The State of New Hampshire enacted legislation January 4, 2008 altering last year's HB471 that eliminated the corporate executive officer and LLC member exclusion for many contractors performing work in the State of New Hampshire.
As of January 4th HB 692 removes certain provisions of HB 471, which was passed on September 14, 2007 and provided that no executive officer of a corporation or member of a limited liability company may be excluded from workers' compensation coverage, regardless of title, if such officer or member is actively engaged in on-site work on any construction site in New Hampshire.
Overall, the new legislation has done three things:
1. Amends NH RSA 281-A:18-a to once again allow the exclusion from workers'compensation coverage of up to three officers or members of corporations or limited liability companies.
2. Amends NH RSA 228:4-b to exclude persons performing routine maintenance operations conducted utilizing the contract rental agreement process on certain state transportation projects from the requirement of providing certification of current workers' compensation coverage.
3. Allows insureds who purchased workers' compensation insurance coverage to comply with the requirements of RSA 281-A:18-a, as amended by 2007, 323:1, to cancel or remove this workers' compensation coverage. As stated above, in addition to removing wording that eliminated the executive officer exclusion, language also changed regarding workers compensation requirements with state contracts. Work being performed on any state transportation project carried out under this subdivision must still meet all criteria under RSA 228:4-b, "...excluding routine maintenance operations conducted utilizing the contract rental agreement process...".
Finally, minimum policy cancellation procedures have been established for those who purchased coverage because of this law and no longer wish to continue that coverage. Insurers returning premium pursuant to the cancellation or removal of coverage under paragraph I shall calculate the return premium amount using, at a minimum, a pro-rata methodology. As a condition of cancellation or removal of coverage, the insurer may require the insured to provide a "loss-free" letter, which indicates:
(a) The names of any person or persons being excluded from coverage.
(b) The date coverage is to cease.
(c) An attestation that any person or persons to be excluded are not aware of any injuries or other claims that have occurred during the term of coverage and which have not yet been reported to the insurer.
Individual insurance carriers may have different cancellation options. If you decide to change or cancel your coverage you should contact your Clark-Mortenson representative to discuss those options. As stated above, this update is in no way intended to construe that Clark-Mortenson is recommending any business cancel their workers' compensation coverage. Any business deciding to do so should consult with their attorney to discuss the implications of cancelling coverage or excluding executive officers.
For more information on these items or to see if any interpretations have changed, please contact the New Hampshire Department of Labor at http://www.labor.state.nh.us or via phone 800.272.4353. For assistance with the insurance requirements, please contact your Clark-Mortenson representative.
