If the LLC covers the health insurance premiums for the members, does the amount get deducted from the member's capital account?
See http://www.irs.gov/publications/p535/ch06.html : "If a partnership pays accident and health insurance premiums for its partners, it generally can deduct them as guaranteed payments to partners." Since LLCs are taxed as partnerships, that should still apply.
So, that means that the insurance premiums are included in the calculation of profit/loss which is used determine the change to each member's capital account.
But, note the word "generally" above. Partnership taxation is tricky. Best to ask an accountant for your situation.