LTD Through 125 Plan - Rev Rul 2004-55 Questions

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Company M offers a SEction 125 plan to its employees. One of the available coverages is long-term disability coverage. Company M pays for the entire premium for LTD coverage equal to X% of pay. Employees may select, during open enrollment, LTD coverage equal to x% of pay, 10+% of pay or 20 + x% of pay with employees paying the pre-tax premiums for coverages exceeding x% of pay. Assuming the coverage is self-insured, can Company M take advantage of Rev. Rul. 2004-55 by having an employee elect to include premiums in gross income, by having Company M impute in employees' gross income the cost of coverage equal to x% of pay with employees continuing to pay the difference but on an after-tax basis? Does it make a difference if the plan is self-insured? The facts of the Rev. Rul and PLR 200527012 were based on an employer buying an insurance policy from a third party carrier.