Employers: Changes to California Coverage Exclusions for New and Renewal Policies Effective July 1, 2018 or Later

Your clients may be impacted by recent changes to California law (SB189) regarding eligibility to waive workers' compensation coverage.

These changes apply to every new and renewal CA policy incepting July 1, 2018 or later.

• A new SB189 compliant waiver form (view form) will be implemented that replaces the previous AB2883 form. The new SB189 waiver form will be attached to quotes and will be available in the EACCESS® Portal. The AB2883 form will no longer be accepted by EMPLOYERS.
• EMPLOYERS will backdate SB189 compliant waivers up to a maximum of 15 days from the date of our receipt and acceptance.
• The four new WCIRB limiting and restricting policy endorsements (edition date 7-18) will be utilized.
• EMPLOYERS will automatically carry forward the exclusion endorsements of existing AB2883 individual waivers for general partners, managing-members and private or quasi-public corporation officers and board members as long as those individuals continue to qualify for exclusion under SB189.
• You'll be able to submit SB189 waivers for those employees/individuals newly able to waive coverage due to expanded SB189 eligibility (view SB189 waiver form for full details). New eligibility includes:
  • A Private or Quasi-Public Corporation's officer or board member with less than 15%, but at least 10% ownership; an officer or board member who has less than 10%, but at least 1% ownership and is covered by a health plan and is related to a qualified relative who owns at least 10%; and an officer or board member who has no direct ownership, but is the Trustee of qualifying trust
  • An LLC's Manager and Trustee of a revocable trust that is an owner (Member)
  • An individual who is the Trustee of a revocable trust that is the General Partner of a Partnership
  • A Cooperative Corporation's officer or board member covered by health and disability plans

 You are strongly encourage to make sure each policy holder is aware of these new elective options as their renewal approaches.

Additional Changes Requiring Your Immediate Attention:

Under AB2883 employees of a CA Professional Corporation (P.C.) were included under the eligibility rules for Private or Quasi-Public Corporations. SB189 establishes new eligibility rules unique to P.C.s; see full details on the SB189 waiver form.

At renewal: 

• Any prior AB2883 waiver/exclusion of a P.C. employee becomes void by law.
• Each SB189 eligible P.C. employee will need to submit a new SB189 compliant waiver.
• SB189 CA Professional Corporation limiting and restricting policy endorsement WC 04 03 66 (Ed. 7-18) will be used to separately record these individuals. If a renewing Named Insured is not clearly identified as a Professional Corporation, then EMPLOYERS may unknowingly carry-over a prior AB2883 WC 04 03 03B waived/excluded P.C. employee onto the Private or Quasi Public Corporation endorsement WC 04 03 03C (Ed. 7-18) Such endorsement on the WC 04 03 03C cannot be construed as confirmed receipt and acceptance of the P.C. employee’s SB189 waiver. Unless endorsed using WC 04 03 66, P.C. employees will be treated as included and premium will be charged accordingly. 

Please review your July 1, 2018 and later renewals to identify any Named Insured incorporated as a P.C. and obtain the necessary executed SB189 waivers. 

For questions, please contact B&P's Workers' Compensation Specialist, ​Patrick Kim, at 925.296.5478.