I believe this practice is fraught with difficulty. http://www.kushnerco.com/article.php?fileName=IndividualPolicies – an article that speaks to some of the issues of concern. I’ve also copied and linked to IRS regs – there is a way to do this. That being said, recent guidance, especially as it relates to using an HSA to accomplish this as of 2014 – appears to be ending this practice. I urge caution and suggest that you ask any vendor for legal opinions or for a hold harmless for the employer should the plan not pass muster with the IRS.

Employer-Provided Accident and Health
Plan
Coverage under an employer-provided
accident and health plan that satisfies
the requirements of section 105(b) may
be provided as a qualified benefit
through a cafeteria plan and is
excludible from employees’ gross
income. Section 106; § 1.106–1. The
nondiscrimination rules under section
105(h) apply to self-insured medical
reimbursement arrangements (including
health FSAs).
The new proposed regulations
specifically permit a cafeteria plan (but
not a health FSA) to pay or reimburse
substantiated individual accident and
health insurance premiums. See Rev.
Rul. 61–146 (1961–2 CB 25), see
§ 601.601(d)(2)(ii)(b). In addition, a
cafeteria plan may provide for payment
of COBRA premiums for an employee.
For employer-provided accident and
health plans and medical
reimbursement plans, the definition of
dependents is the definition in section
105(b) as amended by the Working
Families Tax Relief Act of 2004
(WFTRA), Public Law 108–311, section
207(9) (118 Stat. 1166) (that is, a
dependent as defined in section 152,
determined without regard to section
152(b)(1), (b)(2), or (d)(1)(B)). See Notice
2004–79 (2004–2 CB 898), see
§ 601.601(d)(2)(ii)(b). For purposes of
the exclusion from employees’ gross
income for accident and health plans
and for medical reimbursement under
sections 105(b) and 106, the spouse or
dependent of a former employee
(including a retired employee or a laidoff
employee) or of a deceased employee
is treated as a spouse or dependent. See
Rev. Rul. 82–196 (1982–2 CB 53); Rev.
Rul. 85–121 (1985–2 CB 57), see
§ 601.601(d)(2)(ii)(b).

Nice post ! thanks for sharing.