Effective July 25th 2019, members of a Single Member LLC that currently carry workers compensation insurance will now be automatically included on their policies. This is a big change from how Connecticut used to treat workers compensation policies.
Daigle & Travers recommends that all single member LLCs that would like to carry workers compensation for their employees, but not themselves, to sign an exclusion form that we can file with the state on your behalf.
Connecticut–Notice Concerning Changes to Treatment of Single-Member Limited Liability Companies (LLCs) in Connecticut
Following the Connecticut Workers’ Compensation Commission’s Memorandum No. 2019-02 that addressed the change in the treatment of Single Member LLCs, on July 8, 2019, NCCI released Circular FYI-CT-2019-01. These communications detailed the results of the Supreme Court of Connecticut ruling in Gould v. City of Stamford, where a member of a single-member LLC is now automatically included unless it files Form 6B with the Connecticut Workers’ Compensation Commission to be excluded. Multimember and Single Member LLCs are now treated the same.
Subsequently, on July 25, 2019, the Connecticut Insurance Department (the “Department”) issued its “Notice to Workers’ Compensation Insurers and Producers Concerning Changes to Treatment of Single Member LLC’s” providing additional direction related to the treatment of premium and election/rejection of coverage for a member of a single-member LLC. The Department Notice is attached for your reference.
At the direction of the Department, insurers should notify their policyholders of the change in the law and allow 45 days from the date of that notice for the owner of the single-member LLC to execute a Form 6B in order to elect to be excluded from coverage.
NCCI is preparing an item filing to update its manual rules to conform to this change in the law and regulatory directives.