IMPORTANT NOTICE ABOUT YOUR
WORKERS’ COMPENSATION POLICY
On January 1, 2017, a new law goes into effect in California that redefines which employees are automatically included within the coverage of your workers' compensation policy and which employees are eligible to be excluded from the policy.
The California Department of Insurance (CDI) has advised that this law applies to all existing, new, and renewal policies. Because this change in the law affects existing policies and imposes additional restrictions on any employee who wishes to remain excluded from coverage as of January 1, 2017, those employees who are eligible for exclusion must take action now to reaffirm their eligibility to be excluded under the current policy and must provide the required documentation.
The following is an overview of what you will need to do if vou have employees who have excluded themselves under your current policy:
When this new law goes into effect on January 1, 2017, if the insured entity under the policy is a corporation, including an S-corporation, then all officers and directors working for pay are automatically included within your workers' compensation coverage by law.
Officers and directors who individually own at least 15% of the outstanding shares of the corporation may elect to be excluded from coverage by providing a signed Waiver of Work Comp Coverage to the insurer, certifying that he or she qualifies for the exclusion. The waiver must be signed under penalty of perjury, and must include the employee's full name and title.
Officers must indicate the office held, and directors must use the designation "Director". Any officer or director who owns less than 15% of the outstanding shares of the corporation is not eligible for exclusion.
If the insured entity under the policy is a partnership or a limited liability company (LLC), all partners of the partnership and all members of the LLC working for pay are automatically included within your workers' compensation coverage by law.
Partnerships include all types of partnerships, including limited partnerships. General partners and managing members may elect to be excluded from coverage by providing a signed General Partners and LLC Managing Members Waiver of Workers' Compensation Coverage to the insurer, certifying that he or she qualifies for the exclusion. The waiver must be signed under penalty of perjury, and must include the employee's full name and title - only "General Partner" or "Managing Member" is acceptable.
IF YOU HAVEN’T BEEN CONTACTED BY YOUR WORK COMP INSURANCE CARRIER YET, BE SURE TO CONTACT THEM IMMEDIATELY TO CONFIRM WHAT REQUIREMENTS IN WHICH YOU MAY BE SUBJECT.
The California Department of Insurance (CDI) has advised that this law applies to all existing, new, and renewal policies. Because this change in the law affects existing policies and imposes additional restrictions on any employee who wishes to remain excluded from coverage as of January 1, 2017, those employees who are eligible for exclusion must take action now to reaffirm their eligibility to be excluded under the current policy and must provide the required documentation.
The following is an overview of what you will need to do if vou have employees who have excluded themselves under your current policy:
- The employee must re-evaluate whether he or she remains eligible for exclusion under this new law.
- If the employee remains eligible and wishes to remain excluded under your current policy, the employee must complete an appropriate Corporate Officers/Directors Waiver of Workers' Compensation Coverage form [Officers/Directors or General Partner/Managing Member] and return it to their carrier before December 31, 2016.
- If these are note received by December 31, 2016 for each employee who is currently excluded, the employee(s) will likely be added to your policy and premium will be charged from January 1, 2017 until the policy term expires or we receive the signed waiver.
When this new law goes into effect on January 1, 2017, if the insured entity under the policy is a corporation, including an S-corporation, then all officers and directors working for pay are automatically included within your workers' compensation coverage by law.
Officers and directors who individually own at least 15% of the outstanding shares of the corporation may elect to be excluded from coverage by providing a signed Waiver of Work Comp Coverage to the insurer, certifying that he or she qualifies for the exclusion. The waiver must be signed under penalty of perjury, and must include the employee's full name and title.
Officers must indicate the office held, and directors must use the designation "Director". Any officer or director who owns less than 15% of the outstanding shares of the corporation is not eligible for exclusion.
If the insured entity under the policy is a partnership or a limited liability company (LLC), all partners of the partnership and all members of the LLC working for pay are automatically included within your workers' compensation coverage by law.
Partnerships include all types of partnerships, including limited partnerships. General partners and managing members may elect to be excluded from coverage by providing a signed General Partners and LLC Managing Members Waiver of Workers' Compensation Coverage to the insurer, certifying that he or she qualifies for the exclusion. The waiver must be signed under penalty of perjury, and must include the employee's full name and title - only "General Partner" or "Managing Member" is acceptable.
IF YOU HAVEN’T BEEN CONTACTED BY YOUR WORK COMP INSURANCE CARRIER YET, BE SURE TO CONTACT THEM IMMEDIATELY TO CONFIRM WHAT REQUIREMENTS IN WHICH YOU MAY BE SUBJECT.