S Corp SEHI problems

2 brothers own a gym, held in an S Corp.

The corporation pays their individual health insurance policies.

They record the payments as officer's salary, report in box 1 on their W-2's, in box 14 as SEHI, and deduct the premiums on the front of their Forms 1040.

Does the fact that the corporation does not have a group insurance plan make this not work?

Also, if TPT responders think this is okay, what happens if they hire part-time employees? And they do not offer them health insurance?

If you do a search on the forums for SEHI you'll find your answer but the short version is no, the old reimbursement and reporting rules are no longer valid under ACA when you have more than one employee.

See: Employer Group Plan Required?

The conclusion on this thread was that this is OK, but now, under ACA, these wages are subject to FICA.