alternative health plans in governmental agency

[Guest Junk]

I am employed by a county government in the state of Florida. My county/employer will pay for single coverage health insurance with no charge to me. I do not take this insurance because I am covered under my wife's family plan with her job. I have heard of "alternative medical reimbursement benefit plans" that allow a person, such as my self (that does participate in their employer's HMO), to use the funds that were allocated for my single coverage health insurance with my job to be used for medical expenses that are not covered by a family plan in reimbursement format for items such as co payments, prescriptions, mileage to the doctor, eyeware, dentistry work, etc.

My county government would like to implement such a plan and run the plan itself. We have only heard of insurance companies running these plans. Has anybody ever heard of a governmental agency running such a plan and what does the law allow?

The IRS people I have spoken to seem to think it would be an employee welfare benefit plan under ERISA USC 3 (1) ? My superiors do not want any problems with IRS or DOL. Can anybody offer any advice?