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California Workers Compensation – SB 189 and AB 2883 – Officers/Partners Exclusion Update

Officers/Partners Exclusion Update – California Workers Compensation Legislative Changes

In 2017, there were many legislative changes concerning California Officer and Director exclusions. New changes from SB 189 will be taking effect on and after July 1, 2018. Please confirm with your insurance agent or broker that you are in compliance with these new requirements. If you have questions about your workers compensation coverage, please reach out to us at Navion.

SB 189 Changes For Policies Effective On and After July 1, 2018:

  • Stock ownership requirements for corporate officers have been lowered to 10%, with an additional requirement that they must be covered by a health insurance policy. If you were previously ineligible before at 15%, but are now eligible at 10%, be sure to submit a waiver.
  • Certain corporate officers may be eligible for exclusion, if they own at least 1% of the stock and if their parent, grandparent, sibling, spouse or child owns at least 10% of issued and outstanding stock.
  • Individuals holding power to revoke a trust of a private corporation/partnership/LLC are eligible for exclusion.
  • Owners of professional corporations rendering professional services are eligible for exclusion.
  • Sole shareholders of corporations are automatically excluded – no waiver necessary – but may be included at the insurer’s discretion.

Signed state-mandated waivers are required to opt out of coverage.

For more details, please see the California legislature’s site for full text of SB 189.

Please contact Navion for any questions or concerns you have regarding your workers compensation coverage.