Can An S-Corp Pay For Health Insurance? 
For the W2 employees and perhaps for dedicated 1099 contractors of an S Corporation the employer paying for or towards these employee 's coverage is quite straight forward . From a tax and accounting perspective its gets more complicated for persons who are more than 2 % eligible shareholders in the company . The bottom line is that company paid insurance premiums for more than a 2 % shareholder must be treated as wages to that owner/shareholder . So , the only way the S-Corp can deduct the amount it pays towards owner health insurance as a business expense is by including it as part of the shareholder 's salary . Owner -LRB- s -RRB- health insurance costs can no longer be declared as an insurance expense or employee benefit expense on the S-Corp 's taxes . The effect on the S-Corp 's net income is the same , but this does result in an increase in net taxable income for the owner -LRB- s -RRB- / shareholder -LRB- s -RRB- . It is possible that the owner/shareholder will recapture some of this by deducting it from their Adjusted Gross Income on their Form 1040 . However , the situation can be further complicated by various state laws that may not allow for a one-person corporation to purchase health insurance for the owner and effectively forcing them to purchase individual health insurance coverage that they pay for themselves . And , just to make things even more complicated , if the owner/shareholder or their spouse is eligible to participate in any other subsidized health plan they ca n't take the deduction from Adjusted Gross Income -LRB- AGI -RRB- on their 1040 for medical insurance premiums paid for by the S-Corp . So the answer to your question is sometimes `` Yes '' and sometimes `` No '' because a variety of circumstances can influence the answer . My advice is to seek out an experienced health insurance broker who can determine your specific circumstances and advise you on how to approach them . 