Under IRS Notice 2008-1, if you are an owner of more than 2% of an S corporation and you have a health insurance policy in your name with premiums paid by the corporation basically a plan has been established by the corporation for you the shareholder. This is not a self insured plan. It is simply health insurance premiums paid or furnished by an S corporation.
Also the premium payments are included in the wages for income tax withholding purposes on your Form W-2, but are not considered wages subject to social security and Medicare taxes if the requirements for exclusion under §3121(a)(2)(B) are satisfied meaning that medical or hospitalization expenses were incurred in connection with sickness or accident disability.
Currently there are no discrimination provisions under §106 dealing with contributions by employers to accident and health plans. As a shareholder you are allowed an exclusion from gross income for the insurance cost if you meet the requirements of §162(l) which states as follows:
“In the case of a taxpayer who is an employee within the meaning of section 401 (c)(1), there shall be allowed as a deduction under this section an amount equal to the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer spouse or dependent children … No deduction shall be allowed under paragraph (1) to the extent that the amount of such deduction exceeds the taxpayer’s earned income (within the meaning of section 401 (c)) derived by the taxpayer from the trade or business with respect to which the plan providing the medical care coverage is established.”