"The ADA's business necessity requirement will be easier to satisfy than its job-relatedness requirement. No doubt the employer would realize a significant cost savings on its insurance premiums if all its employees were non-smokers, and reduced insurance premiums is a business necessity of almost any employer. An employer who tests its employees to make sure that they are not smoking in order to protect its low insurance premiums will likely meet the business necessity test on the cost savings basis alone."
Oh, I missed that, LOL. :)
The cost savings idea is much like the fictional website that an employee created on their own time, from their own pc--something like WeycoSucks.com. That employee would be fired, certainly, because the company would lose good will and presumably revenue.
The only difference with the smoking is that an employee's smoking doesn't harm the company's reputation, though each situation makes a difference to the bottom line.
In any case, although these people will apparently be out of a job, perhaps Michigan will ultimately pass a law protecting employees' right to smoke.