In the first place, the gesture of your management is highly laudable though the unfortunate employee afflicted with cancer happens to have just a year of service in the organization.
Coming to your queries, I think that by this time all her leave would have been certainly exhausted and the inevitable option of leave on LOP would be in place in view of her short span of service and longer duration of treatment. Therefore,
(1) Stoppage of salary from April,2020 onwards for her absence,if any due to her continued treatment of the disease will not at all be illegal; better you get a formal leave application for leave on LOP from her.
(2) Leave on LOP for a genuinely serious disease like cancer cannot affect the right of the concerned employee to Avail of company-sponsored mediclaim facility or vice versa.
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