I did a little more digging and found out this is a VEBA type account, so the amount shown on the 1099NEC represents all amounts contributed plus the earnings.  Since the taxpayer is not retired, nothing was/could be used at this time.  The employer withheld per employee a specified amount as directed by the VEBA on a class by class basis and turned over the funds to the administrator designated by the VEBA.

Something went afoul of the rules at the VEBA level, necessitating the termination of the plan within the VEBA and the return of contributions and earnings to the members.  As mentioned above, my client received a 1099NEC from the administrator.  

Given this, I don't think this has anything to do with the employer so I don't think the 4852 is the answer.  I am leaning toward including it as "other income" with an explanation that the client is not in a trade or business, and thus not subject to self-employment tax.  While there is the question of Medicare tax, the amount in question is not material so maybe I will just wait to see if IRS comes looking for it.

Is this a good course to follow or is something better, given the obstacles involved with getting the program to just employee Medicare tax something?  The employee only Medicare tax involved is approximately $400.