My understanding is that it depends on if there is only the one person, or this is a true benefit and it was part of everyone's payroll.

I think we are stating it the same way: "but since employee benefits are added back for S Corp 2% shareholders it wouldn't be double dipping."

I found this: "The corporation's HSA contribution is a tax-free fringe benefit to the employee. ... You, the shareholder-employee, deduct on your individual IRS Form 1040 the HSA payments that your S corporation added to your W-2 income. You complete your Form 1040 just as if you had made the payments personally."