My understanding of this rule is that a coverage test can be utilized for the two plan years following the plan year of the test. This can only be utilized if there has not been a change that would adversely affect the coverage testing results previously calculated.

My questions are:

1) Is there any test that would indicate if a change in the population (other than running the actual coverage testing) would not allow a plan to rely on the preious coverage results?

2) Has anyone had a problem utilizing this rule? For example, has anyone been audited and required to provide a coverage test because the auditor thought the pop. change would adversely affect the coverage issue?

3) In two above, did the new coverage test fail? If so, what was the remedy? Was it the standard options? Was there any penalty?

4) Does anyone have a reference where I can read more about this topic?

Thanks in advance for the responses.

Try http://www.mhco.com/Commentary/2004/coverage42904.htm

I find their "Back to Basics" Commentaries a useful resource.

Quinnfeld,

Thanks for the response. it definately speaks to the basics of coverage testing. However, I was looking for specific detail on the three year coverage testing option. Do you have another option? Does anyone else have an option?

Rev Proc 93-42 and Rev Proc 95-34