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Elective coverage
If an employer has no employees, Ohio law makes workers' compensation coverage elective

If an employer has employees, workers' compensation coverage is required. Employees are defined as people:

  • Whose hiring contract was completed within the borders of Ohio.
  • Where the employer's main (supervising) office is located within Ohio.

If an employer has no employees, Ohio law makes workers' compensation coverage elective (optional) for the following employers:

  • Sole proprietor. 
  • Partnership.
  • Limited liability company (LLC) acting as a sole proprietor. 
  • Limited liability company (LLC) acting as a partnership. 
  • Family farm corporate officers. 
  • Individual incorporated as a corporation (also called a sole-owner corporation). 
  • Ordained or associate ministers of a religious organization. 

Remember, if you choose not to cover yourself and you are injured at work, BWC will not provide coverage. And other insurance may not cover your work-related disability or medical bills. 

If you do elect to cover yourself, this coverage is in addition to or is supplemental to your current policy. Employers can apply for elective coverage within the initial application, Application for Ohio Workers’ Compensation Coverage (U-3) or at a later date with the Application for Elective Coverage (U-3S). You must complete an additional application for elective coverage to cover owners or ministers you wish to add at a later date. Elective coverage is effective the date we receive the U-3S and the required premium installment payment.

We will cancel the elective coverage if you fail to report at least the minimum required amount of payroll for any reporting period that the coverage is in effect. Employers are responsible for the payment of premiums up to the date they ask to cancel their elective coverage.

Sole proprietor or partnership coverage

For all individuals electing coverage, the reportable wages are subject to a minimum and maximum, which is based on the statewide average weekly wage calculated annually by the Ohio Department of Job and Family Services. These changes became effective July 1, 2006. View the minimum/maximum payroll reporting requirements.

Independent contractors and subcontractors

Independent contractors and subcontractors may elect coverage for themselves if they are sole proprietors or partners. If an independent contractor or subcontractor controls the selection of materials, traveling routes and quality of performance of another worker, that independent contractor or subcontractor is considered an employer and, as such, is required to provide workers' compensation coverage for that worker.

Limited liability companies (LLC)

These companies can be considered corporations, sole proprietorships or partnerships for tax purposes. Whatever the LLC considers itself for tax purposes determines whether the LLC owner must have workers' compensation coverage. If the LLC considers itself a sole proprietorship or partnership, coverage is optional for the owner. If the LLC considers itself a corporation, the owner must cover himself or herself.

Family farm corporate officers

Family farm corporate officers are not considered employees for purposes of reporting payroll and assessing premiums, but they may elect coverage. To qualify as a family farm corporation the following criteria must be met:

  • The family farm must be founded for the purpose of farming animal or plant products intended for consumption by human beings or animals (excluding nurseries and flower production enterprises). 
  • A majority of the shareholders must be related within the fourth degree of kinship (siblings, parents, grandparents, aunts, uncles, great aunts, great uncles or first cousins) or be the spouse of such persons. 
  • No shareholder may be a corporation. 
  • At least one of the related persons within the corporation must reside on or actively operate the farm. 

View the minimum/maximum payroll reporting requirements. 

Individual incorporated as a corporation

Legislation changed the definition of employee in Section 4123.01(A)(2)(c) of the Ohio Revised Code to eliminate required coverage for an individual incorporated as a corporation when there is a sole owner and no employees. As described above, individuals incorporated as a corporation may elect to cover themselves by completing and filing an Application for Elective Coverage (U-3S).

An individual incorporated as a corporation is defined as a sole owner corporation with no employees and refers only to the owner of the corporation in terms of being excluded as an employee. This includes any corporation (C-Corp, S-Corp, LLC Corp reporting as a C-Corp or S-Corp) as long as there is a sole owner with no employees.

Ordained or associate ministers

BWC provides two coverage options for ministers. First, churches may provide elective coverage for ministers under the religious organization's policy by submitting a signed Application for Elective Coverage U-3S. They must submit a new U-3S each time they want to add coverage for a new minister. Ministers are considered employees, so churches must report all remuneration for them. No minimum or maximum payroll limits exist.

Second, if a church decides not to cover its ministers under the religious organization's policy, the ministers may elect to establish their own coverage as sole proprietors using the Application for Ohio Workers’ Compensation Coverage (U-3). View the minimum/maximum payroll reporting requirements.