diff --git a/archon-ui-main/src/utils/onboarding.ts b/archon-ui-main/src/utils/onboarding.ts
index 743566f2b5..93f082cc0b 100644
--- a/archon-ui-main/src/utils/onboarding.ts
+++ b/archon-ui-main/src/utils/onboarding.ts
@@ -41,10 +41,11 @@ export function isLmConfigured(
   // Helper function to check if a credential has a valid value
   const hasValidCredential = (cred: NormalizedCredential | undefined): boolean => {
     if (!cred) return false;
-    return !!(
-      (cred.value && cred.value !== 'null' && cred.value !== null && cred.value.trim() !== '') || 
-      (cred.is_encrypted && cred.encrypted_value && cred.encrypted_value !== 'null' && cred.encrypted_value !== null)
-    );
+    // If is_encrypted is true, we consider it valid even without a value,
+    // as the value is stored on the server.
+    if (cred.is_encrypted) return true;
+
+    return !!(cred.value && cred.value !== 'null' && cred.value !== null && cred.value.trim() !== '');
   };
 
   // Find API keys
diff --git a/archon-ui-main/test/errors.test.tsx b/archon-ui-main/test/errors.test.tsx
index 7ec739eff2..9b0b680329 100644
--- a/archon-ui-main/test/errors.test.tsx
+++ b/archon-ui-main/test/errors.test.tsx
@@ -35,7 +35,8 @@ describe('Error Handling Tests', () => {
     expect(screen.getByRole('alert')).toHaveTextContent('Failed to load data')
   })
 
-  test('timeout error simulation', () => {
+  test('timeout error simulation', async () => {
+    vi.useFakeTimers()
     const MockTimeoutComponent = () => {
       const [status, setStatus] = React.useState('idle')
       
@@ -60,10 +61,14 @@ describe('Error Handling Tests', () => {
     fireEvent.click(screen.getByText('Start Request'))
     expect(screen.getByText('Loading...')).toBeInTheDocument()
     
-    // Wait for timeout
-    setTimeout(() => {
-      expect(screen.getByRole('alert')).toHaveTextContent('Request timed out')
-    }, 150)
+    // Fast-forward time
+    await act(async () => {
+      await vi.advanceTimersByTimeAsync(150)
+    })
+
+    const alert = await screen.findByRole('alert')
+    expect(alert).toHaveTextContent('Request timed out')
+    vi.useRealTimers()
   })
 
   test('form validation errors', () => {