COBRA is not just a nasty, hooded, poisonous snake that can kill with a bite. It's also a law regarding group health insurance continuation after an employee leaves a company.
Which one would you like to deal with?
Solution: Exit Package. Slightly different than a severance package, but you're giving the former employee a way to purchase individual health insurance. This usually saves them money, and saves the employer's RAF( Rate factor for group health insurance) a few points.
Plus, if the former employee gets individual cover, you don't have a COBRA hassle, in terms of gov't filings.
Fun with Snakes!