loserson

As GeoFay suggested, if there are no current employees in the HRA, it is not a health plan for ACA market reform purposes. In which case it is okay for the HRA to pay any §213 medical expenses, including medical coverage premiums, and there is no ACA violation. It's also excludable for purposes of §106, so retiree HRA is cheaper than paying taxable wages for a sinecure.

Yes, amend to mark the 5500s as final if that was their last plan year. See page 6 of the 5500 Instructions, left side, under Final Return/Report. If there are no more assets or liabilities, then you file a Final 5500 after a merger. If there was no short year for 2018 and the wrap was effective as of the first day of the plan year, then amend 2017 forms to mark as final. Also just good practice to mark as final. I have dealt with employers that were awash in different plans with different 5500s and it was sometimes difficult to tell if a 5500 was simply not filed for a plan or if a plan stealthily merged or terminated without filing a final 5500.

If you're worried about later investigations or audits, then often you can get by with keeping good internal records and notes of what happened and when, and what actions were taken to fix it (i.e. firing them and carefully monitoring the new folks). Drop it into a memo or other document, tag the fiduciaries and other important folks as needed (and save the email showing distribution). Include discussion in the memo of what sort of notification to EBSA (or IRS) might be appropriate and why you made the decision to notify or not notify. You might also include discussion of the issue in the minutes for the next meeting by fiduciaries, and any decisions made. Benefits counsel could be very helpful here. Save your documentation in the same place as other important plan information, so future people working on the plan can easily find it. That way, if the plan does get hit with an investigation or some other audit, even if the entire team is new hires and new vendors they can still explain what happened and show how responsible the plan was about it. If everybody's money is correct, and VFCP is not appropriate, and no DOL or IRS reporting needs to be amended, then there might not be any obligation to notify EBSA. Just a contract issue with a bad vendor. You could complain to EBSA, if you think snitching is warranted and want to stop these folks. EBSA allows anonymous complaints. It could throw a bunch of plans into investigations.

I'm not sure of the details of this plan benefit or this DRO, and I am no actuary, but my first instinct was that it was probably going to be a bunch of work to get her the same dollar amount. I am bad at the DB actuarial stuff, so I have to plead ignorance. But despite my ignorance, I agree with your perspective that this QDRO seems to me like maybe it would not be helpful to her. But if the plan qualifies the DRO, I think compliance is obligatory for the plan, isn't it? The plan could tell the participant "if we use a QDRO, you get $X overall, and if you withdraw it, you get $Y" and then if X is better or worse than Y she could choose to withdraw the DRO or not. But if it's valid and the plan qualifies it, and for some reason she had decided to proceed, then even if it's worse for her I think the plan still has to do it. It's possible that the DRO will not be qualified anyway, depending on how it's structured and on the plan procedures.

Threshold question is whether the IC classification was appropriate. If this was a misclassified employee, then the company may have to go back and fix a bunch of stuff and maybe correct how their current contractors are classified or how they are treated. If this was a correctly classified contractor, then presumably the worker-company relationship had some meaningful changes in the changeover (i.e. more than just job title and contract, and not just the employer electing to use 1099). If contractor classification was appropriate, or if you just want to assume it was appropriate and not go looking under rocks, then it's no more meaningful than if this worker was previously a vendor, a consultant, or a seconded employee working onsite. Those folks are not employees either. If they are pushing to give this worker credit for non-employee service, then maybe the company should re-examine their worker classification practices?

I would treat it as if they are two different property interests that just happen to be going to the same person. Proceed as if the alternate payee is Wife 1 and the surviving spouse is Wife 2. Even though the same person is both Wife 1 and Wife 2. Then determine whether the DRO is qualified.