Let me clarify. The failed filing problem is associated with a Form 7206 for health insurance purchased as a Sch C sole proprietor attachment. If you receive an S-Corp or LLC Form K-1 you can claim the deduction for health insurance paid by the S-Corp/LLC on an associated 7206, but you have to also declare the amount paid for insurance as income. In this case you cannot claim the deduction if you pay the insurance yourself. That is not the case with a sole proprietorship Sch C because you can purchase it personally and still be eligible for the deduction. See instructions for Form 7206 for details.
