Ritman Insurance Insights

Ritman Insurance Insights

Differences in Worker's Compensation

Posted 8:50 PM by

How does Worker's Compensation Coverage differ between Corporations, Partnerships, LLCs, LLPs, Sole Proprietorships and Professional Corporations?

Partnership / LLP

  • Indiana Worker's Compensation InsuranceEquity Partners are not automatically included.
  • Equity Partners may elect to be included.
  • If the Equity Partners choose to remain excluded from coverage, respond in the following manner on your audit: provide compensation figures for Partners but note "Partners - Not Applicable" on the audit form.
  • When the Equity Partners have elected to be included:
    • Apply the 2014 maximum payroll cap of $166,400 for those Equity Partners whose compensation is above the cap amount.
    • For those Equity Partners whose compensation falls below the cap amount, report their actual compensation.
    • Apply the 2014 minimum payroll cap of $36,400 for those Equity Partners whose compensation is below $36,400.
    • Any Partner who elects coverage must file the "Notice for Worker's Compensation and Occupational Diseases Coverage (79)" State Form 36097 (R2/1-88) with the insurance carrier and the Worker's Compensation Board of Indiana.
  • When reporting the compensation of Non-Equity Partners, Associates and Staff, report their actual compensation.

Limited Liability Company (LLC)

  • LLC Members are not automatically included.
    • When a Member chooses to remain excluded from coverage, respond in the following manner on your audit: "Member (Name) - Not Applicable".
  • A Member may elect to be included if the Member is actively engaged in the business.
  • If a Member elects to be included:
    • Apply the 2014 maximum payroll cap of $166,400 for those Members whose compensation is above the cap amount.
    • For those Members whose compensation falls below the cap amount, report their actual compensation.
    • Apply the 2014 minimum cap of $36,400 if a Member's compensation is below $36,400.
    • Any Member who elects coverage must file the "Notice for Worker's Compensation and Occupational Diseases Coverage (79)" State Form 36097 (R2/1-88) with the insurance carrier and the Worker's Compensation Board of Indiana.

Corporations / P.C.

  • Executive Officers must be included.
  • Executive Officers must be actively engaged in the corporation's business.
  • The definition of Executive Officer is any officer appointed in accordance with the charter or bylaws of such entity. For example, if your charter/by-laws define your Executive Officers as "President, Vice President, Treasurer and Secretary", those Officers must be included.
    • Apply the 2014 maximum payroll cap of $166,400 for those Executive Officers whose compensation is above the cap amount.
    • For those Executive Officers whose compensation falls below the cap amount, report their actual compensation.
    • Apply the 2014 minimum payroll cap of $36,400 if the Executive Officer's compensation is below $36,400.
  • Anyone who is not an Executive Officer is deemed to be an employee of the corporation and you would report their actual earnings.

Sole Corporate Officer

  • A Sole Corporate Officer is automatically included.
    • Apply the 2014 maximum payroll cap if the Sole Corporate Officer's compensation is above $166,400.
    • If the Sole Corporate Officer's compensation is below $166,400, report actual compensation.
    • Apply the 2014 minimum payroll cap of $36,400 if the Sole Corporate Officer's compensation is below $36,400.
  • A Sole Corporate Officer may elect not to be included.
    • If electing not to be included, report on the audit "Sole Corporate Officer - Not Applicable".
    • If electing not to be included, the Sole Corporate Officer must serve written notice of the election on the corporation's insurance carrier and the Indiana Worker's Compensation Board using State Form 36097 (R2/1-88) "Notice for Worker's Compensation and Occupational Diseases Coverage (79)".
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