(2) To be valid, all corporate officers and directors who own 25 % or more of the issued and outstanding shares of the corporation must be named on the Form 153. There can be no more than four (4) corporate officers or directors named on the Form 153. All corporate officers or directors named on the Form 153 must attach their signature(s) to the document for it to be considered valid. The information contained on the Form 153 provided by the corporate entity will be checked against the articles of incorporation and the annual report on file with the Secretary of the Commonwealth. Should the information contained in the Form 153 not match the information contained in the documents on file with the Secretary of the Commonwealth, the Form 153 shall be rejected and the exemption will not apply.
(3) Not all corporate officers and directors need to exercise their right of exemption from the provisions of MGL c. 152 for the exemption to be valid. If one or more of the corporate officers or directors who are eligible for the exemption decide not waive their rights to workers' compensation, they must do so by marking the box located beneath their signature on the Form 153 which states "I wish not to exercise my right of exemption." If any of the corporate officers or directors have signed the Form 153 and indicated that they will not exercise the right of exemption, then workers' compensation coverage must be in place for those non-exempted corporate officers or directors per MGL c. 152, § 25A. Failure to do so shall be deemed a violation of the statute and the corporation will be subject to the fines and penalties delineated in M.G.L. c. 152, §25C. Whether or not an eligible corporate officer or director exercises their right of exemption, ALL eligible officers or directors must sign the Form 153 for the form to be approved by the DIA.
(4) Upon review and approval of the Form 153 by the DIA, the corporate officer(s) or director(s) named therein shall be deemed exempt from the provisions of MGL c. 152. If the corporation carries worker's compensation insurance, the corporation must provide a copy of the approved Form 153 to the insurance carrier as proof that the named corporate officer(s) or director(s) have been properly exempted and that workers' compensation coverage is no longer required for those persons. The corporation will be provided a copy of the approved Form 153; a self-addressed stamped envelope should be included with the Form 153 submission. An approved Form 153 will be marked as such in the upper right hand corner of the form and will indicate the date of approval and the initials of the commissioner of the DIA and/or his designee. Upon notification to the insurance carrier that said corporate officer(s) or director(s) has exercised his or her right of exemption, the salary and/or compensation of the exempted corporate officer(s) or director(s) shall no longer be considered in calculating the premium for the corporation's workers' compensation policy. Notwithstanding any earlier date indicated on an approved Form 153, the effective date of the requisite changes to any existing workers' compensation policy shall be either
(a) the next policy effective date following the carrier's receipt of the approved Form 153, or
(b) the day following the carrier's receipt of the approved Form 153 along with a written request that the election be made effective mid-term.
All such written requests must be on the employer's corporate letterhead and signed by a corporate officer.
(5) If, after an approved Form 153 has been submitted to a carrier, one or more exempted officer(s) or director(s) chooses to be covered under the current worker's compensation policy, he or she must submit a written, signed request on corporate letterhead to the carrier. Coverage will be made effective for that officer(s) or director(s) as of the day after receipt of the written request. Such coverage shall remain in effect until completion of the current policy term. A new Form 153 must be submitted to the DIA and then sent to the carrier.
(6) A copy of the approved Form 153 must be submitted to the insurance carrier on an annual basis, prior to the renewal of any existing policy, as affirmation that the statements contained therein remain in effect. If the approved Form 153 is not submitted to the carrier the corporate officers and directors shall be covered under the renewal policy, and the salary or compensation of those officers and directors shall be included in the premium calculation.
(7) If the corporate officer(s) or director(s) who have exercised their right of exemption are the only employees of the corporation, said corporation may legally operate without workers' compensation insurance. However, should that same corporation at any time employ persons other than the named corporate officers or directors on the Form 153, workers' compensation coverage must be in place for those employees per MGL c. 152, § 25A. Workers' Compensation insurance coverage must also be in place if that same corporation hires others (such as subcontractors) for whom it may be required to provide coverage pursuant to MGL c. 152, § 18. Failure to do so shall be deemed a violation of the statute, and the corporation will be subject to the fines and penalties delineated in MGL c. 152, § 25C.
(8) Should the status of any or all of the corporate officers or directors named on an approved Form 153 change, the corporation must submit a new Form 153 to the DIA and notify the insurance carrier in writing of the change in corporate status within ten calendar days of said change. A change in corporate status shall include the reduction in ownership share of any one exempted corporate officer or director to less than 25% of issued and outstanding stock; the resignation of any exempted corporate officer or director; the addition of an eligible corporate officer or director; or other changes that make a corporate officer or director ineligible for the exemption under MGL c. 152, § 1(4). If any corporate officer or director has their interest in the corporation reduced to below 25%, but still maintains a position in the corporation, workers' compensation coverage must be obtained for that corporate officer or director as they would no longer be eligible for the exemption. Failure to do so shall be deemed a violation of the statute and the corporation will be subject to the fines and penalties delineated in MGL. c. 152, § 25C.
(9) A corporate entity may employ persons other than corporate officers or directors who have exercised his/her right of exemption. If the corporate entity does so, valid workers' compensation coverage must be in place to provide benefits to any employees in accordance with MGL c. 152. However, for the purpose of calculating the workers' compensation policy premium, the salary of any properly exempted corporate officer or director should not be included.
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