A Complete 2026 Health Insurance Update for S Corporation Owners

If you own an S corporation, the health insurance deduction is still available in 2026—but one small mistake can cost you thousands.

Here are three reasons to read this update:

The familiar three-step process still works, but overlooking a single reporting requirement can wipe out your deduction—even when you’ve paid every premium correctly.
Two often-overlooked rules continue to catch business owners by surprise: the box 5 Medicare wages limitation and the family attribution rule. Either one can derail an otherwise valid deduction.
Tax Tip: If your S corporation reimburses employees for individual health insurance, make sure you’re using the proper arrangement. Otherwise, you could expose the business to a penalty of up to $36,500 per employee, per year.