May a plan exclude an intern (even if she met LTPT conditions)?

A 2023 BenefitsLink discussion aired some observations about whether an employment classification of intern is or isn’t a classification sufficiently distinct from an age or service condition that a plan may exclude an intern who met age and service conditions for treatment as a long-term-part-time employee. https://benefitslink.com/boards/topic/71384-ltpt-interns/.

Interpreting ERISA § 202(c) for a situation that might involve some similarities, the IRS states:

“The student employee exclusion in section 403(b)(12)(A) of the [Internal Revenue] Code is a statutory exclusion based on a classification (students performing services described in [I.R.C.] section 3121(b)(10)), rather than on service.”

And:

“Although [26 C.F.R.] § 31.3121(b)(10)-2(d) provides that hours worked is a factor in determining whether an employee is a student, as well as providing an unsafe harbor if an employee normally works at least 40 hours per week (which is equivalent to 2,000 hours a year), the statutory student exclusion is not based principally on service.”

Additional Guidance with Respect to Long-Term, Part-Time Employees, Including Guidance Regarding Application of Section 403(b)(12) to Long-Term, Part-Time Employees under Section 403(b) Plans, Notice 2024-73, 2024-41 or 2024-42 I.R.B. --- (to be published Oct. 7 or 15, 2024), available at https://www.irs.gov/pub/irs-drop/n-24-73.pdf, at A-5 & footnote 7 (emphasis added).

Does this change our thinking about whether a for-profit employer’s plan may exclude an intern from elective deferrals?

It seems Notice 2024-73 is introducing some new terminology in an effort to deal with the long-standing ability of 403(b) to exclude students from deferring and having that exclusion not violate the universal availability requirement.  The position in the Notice seems to accept an interpretation that there are two components to the exclusion - one being a student (based on status and not service) and the other being an ERISA LTPT employee (based principally on service), and that being a student permits the exclusion to stand. 

Question 6 adds that becoming a "former ERISA LTPT employee" cannot be excluded under section 403(b)(12)(D) to exclude the individual from getting a match or NEC.

The new terminology in the Notice references "ERISA LTPT employees" and "401(k) LTPT employees" in Section VII with the request for comments:
Additionally, comments are requested on any rules with respect to section 401(k) LTPT employees (including former section 401(k) LTPT employees) that should apply differently for ERISA LTPT employees under section 403(b) plans.

This interpretation of this Notice conceivably could open the door for using "intern" as a classification based on status, but the Notice comments that more is coming about plans other than 403(b)'s.  I want to see what gets issued in a notice about 401(k)s.

This whole issue seems to be adding layers of complexity and increased data collection that are going to make plan administration significantly more complicated.