Designing Kitchens and Bathrooms - Whirlpool alcove install question

This is my issue, i have a 72x42 eljer whirlpool with integral skirt and tile flange, i can not get a clear answer on which is better as far as protection. The tub is going to be dual purpose and act as our shower soit it will be in a alcove, my question is regarding the tile flange, do i have to bring the backer board and tile down and over the tile flange and caulk the 1/8 gap of the top of the tub to the tile, or can i bring the backer and tile right down to the top of the tile flange leaving a 1/8 gap and caulk the gap. I would prefer to tile to the top of the flang rather than have to fur out either fur out the bottom row of tiles or even teh whole wall, i just think it will look much better if it comes right to the top of teh flange. But if i am asking for water problems, i will just fur it out. Any help will be appreciated. I am no carpenter but i am doing a great job so far just need some direction here

You can have the backerboard about 1/8" above the tiling flange, over hang the tile a little bit, then fill the small gap with caulk, or:

Fur out the studs so the backerboard goes over the flange.

I'de do my first option.