The Office of Chief Counsel of the Internal Revenue Service issued Memorandum 201912001 on 03/22/2019 addressing whether health insurance costs of employee family members of 2-Percent Shareholders are deductible on their personal returns.
The conclusion was: An individual who is a 2-percent shareholder of an S corporation pursuant to the attribution of ownership rules under § 318 is entitled to the deduction under § 162(l) for amounts that are paid by the S corporation under a group health plan for all employees and included in the individual’s gross income, if the individual otherwise meets the requirements of § 162(l).
Source document: https://www.irs.gov/pub/irs-wd/201912001.pdf
