From my time working in BUPA, it would be standard practice for a company to cancel an employee's company paid membership once the person left and I imagine it would be similar for VHI company group schemes as well. Ultimately, it's a decision for the company to make, subject to the contract of employment, with perhaps some input from the employee if they were in a high enough position (e.g. making it a term of the redundancy package).
Regarding the letter from VHI, from reading other threads, it seems that it's VHI practice to continue the policy on an individual basis, but I'm not sure how or if they inform the member of this.
What your wife should do is contact VHI, inform them she wishes to keep her membership, but that because VHI never informed her of her options, she feels it's unfair to pay 6 months of membership. Bargain them down to the last three. This is important as three months (or 13 weeks to be exact) is the longest length of time she can have no cover before having to serve waiting periods again. So if her policy was cancelled on say 1st January 2009, if she agrees to rejoin from 2nd April and pay from that date then VHI legally have to recognise the previous membership.
Alternatively, if the pre-existing waiting and/or maternity waiting periods aren't an issue, then she should just rejoin form now and ask them to waive the initial waiting period. VHI used to do that quite frequently, but I'm not sure if that's still the case.