Important Worker’s Compensation News
Updated: October 25, 2017
AB 2883 affected all new, renewal and inforce Workers’ Compensation policies related to the exclusion of officers, directors, partners and members effective January 1, 2017. Recently, the governor signed SB 189 clarifying some of the provisions of this new law.
As a reminder, with AB 2883, any eligible individual (officer, director, general partner, and managing member) electing exclusion from workers’ compensation benefits must provide a signed waiver to the insurance company. SB 189 permits insurers to backdate – to January 1, 2017 – any waivers received on or before December 31, 2017.
This change means that any policyholders who are eligible for exclusion under the current law, but who did not submit waivers, have another opportunity to do so and have their waivers backdated. This change also means that insurance companies can backdate any waivers received after the original December 31, 2016 deadline.
While it is not mandatory for an insurance company to accept backdated waivers under SB 189, we anticipate that most carriers will do so. Eligible policyholders will receive more information directly from their insurance carriers.
Please do not hesitate to contact Basi Insurance Services with any questions or concerns. We are eager to work with you in meeting the requirements of these evolving laws.
AB 2883 Important Reminders
· Individuals/Sole Proprietors and spouse and family members were not affected by this law.
· Eligible for exclusions are:
o Corporations, officers and directors (i.e., members of the Board of Directors) who now meet a 15% ownership threshold.
o In partnerships, General Partners only.
o In LLCs, Managing Members only.
· Grantors or revocable trusts are no longer deemed shareholders and do not qualify for exclusion.
· The requirement that 100% of the stock must be held by titled Officers/Directors in order for them to be eligible for exclusion has been eliminated.