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@jgcpa wrote:

Thank you for your reply. Each person had a single health plan. None were family plans. Therefore, husband cannot consider her plan as paid under his business, correct?

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Sigh.  It's a "gray area".  Prior to 2012 I probably would have have said her insurance would not qualify under his business, but now I would take it all under his business if the payment came from a Joint account or his business account.

§162(l) allowed the deduction for himself, his spouse and his dependents.  The question arises if the "plan" is "established" under his business.

(1)  Although the Publications use the word "policy", the Code clearly says "plan".  His business may have a "plan" to pay for insurance "policies" for himself, his spouse and his dependents. 

(2)  CCA 201228037 discusses if Medicare qualifies for the SEHI deduction.  In that guidance, question #3 says that Medicare premiums for a spouse and dependent DO qualify as SEHI (assuming all other criteria are met).  Medicare is only in each person's name.  So it is indirectly saying that the individual policy does not need to be in the business owner's name.  Logically, that principle should extend to non-Medicare insurance.

https://www.irs.gov/pub/irs-wd/1228037.pdf

I know some people will strongly argue against it, but in my opinion it can be deductible under his business.   But because of the uncertainty of it, I would let the client know in writing that it is a "gray area".

However, if the wife's insurance was paid by a separate account that was only in her name or business, then it would be difficult to say that his business "plan" paid for it (unless there was a reimbursement given), so I don't think I would be comfortable putting it under his business in that situation.