flexible and broad opportunity for our specific employee group — we’re young demographically — and a plan to access any gym of choice … in the Spott3r network and get reimbursed is appealing,” says Dr. Nedal Shami, COO of City MD, an urgent care facility in New York with about 1,500 employees. “The low cost of administration, plus the employee can engage directly with the app … we like the look and feel of the website.”

Shami says he’s focused on nutrition in the past from a wellness perspective with his employees, so this is a different approach than what they’ve done before. “We’re changing our insurer to one that offers reimbursement,” he says as a testament to how interested their group is with signing on with Spott3r.

Next steps

Rafeh says he’s being measured in his roll-out of the app right now. He’s proactively getting the word out to people in gyms in New York, but not branching into other regions and cities, yet. He doesn’t want to overload his system and maintain quality. However, if someone finds them on the web from a different city, he won’t turn them away.

He also says he knows many wellness vendors approach employers and benefit brokers about their capabilities every day. While “our obvious goal would be to go after the employer,” he says, they’re not planning on proactively pitching this group until Spott3r has grown its company a bit more, and its results. But again, if an employer comes directly to them, he won’t turn them away.

The business end of the app is pretty simple. Rafeh’s Spott3r team takes an administrative fee out for putting the reimbursement together. “It’s usually a cumbersome process and we submit it for them,” he says about why it’s so under-utilized and why there may be a clear place for this type of company in the future.

“It’s providing something differentiated in a cluttered environment in order to get people active and healthy,” Rafeh says. “We can get [the reimbursement] to you on average within two weeks.” He says they’re working on bringing that average down, as well.   

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