The Alaska Officer Exemption Trap: A Frozen Asset Risk
Quick Takeaways
- The Trap: Alaska’s officer exemption rules are rigid. If you don’t file the right forms with the State of Alaska, your “executive status” won’t save you from a $1,000-a-day uninsured penalty.
- The Rule: Executive officers of a corporation are included by default. You must specifically “opt-out” to save on premium—but doing so leaves you without a safety net.
- The Fix: Audit your corporate filings. If you aren’t active in the day-to-day work, exclude yourself. if you are, keep the coverage.
- Learn More: Ready to protect your Alaska business? Agents can see how IWCP membership keeps you ahead. Employers can take control at LockedAndLoadedTraining.com.
It’s a rigged game.
You run a corporation in Alaska. You’re the President, your partner is the VP, and you have two guys in the field. You’ve been told that “owners don’t need work comp.” You save the premium on your six-figure salaries and focus on the business. You think you’re being efficient.
You aren’t being efficient. You’re building a financial freezer for your assets.
In Alaska, the state assumes every officer is an employee. Unless you have a specific, approved waiver on file with the Division of Workers’ Compensation, the state computer treats you as an uninsured person. When the audit hits, or worse, when you get a “no-insurance” notice from the state, you aren’t just paying back premium—you are paying for the privilege of staying in business.
The Alaska Officer Default
Most Alaska business owners believe the myth that “if I own the company, I’m not an employee.” In most other states, that might be true. But in the Last Frontier, the law defaults to inclusion. Under Alaska Statute, every executive officer is an employee unless they are explicitly excluded.
Why your title doesn’t override the statute
You can call yourself the owner, the founder, or the grand poobah. The Alaska Industrial Commission only cares about what’s on your insurance policy. If your agent didn’t have you sign the specific Alaska exclusion forms, the carrier is legally required to charge you for your payroll up to the state maximum.
This is where many agents fail their clients. They see “Officer” and assume the exclusion is automatic. It isn’t. You are leaving money on the table for the carrier to take at audit time.
The “Opt-Out” choice
Imagine you decide to exclude yourself to save $5,000 a year in premium. You feel smart. Then you slip on an icy job site and break your hip.
Because you opted out, you have zero workers’ comp coverage. You go to the hospital, hand them your personal health insurance card, and wait for the bill to be paid. But your personal health insurance has an exclusion for work-related injuries. You just traded a $5,000 premium saving for a $100,000 medical bill. This is why we say that an exemption is often just a “target” for insurers to shoot at.
Conclusion: Fortune Favors the Boldly Insured
An Alaska construction firm recently learned this lesson when they were hit with a $15,000 audit bill. The owner thought he was excluded, but his agent never filed the paperwork. The state ruled him an “included” employee and charged him for the full year of payroll. He didn’t lose his business, but he lost his entire profit margin for the quarter because he didn’t hold the cards in the paperwork game.
Don’t let your business be frozen by a filing error. It’s your move. Does that make sense?
Kick the desk and take control of your process. Agents can learn the protocols at the Institute. Employers can take control of their costs at LockedAndLoadedTraining.com.
Fortune favors the bold, but it really favors the one who takes action.
Kick the desk and take control.