The Nebraska Department of Insurance announced that the state’s legislature has made a significant change to workers’ compensation statutes regarding executive officers of a corporation who own 25 percent or more of that corporation’s common stock.
Under current workers’ compensation law, such individuals are required to be covered under workers’ compensation policies, although an executive officer with 25 percent or more of a corporation’s stock may choose to opt out. The change takes effect on Jan. 1, 2003.
Under the new law, LB 417 the affected persons will no longer be required to be covered under workers’ compensation policies. That is, they will not be “automatically” covered. After Jan. 1, 2003, these persons must make an affirmative choice to their insurer (not the Nebraska Workers’ Compensation Court) if they want to be covered under their workers’ compensation policy.
The department encourages insurers and insurance producers to make all reasonable efforts to contact affected persons to advise them of the change in the law before Dec. 31, 2002 so that they can decide whether or not they want to obtain coverage.
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