My employer has introduced something similar. If you submit to a "health screening" you get credits that essentially cut your deductible in half. For us the things they check are weight, body fat, blood glucose, blood pressure, cholesterol, and whether or not you smoke. So there is a needle involved. The testing is done by an external company and they swear up and down that my employer only gets aggregate, not individual, information (i.e., "20% of your employees have a BMI of 30" or something to that effect, not "that guy in cube 8 has 40% body fat!" I also work for a fairly large company so I feel pretty confident that there truly can be aggregated results (as opposed to a smaller company where it might be more "obvious" who the more expensive/risky employees were). Also, I'm in pretty excellent health by any of the metrics they're monitoring, so I really don't care whether or not my employer knows about my insanely low cholesterol numbers. I might feel differently if that weren't the case.
My company does also offer or sponsor a lot of wellness programs (there is a little fitness center with classes on site, you can get a free consultation with a dietician over the phone, there's a weight watchers at work group, etc.) and they claim they'll use the aggregate information as part of deciding what other wellness offerings to add. I'm guessing they may also use it to decide what kind of things might be more or less costly to include in the insurance we're offered, but frankly, I think they can figure that out without the data. I think they are also hoping that getting the information will motivate some employees to make lifestyle changes and ultimately cost them less in premiums.