Mega Grocers, Inc. has been very concerned with the soaring health care costs which the company is incurring for the health benefits that it provides to its employees. The vice president of Mega Grocers, Inc. has submitted a proposal that suggests that one way to curb soaring health care costs would be to discourage unhealthy people from applying for jobs. Because of concerns about discrimination charges, the vice president has suggested that the way in which to accomplish this result would be to redefine job duties so that all jobs would include some physical activity. An example of this would be that all cashiers would be required to spend a certain designated number of hours in each workday in gathering carts or other shelf-stocking activities that would require, for that job, more physical activity than serving solely as a cashier.

The corporate vice president suggesting this policy has indicated that "a healthier workforce will lead to lower health insurance costs, lower absenteeism through fewer sick days and higher productivity."

Please discuss the issues that the company must consider in deciding whether to implement this recommendation and whether you believe that this policy is one that the company can implement without violating any applicable laws. Please discuss all laws that you believe would be relevant to that decision.

Mega Grocers, Inc. (the company referred to in Question No. 1) has been in negotiations and is a target for acquisition by Super Mega Retailers, Inc. Please outline the various forms that acquisition of Mega Grocers, Inc. could take and the pros and cons of each of those forms of acquisition from the standpoint of Super Mega Retailers, Inc.

Please discuss the issues that the company must consider in deciding whether to implement this recommendation and whether you believe that this policy is one that the company can implement without violating any applicable laws. Please discuss all laws that you believe would be relevant to that decision.

First of all, we should keep in mind that, in the U.S (except Hawaii), employers are not required by law to offer their employees health insurance benefits. But if they decide to offer their employees health insurance benefits, they have to comply with a series of laws that will tell them what coverage they have to offer and how they have to offer it. Today, most of the companies in the private sector offer health care benefits are covered by the Employee Retirement Income Security Act (ERISA). This is a federal law that sets minimum standards for health. So Mega Grocers have to comply with the rules in this law.