The amount shown with code DD in box 12 for health coverage is not included in any of the three "wages" boxes (1, 3, and 5). That's why you don''t see it subtracted anywhere, because it wasn't ever included anywhere in the first place.

Contrast this with the amount for code "D" in box 12 (your 401(k) contribution). It is not taxable for purposes of federal income tax, but it is taxable for purposes of social security tax and Medicare tax, hence you see the difference between box 1 and boxes 3 & 5.