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Information for Employers

Important Information for Policyholders About AB 2883

AB 2883, was signed into law by the Governor in August  2016.  AB 2883 changes the definition of “employee” in Labor Code Section 3351 and the changes the eligibility criteria in Labor Codes 3352 for officers of corporations, general partners of partnerships and managing members of limited liability companies to elect exclusion from workers’ compensation coverage. This significant change takes effect January 1, 2017 and affects the insurance coverage and premiums on many current and future workers’ compensation policies.

AB 2883 requires action by impacted policyholders as soon as possible in order to ensure compliance  by January 1, 2017 with the changes in the Labor Code.

Summary of AB 2883 and What the Law Means to Employers
Beginning in January, all workers’ compensation insurance policies will be required to cover certain Officers and Directors of private or quasi-public Corporations, and working members of Partnerships and Limited Liability Companies that may have been previously excluded from coverage.

Under AB 2883, the following changes take place on January 1, 2017, regardless of the inception date of your workers’ compensation policy.

AB 2883 – with regard to Corporations:

  • Only Corporate Officers or members of Board of Directors who own 15% or moreof the issued and outstanding stock of a corporation can be excluded from coverage.
  • Each Corporate Officer and Director who owns 15% or more of the corporation’s stock and wishes to be excluded from coverage must complete and sign a new Waiver Form attesting to his/her eligibility to be excluded, under penalty of perjury.

AB 2883 – with regard to Partnerships and Limited Liability Companies (LLCs):

  • In order for a General Partner of a partnership or a Managing Member of a LLC to be excluded from coverage, each General Partner and each Managing Member must sign a new Waiver Form attesting to his/her eligibility to be excluded, under penalty of perjury
What action is State Fund taking to help policyholders bring their policy into compliance with AB 2883?
During the week of November 7, 2016, we sent notices to policyholders who have Corporate Officer/ Director or General Partner or Managing Member exclusions on their current policies. These policyholders need to review the package and complete all requested information, including the waiver forms.

Below are samples of the Policyholder Notices that we mailed:
Policyholder Notice/Package - CORPORATIONS
Policyholder Notice/Package - PARTNERSHIPS
Policyholder Notice/Package - LLCs
Policyholder Notice/Package - MULTIPLE ENTITIES

To ensure we are able to process changes correctly, we ask that policyholders send responses back to State Fund as a single package using one of the following options:

  1. Scan and email waiver forms to their assigned underwriter OR to
  2. Scan and fax waiver forms to Policy Services at (800)268-3635.

For further assistance please contact our Customer Service Center at 1-888-782-8338.

Please note:
The notices we sent policyholders contained information specific to their individual policies, as well as an AB 2883 Compliance Guide, which provides a comprehensive explanation of all responses we may need from them. Please review the Policyholder Notices.

Below are some of the individual components of the Policyholder Notices (blank Waiver Forms and Coverage Questionnaire):
Waiver Form e10280 - CORPORATE OFFICERS AND DIRECTORS - AB 2883 Compliant
Waiver Form e10281 - GENERAL PARTNERS - AB 2883 Compliant
Waiver Form e10282 - LLC MANAGING MEMBERS - AB 2883 Compliant
Coverage Questionnaire for Included Officers - e10283

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