Several insurance companies are moving away from accepting Iowa Workforce Development form 14-0061 to exclude sole-proprietors and LLCs without employees from workers compensation audits. Iowa House File 259, passed in April 2015, mandated a new reporting website for sole-proprietors and LLCs without employees to file their workers compensation exemption. That website is now fully operational. Insurance companies are beginning to rely on the database on the Iowa Workforce Development website of excluded sole-proprietors and LLCs to determine if the sub-contractor is properly excluded or if coverage was provided by your workers compensation policy, warranting an extra premium charge.

If your business sub-contracts sole-proprietors or LLCs without employees, we recommend that you require the sub-contractor to fill out an exemption on the Iowa Workforce Development website. If the sub-contractor fails to complete this, you may be charged an additional premium at the time of your workers compensation audit for uninsured sub-contractors. The sub-contractor only needs to complete the exemption once, It will remain in effect with Iowa Workforce Development until the sub-contractor specifically asks for the exemption filing to be removed. The link for the sub-contractor to complete the form is below.

https://www.iowaworkcomp.gov/nonelection-workers-compensation-or-employers-liability-coverage

If the sub-contractor has their own workers compensation insurance policy, they do not need to fill out the exemption. You should request proof of the sub-contractor’s workers compensation policy, as well as their general liability insurance policy, annually before they do any work for you.

To check that a sub-contractor has properly filed an exclusion on the Iowa Workforce Development website click the link below and search for the sub-contractor. Select “View” next to the record and confirm that the information matches the correct sub-contractor.

https://www.iowaworkcomp.gov/nonelection_list

For more information from Iowa Workforce Development, click the link below.

https://www.iowaworkcomp.gov/nonelection-workers-compensation-or-employers-liability-coverage-under-iowa-code-section-8722

Why am I charged workers compensation premium for sub-contractors? Many states have ruled that the general contractor is responsible for injuries of uninsured sub-contractor’s employees. The injured employee can file against the general contractor’s workers compensation policy. This creates an increased exposure for the insurance company and justifies an increased premium to cover the exposure from employees of uninsured sub-contractors.