This little beauty seems to have passed almost unnoticed by the WC industry.  To be truthful, it seems that most businesses may not be readily affected by it.  But to those that are – the changes can be significant.  The question is: What does California AB 2883 mean to your worker’s compensation insurance?

CA AB 2883 was signed into law this past August by Gov. Brown and is slated to take effect January 1, 2017 – FOR ALL WORKERS COMPENSATION POLICIES! It might not mean much, but to some of you it may mean a significant increase in your current policy’s WC premium or a significant decrease if you are now able to exclude coverage previously denied exclusion.

CA AB 2883 modifies exclusion requirements. In a nutshell, the changes are:

  • Corporations … exclusions are available for any officer/director that owns 15% or more of outstanding shares … sorry owners of only 14% of stock or less, you are now REQUIRED to be covered by Workers Comp.
  • Corporations … directors/officers are no longer required to own 100% of the stock to qualify for director/officer exclusions … meaning if a portion of your stock is owned by a non-director or non-officer, you are no longer disqualified from exclusion
  • LLCs … Managing members can exclude themselves from coverage
  • Partnerships … General Partners can exclude themselves from coverage

So, what does this really mean? Basically, current policies can exclude any officer/shareholder of a corporation as long as the officers/directors owned all of the stock… even if the individual owner only owned 1% of outstanding stock. This has sometimes been used as a way of giving an ownership benefit to vital employees and as well as a cost savings benefit to the company by releasing them from the obligation of paying worker’s compensation premium for specific employees.


  • All qualifying individuals wishing to exclude themselves from coverage will need to complete an exclusion form
  • In researching with individual carriers – each seems to be implementing with their own forms and process to be completed by the end of the year. Call me for specific information