COBRA and the closing of a company subsidiary

[Guest Semantics]

A parent company is about to shut down operations of a subsidiary company. All of the subsidiary employees will be terminated.

The only health coverage available to the employees of the subsidiary is through a fully insured plan. The parent company's employees that are not part of the subsidiary are only offered coverage through a self-funded health plan.

The parent company has asked if it is permissible for them to allow employees and other QBs of the subsidiary to elect COBRA continuation only in the self-funded plan.

Does anyone know if this is allowed? I'm not able to find any clear answer in the resources I have available.

Thanks in advance