An employee's dependent may choose to continue coverage under a small employer health benefit plan if:
(1) the dependent:
(A) is under one year of age; or
(B) has been covered by the small employer under a plan for at least one year;
(2) the dependent loses eligibility for coverage because of the death, divorce, or retirement of the employee, as provided by Subchapter G, Chapter 1251; and
(3) the Consolidated Omnibus Budget Reconciliation Act of 1985 (Pub. L. No. 99-272) does not require continuation or conversion coverage for dependents of an employee.