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IRC 105(h)(7) is related to highly compensated individuals and limits allowed exclusion from taxable income for such category. It doesn't provide age limitation or time period for former employees.
See here - http://www.law.cornell.edu/uscode/text/26/105
According to IRS publication 15b - http://www.irs.gov/publications/p15b/ar02.html#en_US_2013_publink1000193641
For this exclusion, treat the following individuals as employees.
•A current common-law employee.
•A full-time life insurance agent who is a current statutory employee.
•A retired employee.
•A former employee you maintain coverage for based on the employment relationship.
•A widow or widower of an individual who died while an employee.
•A widow or widower of a retired employee.
•For the exclusion of contributions to an accident or health plan, a leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control.
So far - in your example - health insurance premium pay by the employer is NOT reported as taxable income to employees. Assuming these are NOT highly compensated individuals - IRC 105(h)(7) would not be relevant.
We also need to verify IRC 106 - http://www.law.cornell.edu/uscode/text/26/106
Except as otherwise provided in this section, gross income of an employee does not include employer-provided coverage under an accident or health plan.
Because a former employee you maintain coverage for based on the employment relationship is treated as an employee - the Employer's portion of the medical insurance is NOT taxable for these individuals.