The company I worked for did not pay the health insurance premiums for its employees and the health insurance was cancelled with no warning. COBRA was not offered, and the company continued to deduct 1/3 of the health insurance premium out of employee's paychecks. Is this legal?

Cancellations of health insurance for non-payment of premium are invariably retroactive, so it is not surprising that premiums continued to be taken out over a period of time that was ultimately not covered. The employer needs to EITHER arrange for reinstatement of the policy (by paying the back premiums) or to return any premiums that were deducted. However, this is not an overnight process. It might well take a couple of weeks for this to be sorted out. If one or the other does not occur, your recourse is to contact the US DOL. But give them some time to clean up the mess.

As I recall from my days working for a national insurance carrier, MA is (or at least was) the only state that required prior notification before a cancellation for non-payment. However, my memory is that it is the insurance carrier, not the employer, who is required to provide this notice, and that the notices were not required until 72 hours before the termination took place. Given the inefficiencies of the US postal service, this means that you may well not receive the notice until after the termination has already occurred. Keep in mind that that I left the insurance carrier in early 1998 and thus my memory of the regs may be faulty, or they may have changed.

COBRA is the continuation of existing insurance. Since the entire plan was cancelled outright, there is no existing insurance and therefore no COBRA can be offered.