Different eligibility requirements for different classes of employees

[AKconsult]

I am trying to determine what type of testing would have to be performed for a plan that lets one group of employees in after 90 days of service, and the other group in after 30 days of service.

It seems like I need to do some sort of coverage or current availability testing. Would I use a safe harbor percentage? Would the otherwise excludable employees group come into play? I am having trouble thinking this through as I have never seen it.

[Tom Poje]

unless one of the people that comes into the plan under the 30 day rule is an HCE you shouldn't have a problem.

you should be able to test otherwse excludables separately, and if they are all NHCEs, then that group would pass.

[AKconsult]

Tom, I suspect that most of the HCEs are going to be in the group that is subject to the 30-days eligibility requirement. I am now thinking that I would treat this the same as you would treat it if you were aggregating 2 plans together for coverage and they had different eligibility conditions. I would run a coverage test assuming a 30-day eligibility requirement for everyone, but treat as not benefitting those employees who were subject to the 90-day requirement and weren't in the plan because they didn't work the 90 days yet...but then again, that seems too simple.

[Mike Preston]

Has to be a new plan, right?

Yes, it is that simple.