And if the government imposes an insurance mandate on all employees, then the school should do what any intelligent employer would do: fire all employees, rehire them as "contractors," and let them insure themselves as self-employed individuals.
You wrote:
“Why does it have to be that complicated?”
They’re being sued. Closing the school and reopening it may be the only legal way of ending their obligations to their teachers and making the lawsuits essentially moot.