Increase W2 wages by the amount of SE health insurance premiums

[Dmitriy Fomichenko]

Looking for a feedback from tax experts on the following scenario:

A client is a self-employed (has an LLC taxed as S-corporation). Pays himself reasonable salary of 35% of the business's net profit. Pays health insurance premiums from his business account. Right now they are reported on the K1 in box 17 so that the deduction can be taken on a personal tax return as shareholders's health insurance premiums.

Looking for ways to maximize the dedications. So the question is: would it be possible to add the health insurance premiums on top of his wages as fringe benefits?

So let's say his salary was $50,000 and he also paid $10,000 in health insurance premiums. He reports $60,000 in the box 1 (wages, tips, other compensation) of his w2.

And $50,000 in the box 3 (Social security wages).

This way he pays taxes only on $50,000 but used $60,000 amount to calculate his company profit sharing contributions and therefore is able to contribute larger amount into his Solo 401k.

Any issues here? Thanks!