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COBRA

applies if the employer has twenty or more employees
does not apply if the employee was terminated for "gross misconduct", but the burden of proving that is on the employer
in most cases, COBRA provides for continuation of health plan coverage for up to 18 months following the work separation
COBRA rights accrue once a "qualifying event" occurs - basically, a qualifying event is any change in the employment relationship that results in loss of health plan benefits
in the case of an employee with a spouse (see your state's definition of "spouse"), it is essential that an employer notify both the employee and the employee's spouse of the employee's COBRA rights
the U.S. Department of Labor's general guide on COBRA for employers is accessible in PDF format at http://www.dol.gov/ebsa/pdf/cobraemployer.pdf (PDF file)
effective February 17, 2009, amendments to the COBRA law require employers to subsidize the health benefit continuation payments during 2009, as outlined below:

eligible individuals pay only 35 percent of their COBRA premiums, and the remaining 65 percent is paid by the employer and reimbursed via a tax credit
the premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months
to be "assistance-eligible" under the amendments, the qualifying work separation needs to have occurred between September 1, 2008 and December 31, 2009
for employers with fewer than 20 employees, the Texas law would apply as noted below, and the same subsidies would apply to the payments made by the ex-employee
for detailed guidance from the U.S. Department of Labor on these changes in the law, see the fact sheet at http://www.dol.gov/ebsa/newsroom/fsCOBRApremiumreduction.html
employers may find guidance from the IRS on how to report the subsidies on their federal wage reports on the IRS site at http://www.irs.gov/newsroom/article/0,,id=204505,00.html

Texas "COBRA" law - the Small Employer Health Insurance Availability Act requires health benefit continuation rights for employees (and their beneficiaries) of company health plans if the company has two to 50 employees; the state law is very similar to the federal law, but with a shorter benefit continuation period (up to six months following the qualifying event); if the employee had federal COBRA coverage as well, the six months under Texas law begins after the federal COBRA period expires; more information is available from the Texas Department of Insurance at http://www.tdi.state.tx.us/pubs/consumer/cb040.html.