Based on the provided excerpts, an S corporation can reimburse the health insurance policy premiums of a 2-percent shareholder who is an employee without failing to be an eligible employer. However, it is explicitly stated that a QSEHRA may only be provided to employees, and an arrangement provided to former employees, retirees, or non-employee owners is considered a group health plan within the meaning of section 5000(b). This distinction is crucial in understanding the eligibility for QSEHRA benefits.
The definition of an "eligible employee" under § 9831(d)(3) includes any employee of an eligible employer, with certain exceptions that do not directly address the status of employee owners. However, the absence of specific exclusion of employee owners from the definition of "eligible employees" under § 9831(d)(3) and the explicit allowance for S corporations to reimburse 2-percent shareholders under Notice 2017-67 suggests that employee owners who are considered employees may participate in a QSEHRA.
Therefore, if an employee owner meets the criteria of being an "eligible employee" under the terms of the QSEHRA and the arrangement complies with the requirements set forth in § 9831(d) and related guidance, they can reimburse themselves for health insurance through a QSEHRA. This conclusion is drawn from the general principles outlined in the provided excerpts, as there is no direct statement explicitly addressing the reimbursement of health insurance for employee owners through a QSEHRA.
Sources:
Notice 2017-20
§ 9831. General exceptions
Publication 974 (2022)
Notice 2017-67
§ 9832. Definitions
T.D. 9867
