Effective 8/7/13, individuals who own 10% or more of a non-construction LLC may now file to exempt themselves from workers compensation coverage. This means that their salaries can be entirely excluded when calculating the payroll on which WC rates are applied.
In the past, this was always a grey area of the law as most WC carriers made their own decisions on whether to allow this class of owners an exemption or not. Now that it is law, it is no longer up to the WC carriers – it is entirely up to the owners.
The logical question now becomes, to exempt or not? We would caution you to not automatically exclude yourself unless you have a sound financial plan in place that includes health insurance, disability insurance and life insurance. This is what WC insurance provides to an injured worker, and if you don’t have this in place, you could be exposing yourself to risk unnecessarily.
For additional information, please talk to your Lutgert Insurance agent.