Yes, it is legal. Your daughter's employer does not have any legal obligation to maintain a particular type or level of insurance, or insurance provider, for the benefit of its employees; the employer has no duty to care for its employees' medical needs. It can change insurance if its insurance is too expensive; it is not obligaged to suffer financial harm for its employess, and it can make this change even if it will disadvantage or harm employees. This, unfortunately, is all a logical consequence of having a system where private employer, who are allowed and even expected to try to maximize profit for themselves, investors, owners, shareholders, etc., are also relied on to provide insurance coverage--a very expensive proposition--for employeees; employees' needs conflict with the employer's needs and interests, but the employer is NOT required to put the employee first. Your daugher could have, in the law's eyes, paid for her own medical care regardless of her insurance coverage--that may not have been feasible as a practical matter, but legally, she had the right to pay and conversely, her employer did not have the obligation to maintain her coverage. The employer could have even cancelled coverage entirely (stopped paying it), possibly at the cost of paying a penalty, but that penalty is less than the cost of health insurance; the law does not mandate providing any insurance, let alone adequate, for employees.
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