Let's say children, grandchildren, and parents....
This states that yes, they are entitled to the SE Health deduction, even when they don't have a Sch K-1, but their Box 1 wages amount includes the cost of health insurance....
https://www.irs.gov/pub/irs-wd/[removed].pdf
Office of Chief Counsel
Internal Revenue Service
Memorandum
Number: [removed]
CONCLUSION
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)
