This new law applies to those California small and mid-size private employers who have elected to exclude officers from workers’ compensation benefits.
The new law, AB 2883, makes the following changes:
1 – Any eligible individual (officer, director, general partner, managing member) electing exclusion from workers’ compensation benefits must provide a signed waiver to the insurance carrier prior to January 1, 2017
2 – For corporations, officers and directors (i.e., members of the Board of Directors) must now also meet a 15% ownership threshold in order to be eligible for exclusion
3 – For partnerships, only general partners are eligible for exclusion
4 – For LLCs, only managing members are eligible for exclusion
This legislation effects all new, renewal and in force polices where the officers, directors, partners and members are excluded.
NOTE AGAIN: All current policies with this exclusion must be verified in writing prior to January 1, 2017 by those excluded individuals.
You should expect notification about this important change from your current workers’ compensation insurance company or your insurance broker.
Should you not receive the notification to continue this exclusion, you should contact them if you wish to maintain this provision. Taking this step will save you time and unexpected additional premiums.
As the legislation now stands, should you not provide the necessary written confirmation in time to continue this exclusion, the compensation for those “excluded” individual’s will be charged at your annual policy premium audit.
You may access the Bill Analysis HERE
As you can imagine, many employers are unhappy about this new law. It creates another California compliance task for them and in some cases creates additional costs.
Contact me for a no obligation chat with your questions about this legislation, as well as, any risk management or insurance related matters:
Tom Bone: email: firstname.lastname@example.org; phone 916-960-8758