Compensation

Corp sponsors 401(k) SHM plan, definition of compensation is 415 safe harbor, about 10 participants, including the owner.

Box 1 and box 5 of w-2 have different amounts, Code D is $18,500.

Accountant not taking into account medical premiums for the 2% + shareholder.

Getting conflicting answers, isn't medical a fringe benefit?

If medical is under a section 125 plan, I would say no, medical is not a fringe benefit.

Company does not have a Section 125 plan.

Check out the IRS website here: https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-compensation-and-medical-insurance-issues

I believe that this has been the subject of previous discussion on  Benefitslink. The amount paid by the company for the 2% or greater shareholder's medical is Box 1 W-2 wages, and so is comp for 401(k) and other qualified plan purposes.