HCE only otherwise excudable for ADP Test

[Guest padmin]

401k plan has immediate eligibility. Owners wife is hired late in the year and contributes. She is the only eligible employee that is a statutory exlcusion and is obviosuly an hce. The excludable employee group includes only her and thus the ADP test passes for the excludable employees. The question is does the statutory exlcusion group pass coverage as all of the nhces are in the non-excludable group? Any input appreciated.

[ETA Consulting LLC]

Sure. The rules apply separately to each population. So, when one population has only one employee, then that population automatically passes. Of course, you can elect to test the HCE with the non-excludable population, but you don't have to.

Good Luck!