Does giving someone a 3% top-heavy minimum help you pass 410(b) coverage issues?

Yes, although you hardly have a choice in the matter.

Be careful on this, however, depending upon what type of plan document you are using. If you have a design-based safe harbor, then you need to be able to pass 410(b) by treating the employee as not benefiting if his allocation is solely due to top heavy. 1.401(a)(4)-2(b)(4)(vi)(D)(3).

Not so fast. You are correct about the issue, but not about the reference. My recollection is that the rule about passing the testing excluding the employees who only receive the top heavy minimum is not a coverage rule. The coverage testing is to be done including them as benefitting. It is actually used to determine wheteher the top heavy formula causes the plan to be a safe harbor plan under 401(a)4. If it fails a 70% ratio, then the rate group testing under 401(a)4 would need to be employed.

My emphasis

( 3 ) Top-heavy formulas. In the case of a plan that provides the greater of the allocations under two or more formulas, one of which is a top-heavy formula, the top-heavy formula does not fail to be available on the same terms to all employees merely because it is available solely to all non-key employees on the same terms as all the other formulas under the plan. Furthermore, the top-heavy formula does not fail to be available on the same terms as the other formulas under the plan merely because it is conditioned on the plan's being top-heavy within the meaning of section 416(g). Finally, the top-heavy formula does not fail to be available on the same terms as the other formulas under the plan merely because it is available to all employees described in §1.416–1, Q&A M–10 (i.e., all non-key employees who have not separated from service as of the last day of the plan year). The preceding sentence does not apply, however, unless the plan would satisfy section 410(b) if all employees who are benefiting under the plan solely as a result of receiving allocations under the top-heavy formula were treated as not currently benefiting under the plan. For purposes of this paragraph (b)(4)(vi)(D)( 3 ), a top-heavy formula is a formula that provides the minimum benefit described in section 416©(2) (taking into account, if applicable, the modification in section 416(h)(2)(A)(ii)(II)).

My edit didn't go through, so I'll try again! I agree that 410(b) testing, in and of itself, is unaffected by the above. My point was simply - be careful. If you have a design-based safe harbor, and you just rely on a 410(b) pass without considering the above, you can muck up your safe harbor.