After talking with my client and having him provide me with his paystubs for the last three years, there is no indication that health insurance premiums have been added to his W2 income. It seems like his assertion that they are not included in w2 income is correct. 

In this case, he would not deduct them as self-employment health insurance premiums on his 1040 because the S Corp received the benefit of all employee healthcare premiums through a deductions from ordinary income.

It is still odd that the employer included medical insurance premiums for more than 2% on his K-1. Seems irrelevant to the tax return, at least.

Any thoughts?