Read to See if This Impacts You
Effective July 1, 2018, the California Legislature, under Senate Bill 189, will broaden the criteria for owners in some entity types to be eligible for exclusion on new and renewal policies.
Currently, under AB 2883, an individual officer/director must own at least 15 percent of a corporation’s stock, be a general partner in a partnership, or be a managing member of a Limited Liability Company (LLC) in order to be eligible for exclusion from a workers’ compensation insurance policy.
Under the new SB 189:
Partnerships and LLC – The general partners’ or managing members’ ownership interest may now be held in a revocable trust.
Corporations – The ownership threshold for waiving workers’ compensation coverage was amended from 15 percent to 10 percent and shares may now be held in a revocable trust.
In addition, this bill includes specific waiving provisions for professional corporations, cooperative corporations, and closely held family businesses.
What You Need to Do
No action is required where policyholders have already returned all applicable waiver of coverage forms under existing law and there are no changes in the structure.
Action is required when owners who are now eligible under SB 189 would like to elect exclusion on their policy incepting July 1, 2018, and forward. Your workers’ compensation insurance carrier will be sending you the required waiver form. In order to be excluded from the policy, you are required to complete the form with the insured name and policy number completed. The person to be excluded must sign and return it to the insurance company.
Be sure to keep a copy of the completed form for your records. State law does not allow the insurance company to backdate the waiver form.
CAP Physicians Insurance Agency is happy to send you a copy of the waiver form. Simply call 800-819-0061 or email CAPAgency@CAPphysicians.com.