Louisiana does not issue a workers’ compensation exemption form. The Louisiana Workforce Commission has confirmed that “Louisiana issues no such exemption forms.”1Louisiana Works. Workers’ Compensation Coverage for Employers Eligible owners and officers opt out through a written agreement signed directly with their workers’ compensation insurer or group self-insurance fund, as authorized by Louisiana Revised Statute 23:1035.2Louisiana State Legislature. Louisiana Code RS 23:1035 – Employees Covered Nothing is filed with a state agency.
Who Qualifies to Opt Out
RS 23:1035 limits the election to four categories of people, and the ownership rules are strict.2Louisiana State Legislature. Louisiana Code RS 23:1035 – Employees Covered
- A bona fide president, vice president, secretary, or treasurer of a corporation who owns at least 10 percent of the stock.
- A member of a limited liability company who owns at least a 10 percent membership interest.
- A partner in a partnership that employs them. No minimum ownership percentage applies.
- The individual owner of a sole proprietorship.
A vice president holding 5 percent of the stock cannot elect out, no matter how much authority they exercise day to day. A chief operating officer or director who doesn’t also hold one of the four named titles doesn’t qualify either. If you aren’t in one of these four categories, there is no election to sign.
How to Get and Sign the Election
Ask your workers’ compensation insurer or your agent for their election document. Most carriers have their own version, often titled something like “Notice of Election/Revocation of Coverage.” The Louisiana Workforce Commission puts it plainly: “This exemption must be done in writing to the insurance company.”1Louisiana Works. Workers’ Compensation Coverage for Employers
Expect the form to ask for:
- The legal name of the business and its federal employer identification number.
- Your full name, Social Security number, and title within the business.
- Your ownership percentage.
- The effective date you want for the exemption.
- Your signature acknowledging that you are voluntarily giving up workers’ compensation benefits.
Each eligible person signs a separate form. One document cannot cover multiple officers or members. Once you sign, the insurer attaches a policy endorsement (commonly the NCCI Partners, Officers and Others Exclusion Endorsement) that removes you from the policy’s coverage and from its premium calculations. From that point on, none of your salary or compensation can be used to calculate the employer’s workers’ compensation premium.2Louisiana State Legislature. Louisiana Code RS 23:1035 – Employees Covered
Keep copies of both the signed election and the endorsement with your business records. At the next premium audit, the auditor will want to see them. Without that documentation, your payroll can be added back into the premium calculation.
Proving the Exemption to a General Contractor
If you work as a subcontractor, the general contractor will almost always want proof that you either carry workers’ compensation or have validly elected out. Without proof, your payroll can be pulled into their policy at their next audit, raising their premium. Because Louisiana issues no state certificate of exemption, the proof you can offer is a copy of the signed election form from your insurer along with a current certificate of insurance showing the exclusion endorsement.
The election applies to all trades and business activities conducted by your entity, not to a single job or line of work.2Louisiana State Legislature. Louisiana Code RS 23:1035 – Employees Covered General contractors are used to seeing these documents and may refuse to let you on a jobsite without them.
What You Give Up by Signing
Opting out means giving up every benefit under Louisiana’s workers’ compensation system. That includes wage replacement and medical coverage for any work-related injury or illness. The election binds not only you but also your surviving spouse, relatives, heirs, and dependents.2Louisiana State Legislature. Louisiana Code RS 23:1035 – Employees Covered If a job injury later causes your death, your family cannot claim workers’ compensation death benefits.
Personal health insurance may not fill the gap. Many health plans exclude injuries for which workers’ compensation benefits are available, and whether that exclusion applies to someone who voluntarily waived coverage depends on the plan’s language. Read your health policy for a workers’ compensation exclusion before you sign, and consider whether a private disability or occupational accident policy belongs in your coverage. Workers’ compensation pays medical bills without copays or deductibles and replaces part of your wages during recovery; private coverage can approach that, but rarely matches it dollar for dollar. The exposure is largest for owners who are around heavy equipment, construction sites, or other physically demanding work.
Revoking the Election
You can rejoin coverage by notifying your insurer in writing. Most carriers use the same election document, with a revocation section where you state that you are revoking a prior exemption and electing coverage under the Louisiana Workers’ Compensation Act effective on a specific date. Once the revocation takes effect, your salary goes back into the premium calculation and you are again entitled to full benefits for work-related injuries.
Revoke the election if your role or ownership changes. Selling your interest, leaving the company, or stepping down from a qualifying officer position all end your eligibility. Leaving a stale exemption on file after you no longer qualify creates uncertainty about your coverage status that can hurt you if you file a claim.
When No Policy Is Needed at All
Some Louisiana businesses with no employees are not required to carry workers’ compensation in the first place, and there is nothing for the owner to opt out of. The Louisiana Workforce Commission identifies three such situations:1Louisiana Works. Workers’ Compensation Coverage for Employers
- A sole owner (not a corporation) with no employees, leased employees, borrowed employees, volunteers, or subcontractors.
- A Louisiana partnership with no employees, leased workers, volunteers, or subcontractors.
- A corporation with one or two owners who hold all the stock and all corporate offices, with no employees, volunteers, or subcontractors. With two owners, each must hold at least 10 percent, and together they must hold 100 percent of the stock and all offices.
The individual exemption under RS 23:1035 only comes into play when the business does have employees and does carry a policy, and a qualifying owner or officer wants to be excluded from it. If you have even one employee on the payroll, your personal election does not relieve the business of its duty to insure that worker.1Louisiana Works. Workers’ Compensation Coverage for Employers