A good workers compensation question that I was recently asked…
The rules of inclusion or exclusion from workers compensation coverage for owners and others, whether corporate officers, LLC members, partners or sole proprietors are state specific and frankly a bit of a mess! It’s hard enough to find the state specific rules regarding inclusion/exclusion let alone the specifics and timing of the effective date for such an action.
You first should determine whether or not corporate officers, LLC members, partners and sole proprietors are included automatically or excluded from coverage. To determine this you can go directly to the state authority in question and sift through their website or make contact with them but this can be frustrating and very time consuming. You can go to the insurance company or agent providing workers compensation coverage or for another source you can go to our website where we’ve compiled a simple, single resource for your use.
Here’s a few examples.
- Lets say you want to exclude a corporate officer from a Georgia workers compensation policy. You need to go to the Georgia state laws and rules page and the first thing you have to do is determine whether or not they are automatically included or excluded. Once you determine they are automatically included but have the option of being excluded you will need to uncover the process set by the state in properly excluding the corporate officer. In Georgia, a form is completed and submitted but is not effective until it is received by the insurance carrier.
- Same situation but in Virginia. The form is completed, submitted to the state and the effective date is the date the Commonwealth of Virginia advises in the letter or notification they send to the insurance carrier.
- Same situation but in Alabama. A form is filed. The rules governing the effective date are lined out within Alabama state statutes…not easy to find…but states; “The certification for exemption or reinstatement of coverage shall become effective on the first day of the calendar month following the filing of the certification of exemption or reinstatement of coverage with the department.”
Some states provide the effective date information of inclusion or exclusion on the form that must be completed and filed. Some require the forms to be filed with their state department while others only require some type of form to filed with the insurance carrier.
So like I said…it’s a mess!
Make sure that you contact your state workers compensation authority, insurance company, agent or check with another source if you have any questions about the inclusion or exclusion of owners from coverage!
Hope this helps you out! Thanks!