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HRM 546 Week 4 Assignment Scenario Two Cost Club
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HRM 546 Week 5 Assignment Formative Assessment
Activities Health Insurance Costs versus Privacy

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Health Insurance Costs Versus Privacy
Computers by Design (CBD) is a small computer systems sales and
service business located in the Midwest. The owners of CBD, Abigail,
Megan, and Andy, are concerned about rising health care insurance
costs. Abigail has researched the issue, and has learned that CBD can
better control insurance costs by only hiring people who are less likely
to make claims—the healthy, the fit, and the nonaddicted. She has
proposed to the other owners a two-step program.
First, CBD would conduct preemployment health screenings,
including voluntary genetic testing. It would not hire anyone who
smokes or uses drugs, has any genetically linked propensity for an
expensive disease, or is not physically fit.
The second step would be to give every employee a 12-month notice to
stop using tobacco and nonprescription drugs and to submit to
random, monthly testing. Employees would also be placed on a fitness
and weight control plan. Professional assistance would be available at
no cost to help them stop using tobacco and drugs and to help them
meet weight and fitness targets. Employees who meet the goals would
be allowed to stay with CBD. Those who refuse would be given a
severance package and discharged.
What are the legal issues involved here? Which of the measures
proposed by Abigail are legal, and which are not? Explain the legal