Is a Top Heavy contribution subject to coverage rules?

Situation:  Plan is Top Heavy

2 HCE, one owner, one not )and non-Key)

2 NCHE

owner defers max

2 NHCE defer enough to get 3% match

Non-owner (N/O) HCE does not defer at all so no match

N/O HCE is due 3% TH contrib.  That gets contributed to the discretionary source.

Is there a problem here?  No NHCE getting a 401(a) allocation.

I believe you have coverage failure and will need to give PS contrib to NHCEs. Might be a good time to suggest SH match for 2023. And may want to suggest a 3% PS for all in 2022.

Hopefully you've got enough flexibility in your document, and demographics, that perhaps cross-testing a 1% "PS" allocation to one NHCE would be enough.