I understand that personal health information needs to be closely guarded, but really, no sympathy cards? In the past, I was one of the company representatives designated to attend the funerals of employees, spouses, and close family members. While I suppose I could have used that opportunity to grill the remaining family members about their health histories, the thought honestly never crossed my mind.
Discrimination is a bad thing for many reasons, but showing the people who spend the majority of their waking hours with you that you actually care about them, is simply good management. The goodwill that you generate will provide a lot more protection than strict adherence to a legal principle that alienates your employees. So, go to funerals, send flowers and cards, and then make your employment decisions based on each individual's knowledge, skills and abilities. That's what really matters in the long run anyway.