I feel like my boss is trying 2 get me 2 quit my job rather than let me go. Is there a benefit 2 her if I quit rather than4her2lay me off?

She has not been able to give me enough work for quite some time so I am transitioning from a full time employee to a contract employee which is fine with me. Since she lost a big contract in June she has only been able to give me 5-7 hr/week. I feel like she has been doing things the past few month trying to get me to just quit. She dropped my health insurance without telling me right before I was scheduled for surgery, won't release my most recent paycheck until I sign the new contract, which HAS to be illegal. I just feel she wants me to quit and I have a coworker who is going through the same and feels it too. Is there a reason she might be better off if I quit rather than her letting me go?