Beginning January 1, 2017, California state law is redefining eligibility for exclusion from coverage of workers’ compensation for officers and directors. The new law addresses officers and directors of quasi-public and private corporations who provide actual services to the corporation for pay and are considered an “employee” of the corporation under their Workers’ Compensation policy unless they elect to be excluded from coverage.
Assembly Bill 2883 (AB2883) changes current law as to which individuals are eligible to be excluded from workers’ compensation coverage and the process for excluding eligible individuals should they elect to be excluded.
- An officer or member of a board of directors who individually owns 15% or more of the issued and outstanding stock of the corporation.
- A managing member of a limited liability company.
- A general partner of a partnership.
- Each individual who requests exclusion from coverage must sign the new AB 2883 compliant waiver form, even if the individual has previously signed a waiver and has been excluded from coverage prior to 1/1/2017.
- By executing the AB 2883 waiver form, the signing individual certifies under penalty of perjury that he or she qualifies for exclusion. Agents and company representatives may not sign on behalf of the individual requesting exclusion.
- If the policy contains multiple Named Insureds, that individual must submit a waiver form for each Named Insured for which he or she is requesting to be excluded. Therefore, multiple forms may be required.
- The exclusion will be endorsed to the policy upon the insurer’s receipt and acceptance of a signed and properly completed AB 2883 compliant form. No retroactive exclusions are permitted.
- Immediately review existing scheduled excluded individuals for all in-force policies and determine their eligibility based on the new parameters.
- Have all existing and eligible individuals who wish to be excluded as of 1/1/17 complete a waiver form for each Named Insured. Generic Waiver Form-AB 2883
- Clearly identify the current in-force policy number on all waiver forms.
- Ensure all properly completed AB 2883 compliant forms are received by your insurer no later than 12/31/16.
If you currently have an in-force workers’ compensation policy and you require an exemption, the AB2883 compliant waiver form must be submitted to your workers’ compensation insurance company by December 31, 2016.
If you need further information on how to submit information on an in-force WC policy, contact your broker.
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