Can a plan exclude some, but not all, collectively bargained (union) employees? If so, can the plan exclude all union employees not covered by the plan for 410(B) coverage purposes, and include all union employees participating in the plan? What other issues should be considered due to the plan including some, but not all, union employees?

Generally you test the non-bargainined employees separately from the union employees. So, the plan could exclude union employees, and not have this affect the 410(B) minimum coverage testing for the non-bargainined employes.

Under a special rule, if all participants, both union and non-union employees, are covered by identical plan provisions including ancillaries, etc., then the average benefits percentage test can be considered satisfied if the plan passes the ratio test taking into account the union employees.

For bargainined employees, other ERISA provisions apply, such as the minimum participation requirement can not exceed age 21 and one year of service. So, for example, the plan could not be set up to cover union employeees after 5 years of service.