C Corporations and LLCs taxed as C Corporations can offer CHOICE to any W-2 employee without ownership restrictions. Passthrough entities (S Corps, partnerships, and LLCs taxed as either) have exceptions: anyone owning more than 2% of the entity cannot receive tax-free CHOICE reimbursements.
Independent contractors (1099 workers) are never eligible for CHOICE, as it's an employee-only benefit. It's the employer's responsibility to correctly classify workers and determine ownership thresholds.