The company cannot cancel the health insurance, assuming the employee has paid his/her premiums (employee share), during the term of the contract--for example, until the new open enrollment period. However, during the open enrollment period or any other time when the company may legally change its coverage, it  could elect to stop providing--or cancel--health insurance. That's because the law does not actually require companies to provide health insurance; the Obama health care law will give them the choice of providing health insurance or paying a penalty, but they are free to choose the penalty. The fact that the employee is sick is irrelevant; a company is not obligated to provide or continue health insurance because an employee may need it.