A startup health insurer trying to capitalize on digital services and simplicity is now offering members wearable devices and incentives for activity, another step in its bid to disrupt health insurance.

Oscar Health Insurance, a New York City-based health plan that markets itself as “a new kind of health insurance company,” is offering members free Misfit wearable fitness trackers and up to $20 per month in Amazon.com cash for those who meet walking goals.

“Everybody walks in NYC. Oscar members get paid for it,” Oscar wrote on Twitter in its announcement.

Starting in January, the company will make the Misfit Flash device, which sells for around $50, available to its 16,000 members free of charge. Members can wear a Misfit watch or clip a device to their clothing and get paid $1 for each day they walk at least 10,000 steps, or about five miles, with a limit of $20 per month.

The Misfit device, made by a company of the same name based in Burlingame, California, syncs with Oscar’s Apple iOS app (an Android version is coming next year) to track a user’s steps.

The steps needed to get the reward will start at a more reasonable 2,000 per day and gradually increase to 10,000.

Investing in walking, simple as it may be, can have a large return on collective health. As the former CEO of Kaiser Permante, George Halvorson, said, "There's almost nothing we can do for our own personal health that creates more personal benefit than walking."

Other insurers are using similar types of reward- and game-based wellness strategies to incentivize physical activity. UnitedHealthcare recently purchased a startup aimed at the mobile wellness space with games and contests, Humana is marketing a mobile rewards program, and Cigna recently unveiled a gamification strategy for its wellness programs.

But most of those and other insurers are focusing mobile wellness in the realm of employer-sponsored benefits. Oscar is focused on the individual market, primarily in greater New York City, through public exchange plans and unsubsidized plans. The company is also now selling in New Jersey and is rumored to be eying expansions to California and Texas.

The free wearables benefits is one way that Oscar is trying to differentiate itself. Even as it offers benefits similar to its established competitors — such as a $400 gym reimbursement — it’s also trying to pitch itself as markedly different from the traditional health plan.

All its plans feature free generic drugs and no copays or coinsurance. “You can also talk with a doctor anytime over the phone for free,” the company says on its website. Between simplified plan designs and perks like telemedicine and free wearables, Oscar and its backers are hoping to be a force for market change.

Oscar was founded in 2013 by Kevin Nazemi, a former Microsoft product manager, Joshua Kushner,  a former Goldman Sachs private equity associate, and Mario Schlosser, a former McKinsey consultant and Stanford-educated computer scientist who's now CEO. All them are under the age of 40, born after HMOs were created.
One of the first for-profit health plans created from scratch in recent memory, Oscar is among the most lauded healthcare startups, with a lot of expectations.

The company is backed with about $150 million in venture capital, including from Silicon Valley gurus Vinod Khosla and Peter Thiel and from Charlie Baker, the Republican Governor-elect of Massachusetts who is credited with saving Harvard Pilgrim from bankruptcy. The insurer's most recent round of investment gave it a valuation of around $800 million.

This article originally appeared on Government Health IT sister site Healthcare Payer News.