This bill amends the New Jersey workers' compensation law to clarify the definition of "employee" and the requirements for workers' compensation insurance for certain business structures, particularly S corporations. It specifies that an individual who is both the sole employee and sole shareholder of an S corporation will not automatically be considered an "employee" for the purposes of receiving benefits and paying premiums unless the corporation elects to obtain coverage for that individual. Additionally, the bill introduces a provision that allows self-employed individuals, partners in limited liability partnerships, and members of limited liability companies to be classified as employees for workers' compensation purposes if their business opts for coverage at the time of policy purchase or renewal.

Furthermore, the bill includes a stipulation that businesses are not required to purchase a workers' compensation policy unless they have at least one employee who is not a self-employed person or partner actively performing services. It also outlines that insurers will not be liable for damages if a business fails to elect coverage for self-employed individuals unless the insurer's actions are willful or grossly negligent. The bill aims to provide clarity and flexibility in workers' compensation coverage for specific business entities while ensuring that the necessary protections are in place for employees. The act will take effect 180 days after enactment and will apply to all policies issued thereafter.