What happens if an employer continued to report the PS-58 costs even though that is no longer permitted under the final split dollar regulations? What should the employer do now, if anything, to correct this?

You state it is no longer permitted, so I assume the plan is not grandfathered? Assuming it is not grandfathered, I would switch to Table 2001 rates immediately. I have seen this happen a few times and the employers decided to correct it now, but do nothing for the previous years. The chances of the service catching it are fairly low. The risk being if the service does catch it at some point, the employer would need to report the income and there may be some penalties.