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I have one employee and I got him workers compensation for about $230 a month now I find out they are charging me $650

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I have a LLC   and one employee. I got him workers compensation insurance for about $230 a month  from ADP. Now I find out they have increased it to $650  a month. ADP said there was a new law passed in 2017 that says all corporate officers must get insurance if they own 15% or less of LLC. That is why they are charging me $400 a month more. I own 50% of LLC, so this  is over the 15% thresh .hold. Will ADP give me refund? What can I do? The LLC is in California.

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rated:
axdse said:   ADP said there was a new law passed in 2017 that says all corporate officers must get insurance if they own 15% or less of LLC.
or more?
  

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according to :
http://alliantinsurance.com/Industry-Solutions/Construction/Docu... bill passed on August 26, 2016 changes the current California law stating that officers and members of a Board of Directors of a private company, or managing partners or general partners of a LLC, can elect to NOT be covered by Workers’ Compensation (WC) policy.The newly enacted CA AB 2883 states that an officer or member of the Board of Directors must own at least 15% of the stock of the corporation in order to opt out of WC coverage, as well as sign a waiver stating that the individual is a qualifying officer or member. The Assembly Bill also requires a general partner of a partnership or a managing member of a LLC to execute a waiver to OPT OUT of WC coverage.


Why not just opt out of wc coverage??

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Can ADP just start charging you more without requesting from you whether you desire to be covered? In other words, is it possible for ADP to cover additional employees without informing you they will be covered? I guess another way to look at it - is it possible for some of your employees to be covered under a workers compensation policy with ADP while others are covered by some other provider?

Possibly a more important question, with one employee, why are you using ADP?

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Look into opting out, most people I know in CA do that. 

Or:

Can you talk to your ADP rep about switching to ADP PEO? I've never heard it be done with so few employees, but you basically would pay 9% of payroll and be co-employed under ADP's Work Comp. Something to at least consider and discuss with your rep.

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A PEO might be the better option for multiple reasons.

Trying to get insurance or other benefits for a company of less than 10 people can be expensive because the low volume / low $ amounts. You'll often run into "minimum premium" issues.

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The law changed in CA and required you to opt out as an officer instead of opt in. Agents used to just list all officers as excluded on the coverage application, but now the carrier has to have the signed waiver on file.

I'd be surprised if your carrier didn't send you a letter giving you a chance to opt out. Our office writes comp and represents 5 or 6 carriers and they all sent out multiple letters. This was on all their radars for months because they didn't want to seal with his kind of thing.

Ask your contact at ADP if the carrier will allow you to opt out and backdate the endorsement to the date of the law change or at least the start of the current policy. They may require you to sign a letter indicating you haven't had a loss/won't file a claim.

ADP is not your carrier, they are probably your agent as that is how they are primarily functioning in the comp market at this point. They also know nothing about insurance. If they are actually your agent they should have e&o insurance you may be able to file a claim against if they can't fix this. Also you should get a better agent that will inform you when things like this happen, they can hook you up with a payroll processor to go with your comp if need be.

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Ditch ADP, the only thing that payroll company is good for is trying to market other products. They don't fix errors and are terrible to work with.

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You are allowed to opt out. ADP should've provided you with the option to opt out. You need to fill out a form for this to happen. They should be able to have you fill out the form and reprice the policy. A bit of a separate topic, but be ready for an audit at the end of your policy. If you pay independent contractors with 1099s, keep good records that they are indeed independent and have their own insurance. Otherwise the audit could come back with an adjustment asking you to pay an additional premium based on the amount you paid to them. Apparently, you have to be very specific when you get the policy that people that work for you as independent contractors are not to be covered by the WC policy.

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