Premium Payment Question

[bzorc]

A small S-Corp has one employee who does not work in the state where the corporation is located. Since he was out of state, the company health insurance policy did not cover him, so the employee obtained his own policy and had the premiums paid with after-tax dollars. In addition, one in-state employee was paying her family portion of the health insurance with after-tax dollars as well.

The company wants to adopt a premium only plan. The in-state employee family coverage payment is easy, but my question deals with the out-of-state employee. How is the payment of his policy, which he pays for on his own, handled through the POP plan? Does the company increase his salary by the amount of the premium, and then run the premium payment through the plan? The company prepares its own payroll so there is no payroll service to ask this question of, and my knowledge of the POP payment rules is limited.

Thanks for any replies.

Just found out that the out of state policy is an individual policy, so the POP plan is not an option.