The Federal COBRA mandate only applies to companies who employ 20 or more employees (regardless of how many you insure). If you have fewer than 20 employees, you are not a COBRA-eligible company. The major insurance carriers (Aetna and IBC) will not pay claims for a COBRA participant if the employer is not COBRA-eligible.
There was just a recent court ruling that a company who voluntarily provided COBRA for one former employee, when they were not a COBRA-eligible company, could not refuse to offer COBRA for future terminated employees. Avoid this tremendous liability and do not offer COBRA if you do not meet the Federal requirement! If you need assistance on how the government calculates eligibility, please contact us.