Controlled group disclosed too late

[cathyw]

Just found out that client is part of a controlled group since 2018 (even though we ask this question every year).  The transition period for coverage expired 12-31-19.

Plan #1 is a very small 401(k) plan with a generous match.  Because of the controlled group status, one participant who was NHCE is now HCE due to top paid group, and we had to redo the 2019 ADP/ACP testing which now fails.  QNECs will be contributed for 2019. 

Plan #2 is an 80-person 401(k) plan that converted to safe harbor match as of 1-1-20.  2019 ADP results remain the same and refunds were already made.

Plan #1 will not pass 410(b) for 2020, although plan #2 would pass, on a controlled group basis.

Is the only solution to combine both plans for ADP/ACP current year testing for 2020?  Plan #2 won't be happy with the prospect of a failed test and refunds for another year.

Thanks.