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well, getting ready to unplug the office computer a few days shy of 62, hopefully all the $ I have pinched and saved will last until 70. I live rather frugal, so I think I can manage. as for me, truly looking forward to not having to rush off to work and having that burden. when mom wakes and is ready to go is a lot different than a set work schedule. And I have more time for church, as I said earlier, some baking, and I bought a Psaltery a few years ago and looking forward to learning that a lot better. what a marvelous instrument for a quiet soul like mine. my special thanks to Dave Baker for the web site and the opportunity to share. we shall see if somewhere own the road I actually take the trouble to share how things are going.

Of course check the plan document, but that seems unlikely. Your either fish (a 5% owner) or foul (not a 5% owner); that one may be in a "position of control" is of no consequence. I assume you've run through the various ownership attribution rules and concluded that the individual is not a 5% owner by attribution.

Self funded plans are not subject to essential health benefits. Yes the plan sponsor can do this. Yes, emergency services are an essential health benefit.

Yes. Sure.

Were they formerly a 5% owner? If they were a 5% owner during 2016 (since that was the year they turned 70.5) then they have to continue taking RMDs, even if they later became a non-5% owner.

It's an interesting theory, but I'm not aware of any case law to your point. But I would think if you can show them that the 2012 and 2013 audits included an examination of the ESOP, you might be able to get them to drop those years from their current inquiries. Perhaps there is still someone at Entity A who could speak to that.

I'm willing to bet that your plan document, especially if it's a volume submitter document, excludes from participation "employees classified as independent contractors" (or similar language). This means that the plan does not cover employees who are classified (correctly or not) as independent contractors. This exclusion results from the famous Microsoft decision. I'm also willing to bet that your plan document doesn't define compensation as the amount reported on the W-2, but as the wages required to be reported on the W-2, a.k.a. information required to be reported under sections 6041, 6051 and 6052. So regardless of whether or not the employer actually provided a W-2 to the employee, if the wages should have been reported on a W-2 (because the person was an employee and not an independent contractor) then it is still plan compensation. But I think you're missing the point. The issue of employee vs independent contractor status goes well beyond implications to the plan. As ESOP Guy said, you do not just get to decide that someone is an employee or an independent contractor. See this page for starters, especially the section titled "Consequences of Treating an Employee as an Independent Contractor" : https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee

Not true. There are many other threads on this topic. Advise her on the topics that you are qualified to advise her on, and advise her to consult an expert on anything else. Someone "advised" her to change how she is being paid after all.