Clarification on EBAR testing: I read somewhere that if the EBAR for any HCE is greater than the highest NHCE EBAR, the test will not be passed.

Is this a correct statement? If so, why?

True because the ratio/percentage of each "rate group" must at least equal the "midpoint" (from a table in the 410(B) regulations) between a "safe harbor" and "unsafe harbor" percentages, again as defined in the regs.

Each rate group consists of an HCE and all NHCEs with equal or higher EBARS (or allocation rates if the plan is not cross tested). If you have no NHCES with an EBAR higher than an HCE, you have a 0% rate group, so you can't possibly equal or exceed the midpoint. Therefore you must fail.

Thank you very much for the clarification. Your answer is exactly what I was thinking the reasoning would be, but just wanted another opinion.