If the corporation pays for health insurance, it is added to Box 1 of the >2% shareholder's W-2.

In my opinion, income tax withholding should be done on that amount, but I think many tax preparers don't bother doing that.

Box 14 is only informational, so there is no 'requirement' to put it there.  However, it makes things clearer to explain why Box 1 is higher, and if you are not preparing all of the shareholder's 1040, it makes it much easier on the shareholder.

I don't know what RcReports shows, but "compensation" for a shareholder includes all benefits.  So if the corporation is paying for health insurance, retirement plans, etc. that is all "compensation".  That effectively means that if they have benefits, their salary/wages could be lower than if they received no 'benefits'.

All of that is true whether there is a 1095-A or not.  And the Self Employed Health Insurance deduction on the 1040 is limited to their Box 5 wages.  So if they had zero 'real' wages, and only had the health insurance benefits added to Box 1, they would not qualify for the Self Employed Health Insurance deduction because they didn't have any 'real' wages (Box 5).

If they have a 1095-A, when you enter that into ProSeries, you need to 'link' that to the business.  And make sure that spot on the K-1 has the Box 5 amount.  Doing those two things will trigger the program to do the complicated calculation for the Premium Tax Credit combined with the Self Employed Health Insurance deduction.