Basically, the government will reimburse companies 65% of the cost of coverage if they bill the former employee on COBRA only 35% of their cost…they will do this via a reduction in the payroll taxes the company has to send in to the government.
So, if your company shut down (like mine did), it doesn’t do squat for you because the company for which I was working is out of business, is not paying the insurance company directly (I had to go to an individual/conversion policy) and that company is not paying payroll or paying in payroll taxes, so there’s no way to administer it.
Pretty much if you’re laid off but your company stays in business and continues to provide insurance to its employees, when their HR department sends you a notice of your right to continue on COBRA, the rate you are going to be asked to pay should be 35% of their cost, and they should be able to recoup the cost through tax credits.