That's a rather convoluted and tax inefficient system in place! It would be simpler for the company to pay the insurance company directly and charge BIK on the employees. Additionally, this would make the insurance much cheaper for the employees- basically, they get their insurance for the cost of PAYE + PRSI + USC, say a max of 52% of the insurance premium and can reduce this by the TRS claimed from Revenue.
As the employees get a cash payment from the company it can't be treated as a BIK since it's not 'in kind'. In essence, I'd say that the best treatment is to treat it as additional salary or if preferred a 'round sum expense allowance'. Either way, they will pay PAYE, PRSI and USC on it.