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    OpenPayerPolicy UpdatesAdministrative/Operational PolicyAlabama DOI group disability coverage update | Ope…
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    CurrentAlabama Department of InsurancePolicy 2020-08

    Group Disability Insurance in the Growing Gig Economy

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    This bulletin states the Department's position on which groups qualify for group disability insurance under Ala. Code §27-20-1, clarifying that certain independent contractors and gig-economy workers may be eligible. It applies to insurers writing health insurance in Alabama.

    Policy Summary
    PayerAlabama Department of Insurance
    PolicyGroup Disability Insurance in the Growing Gig Economy
    Policy CodePolicy 2020-08
    Change TypeInterpretive clarification
    Effective DateApr 22, 2020
    Next Review DateN/A
    Key ActionInclude individuals engaged as independent contractors and other flexible or temporary workers as eligible for group disability coverage under commissioner discretion.
    SourceLink
    POLICY UPDATE CHANGES

    No material clinical or coverage changes in this revision.

    1statutory provision cited
    Immediateeffective date status
    All insurersaudience

    Group Disability Insurance Eligibility Criteria

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    Eligibility criteria

    Covered when ALL of the following are met:

    Statutory groups: policy is issued to an employer or trustees of a fund established by an employer as policyholder, insuring employees as defined in Ala. Code §27-20-1(1).

    ALL of the following

    • The statute's definition of 'employees' includes officers, managers, individual proprietors, partners, and employees of subsidiary or affiliated corporations or businesses under common control (stock ownership, contract, or otherwise).
    • Independent contractors are not included in the statutory definition of 'employees' in §27-20-1(1).

    ALL of the following

    • Commissioner discretion: Under §27-20-1(5), the Commissioner may recognize 'any other substantially similar group' as eligible for group disability coverage.
    • Department interpretation: the Commissioner (via the Department) deems appropriate to include individuals engaged with a business as independent contractors and other flexible or temporary workers as eligible for coverage under a group disability policy or contract.

    Department Direction for Insurers / Providers

    Note

    Eligibility expansion — include independent contractors and flexible/temporary workers

    The Department will recognize as eligible for group disability coverage individuals engaged with a business as independent contractors and other flexible or temporary workers, under the commissioner’s discretion in Ala. Code §27-20-1(5). Insurers should treat such individuals as part of an eligible group when issuing group disability policies or contracts where the group is otherwise substantially similar to statutory employee groups.

    • This expansion is based on the commissioner’s authority to recognize “any other substantially similar group” under §27-20-1(5).
    • The bulletin explicitly deems appropriate inclusion of independent contractors and flexible or temporary employees for group disability coverage.

    Key Definitions Used in This Bulletin

    employees / independent contractors (as used in §27-20-1)
    Statutory inclusionsThe term 'employees' in §27-20-1(1) includes officers, managers, individual proprietors, partners, employees of subsidiary or affiliated corporations, and those under common control.
    Independent contractorsIndependent contractors are not included in the statutory definition of 'employees' under §27-20-1(1).
    Commissioner discretion (actionable)Under §27-20-1(5), the commissioner may recognize 'any other substantially similar group' — the Department deems this authority appropriate to include individuals engaged with a business as independent contractors and other flexible or temporary workers for eligibility under group disability policies or contracts.
    Common-control clauseThe statutory definition covers individuals and firms where the business is under common control through stock ownership, contract, or otherwise.
    Application scopeThis interpretation guides which groups insurers may treat as eligible for group disability insurance under Alabama law, particularly in the gig economy context.
    Policy Summary
    PayerAlabama Department of Insurance
    PolicyGroup Disability Insurance in the Growing Gig Economy
    Policy CodePolicy 2020-08
    Change TypeInterpretive clarification
    Effective DateApr 22, 2020
    Next Review DateN/A
    Key ActionInclude individuals engaged as independent contractors and other flexible or temporary workers as eligible for group disability coverage under commissioner discretion.
    SourceLink
    On This Page
    Group Disability Insurance Eligibility CriteriaDepartment Direction for Insurers / ProvidersKey Definitions Used in This Bulletin