when employers fail the adp acp tests they can remedy the failure by refunding excess contributions back to hces in the amount necessary to pass the test however these refunds will be liable for income tax for the hce individuals 
some companies set buffer zones within their plan documents to steer plans away from potentially failing the adp acp test in the first place one option is setting a cap on contributions by hces another option is to place a contribution limit on hces at the point where the plan would fail an adp acp test setting plan buffer zones may require employers to conduct adp acp test projections typically in the middle of the plan year to determine if any restrictions need to be applied still some companies use a safe harbor 401 k plan to avoid the adp acp test entirely 