410 b test failure options for average benefits?

Have a safe harbor 401(k) Plan. Deferral and match only. The plan fails 410b. If we run 401a4 test by allocation rate, it fails. Can we run it using benefit accrual rates to get it to pass? and not have to meet any minimum gateway requirements?

Yes. Assuming the plan covers a reasonable classification under 1.410(b)-4(b) and also meets the safe harbor percentage under 1.410(b)-4(c)(2), the average benefits test prong of the coverage test can be done on a contributions-tested basis or on a benefits-tested basis. The gateway minimum only applies if, after passing coverage, you run the nondiscrimination test on a cross-tested basis (or a component is cross-tested). Meaning, the method used to pass coverage does not trigger a gateway minimum.

Is this is a standalone plan where the plan sponsor is not part of a controlled group, and there is not a large group of employees excluded by classification? If yes, it is unusual that deferrals would fail coverage, and slightly more likely that match also would fail coverage in which case you may want to take a closer look at the test.  If no, then the coverage testing starts to become orders of magnitude more complicated and you may want to engage a third party to help guide you.

Remember that for coverage with respect to deferrals and match, you consider the employees who are eligible to defer and get match as benefiting, even if they opt out or elect not to enroll.