An S Corp has a self-insured health plan. The Company is currently paying the premiums for several minority owners who are not employees. It would appear that the company should charge these people for their coverage. Actual premium amount? Premium amount + administrative cost (same as COBRA participants). Or some higher amount representing fair value of benefits?

Obviously some other issues to be raised - do they meet plan document eligibility conditions. Covered (probably not) under any stop loss insurance.

Anyone deal with a solution - other than discontinuing the practice?