Is a company obligated to make a SIMPLE contribution for the entire year once they elect to adopt one? Can they terminate it prior to year end? Are there any caveats to doing this? Thanks in advance for your responses.

I believe an employer can stop a SIMPLE during a year merely by announcing that the plan is terminated and that no further deferrals will be taken from the payroll. However, the employer is on the hook for the matching (or general) contribution from Jan 1 through the termination (deferral cessation) date. The termination notice should probably contain the termination results i.e. the accounts are IRAs and the employees have control and can't lose their accounts, that anyone who has not deferred $2,000 can make up the difference into a traditional IRA and whatever else some bureaucrat or litigator can think of.

According the the LRMs, any amendment to the plan becomes effective as of the beginning of the year AND must conform to the content of the plan notice for the year. Thus, I do not believe that an employer can discontinue the plan or accepting elective deferrals once it has started for a year.