Bill would allow comp opt-out for individual contactors, corporate officers

A bill under consideration in the Nebraska Legislature would allow individual contractors, company officers and others to choose not to purchase workers compensation coverage for themselves.

Legislative Bill 553, introduced in January by Sen. John Lowe, R-Kearney, would allow individual employers, partners, limited liability company members and self-employed workers to opt out of comp coverage specified in the state’s Workers’ Compensation Act. The unicameral legislature’s Business and Labor Committee heard testimony about the bill Monday.

Employers, including individual independent contractors, who elect not to insure themselves would be required to provide written notice to the Nebraska Workers’ Compensation Court acknowledging that they are electing not to be covered and that they would not be entitled to any benefits under a comp policy. Individuals would be allowed to re-elect coverage under the act at any time by submitting a request to the court to remove their non-election coverage or by purchasing a workers comp insurance policy, the bill says.

Non-election of coverage would not waive any rights or remedies available to an individual in a civil action stemming from on-the-job injuries, the bill says.

The bill is designed to bring clarity to the comp insurance market and create “a more certain legal status” for individual employers and independent contractors with regard to comp benefits, a statement of intent written by Sen. Lowe said.