The employer picking up 100% of the premiums (which, in a self-funded plan like this, are paid into the plan trust) just makes this kind of stuff even more likely. If an employee or employee's covered spouse or dependent has health issues requiring $XXX,XXX/year of treatment, getting rid of the employee will directly save the company $XXX,XXX/year. Quite a powerful incentive for scumbags, even if it's completely immoral and illegal (ERISA 510).

Of course. Since the company actually does have some decency (being privately held helps, too) eventually they just decided, as I hear, to simply convert to a (still generous) regular insurance plan.

Granted, the other reason was that because of Pajamacare, health plans that are "too good" get taxed excessively.