All employees are key employees

[Belgarath]

Just want to make sure I'm not missing something. Had an inquiry from an employer who sponsors a cafeteria plan where the employer (C-corp) has 3 owner/employees only - ALL are Key. No NHC employees.

I assume this has no possibility of passing testing, as I'm not aware of any provision similar to qualified plans where coverage/nondiscrimination is automatically passed if there are no NHC employees. So they would automatically fail the 25% key employee concentration test.

Agree, or am I missing something?