Packlite company has a defined benefit plan with 100 nonexcludable employees (25 HC and 75 NHC). They are unsure if they are meeting all of their testing requirements. What is the minimum number of total employees that must be covered on a daily basis to conform with the requirements set forth in the IRC?

1. 40.
2. 50.
3. 80.
4. 100.

This is the 50/40 test. I think is answer 2. but Not sure about the "40" eligible employees