This is a follow-up on the posting of December 16 regarding health insurance:
Must a health insurance policy be held by the organization in order to qualify health insurance premium payroll deductions for tax-free treatment under a Section 125 cafeteria plan? or can the employee hold the policy?
Also, must the employer pay at least a portion of the premium, or can the full amount be withheld through payroll deduction?
I'll give this question "my best shot" -- employee benefit plans are not my forte. Further, there may be some insurance industry regulations or requirements of individual insurance firms that can affect this issue (e.g., I believe that Golden Rule Insurance here in Wisconsin does not permit a church to own (or even reimburse premiums) the policy).
Having said this, I do not believe that the Code stipulates the owner of the insurance plan nor requires partial payment by the employer. However, before a church and its pastor jumps into such as arrangement, its leadership is well-advised to clearly understand and communicate the specific requirements of Section 125 -- especially its use-or-lose-it component.