I really doubt that state law would allow her to cancel health insurance like that. She could institute a risk based premium as many businesses do, but she likely violated the law in cancelling the insurance of your colleague. I understand that there is no desire to rock the boat. She's a fool and the company isn't likely to do well under her stewardship. I hope it sustains itself long enough so you can retire or go elsewhere.
Still trying to see if there is a law about what she did. I'll be surprised if there was since years ago I had a full time job with benefits only one day I went to work and discovered that I was part-time without benefits. At the time the law covered that. Employment at will !!!!
Somebody brought up soda and health warnings. Yes I noticed them today. Not on the cans/bottles but on soda machines. "Balance and Play", "Try a low cal beverage", "Did you exercise today ??" and "diet drinks are bad for you". Meanwhile I saw "healthy snacks and drinks" machine at the doctors office. No they did not have soda or candy but they did have Red Bull and Monster energy drinks.