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H.B 183 - coverage requirement impacts As you may have heard House Bill 183 had some significant impacts for Ohio employers. Last month, you learned about the bill's impacts on the professional employer organization (PEO) community. As the bill became law on Nov. 5, we want to explain the other significant component, change in coverage requirements. First, there was a change made to the definition of employee, a change that will exempt an individual incorporated as a corporation from having to maintain workers' compensation coverage. However, this is ONLY if the individual who incorporated as a corporation is the sole owner and has no employees. If the corporation has employees, the individual incorporated as a corporation must continue to maintain the required coverage on himself/herself and all other employees.
HB 183 and definition of employee
Definition of an individual incorporated as a corporation All other personnel associated with other corporations - including corporate officers - are still considered employees of a corporation for workers’ compensation purposes. You must report payroll and pay premium on these personnel. So, coverage is optional but ONLY for these individuals who have incorporated as a corporation and who have no employees. Note:BWC’s general rule that officers of corporations are employees is not altered by the statutory change. Thus, if a husband and wife are co-owners of a business, both would be considered employees, and the exemption under ORC 4123.01(A)(2)(c) would not apply since there would not be a sole individual incorporated as a corporation and no employees. This scenario is two people incorporated as a corporation. Again, these statutory changes apply to only single-owner corporations with zero employees.
Optional supplemental coverage
Consequences for not timely submitting an application for supplemental coverage
Rule changes to support individual incorporated as a corporation In conclusion, if an employer is an individual incorporated as a corporation, as sole owner with zero employees, the employer does NOT have to establish or maintain an Ohio workers’ compensation policy. The “if” means that the individual must be sure this change in law applies to him or her as an employer. The exception would be if the employer would be required by another authority to show proof of workers’ compensation coverage (in which case having optional supplemental coverage would be sufficient) or at any time when coverage is required such as when the employer is no longer sole owner or hires an employee. |