Individual Business Ethics Case Analysis
[Women and Health Insurance]
MBA 740: Legal & Ethical Issues in Business
Professor: Dr. Joseph A. Petrick
1. Who are the stakeholders involved and how severely are they impacted? Who is harmed and by how much? a. Market Stakeholders: (1) Women: They are forced to pay higher premiums, then men (high impact); (2) Men: will be negatively affected by the rate because it would be subsidized if the women’s rates go down (high impact); (3) Insurance company: are participating in a discriminatory act by charging men less for insurance than they are charging women. (high impact); (4) Other Employers: are influenced because employee-subsidized insurance plans offer all employees same benefit plan (medium impact); (5) Owners/Investors: are making more revenue by charging the women more than they are charging the men so they are making more money than they should (medium impact); (6) Customer: treatment to women could cause a case and is likely to result in lost future business and bad word-of-mouth publicity (high impact);
b. Non-market Stakeholders: (1) Governments: possible fraud inviting local, state and/or federal government regulation (medium impact); (2) Communities: community members become victimized and/or vulnerable to dishonest sales tactics by a local business (medium impact); (4) Media: will likely not report a single episode unless there are a large amount of women that go to the press or complain about the unfair rates that they are getting from the company (low impact); (6) General Public: erodes trust in insurance companies to take care of them as far as their health in general (medium impact).
2. What are the central ethical issue(s) and the relevant facts in this case? a. Central Ethical Issue(s): (1) charging women more for insurance is discriminatory; (2) Even if they decline maternity coverage they still get charged a high rate.; (3) risking loss of women altogether, company reputation for integrity and future business which could cause the to loose profit
b. Relevant Facts: (1) Even if women decline maternity coverage they still get charged a high rate; (2) the wage gap increases in the insurance market, and risked the loss of reputation and future business for company; (3) the insurance company charges women more for health insurance than men
3. RESULTS: To what extent do (should) the results of the action produce more benefits than costs to stakeholders in the short and long range? (Current: 1/Desired: 6) This case demonstrates extremely unacceptable under-emphasis upon good long-term moral results.
a. The insurance companies are charging women more for health insurance compared to men. The profit that the gain from charging women is more than it would be if they charged them the same price as men. Insurance companies feel that women use health insurance more than men, such as getting checkups, and screenings and women are the only demographic that can have children. There is a wage gap increases because women are forced to pay a higher insurance premium.
b. Insurance companies have a short term cost but if the government makes changes that will force companies to charge women and men the same price then there will be a long term cost to the company later in time.
4. RULES: To what extent do (should) the rules followed to achieve results respect the rights of others and adhere to standards of justice and fairness? Are appropriate duties and obligations fulfilled and properly prioritized? (Current: 1/Desired: 6) This case demonstrates
extremely unacceptable under-emphasis upon following the right moral rules.
a. Rights: charging women more is wrong. They should be treated fairly and women should have equal rates as men. It causes discrimination and it makes a women situation worse because they are paid less in wages and...
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