Kentucky workers' compensation guide to help keep employees and employers protected

Why is workers’ compensation insurance important?

Workers’ compensation insurance is designed to provide medical treatment and supplemental wages to Kentucky workers that are injured or become ill on the job. But workers’ compensation also offers a safety net to employers, protecting them from potential lawsuits from employees that are injured while working.

Now that we know what a workers’ compensation policy is for, let’s find out which businesses in Kentucky need to have one in place.

What are Kentucky’s workers’ compensation insurance requirements?

All Kentucky employers with one (1) or more workers are required to maintain workers’ compensation coverage. This includes both public and private sector employers. There are no exceptions for family members, temporary, or part-time employees. In addition, any employer performing work in Kentucky, even temporarily, is required to have Kentucky workers’ compensation coverage.

Every employer in Kentucky is required to display a Kentucky Workers’ Compensation posting notice in a conspicuous area in their primary place of business.

Are there any exemptions?

There are some businesses that are exempt from providing workers’ compensation insurance. These businesses include:

• Agricultural businesses
• Any person or entity with less than two full-time employees employing domestic workers in a private home
• Employers whose employees are covered by federal workers’ compensation programs such as railroad and maritime workers
• Religious organizations
• Homeowners that employ a maintenance or repair person for up to 20 consecutive workdays.
• Independent contractors – The Kentucky Supreme Court developed a guide to help businesses determine whether a worker is an independent contractor or an employee.

Even though the above employers are exempt from workers’ compensation requirements, they can voluntarily participate in their employer’s workers’ compensation program, if one is in place.

In addition, employees can also choose to reject workers’ compensation protection by submitting a completed Form 4 Waiver to the Kentucky Department of Workers’ Claims.

Now that we know which employers must have coverage, let’s look closer at the types of benefits that a policy provides.

What workers’ compensation benefits are typically available to Kentucky employees?

Workers’ compensation law in Kentucky is designed to compensate employees that are injured or become ill on the job. This coverage includes:

• Medical Coverage — including medical treatment, surgical and hospital treatment, nursing expenses, and any medical supplies, surgical supplies, and appliances that may be needed.
• Temporary Total Disability — Employees that have sustained an injury that leaves them unable to work are eligible for income benefits, with a minimum and maximum amount.
• Permanent Partial Disability — When an employee is determined to be permanently partially disabled, they are eligible for weekly benefits determined by the level of disability.
• Permanent Total Disability — When an employee is permanently impaired, they are eligible for a weekly benefit based on their average weekly wage before injury or illness.
• Rehabilitation Services — Any employee injured on the job is entitled to physical rehabilitation services. If the employee cannot perform the work entailed in their previous job, they are entitled to vocational rehabilitation services which includes retraining.
• Death and Burial Expenses — The family or beneficiary of any employee that dies as a result of an at-work injury or illness is entitled to death benefits including burial expenses.

Kentucky workers’ compensation also offers a return-to-work program that is designed to adequately prepare injured employees to return back to work by coordinating medical services and rehabilitation efforts. In addition, Kentucky is one of the few states that offers a settlement with the option of reopening the case at a later date.

With an overview of the benefits that a policy provides, its time to cover how an employer can buy workers’ compensation coverage.

How can Kentucky businesses purchase workers’ comp insurance?

Kentucky employers can purchase workers’ compensation insurance from any licensed insurance agent that is authorized to sell workers’ compensation policies. Any business deemed high-risk can purchase insurance from the state’s assigned risk residual market. Larger Kentucky businesses may also choose to self-insure, though specific financial criteria must be met to be eligible to self-insure. Businesses interested in self-insuring can submit Form SI-02 Employers Application for Permission to Carry His Own Risk Without Insurance.

What are the penalties for not having workers’ compensation insurance?

Although sharing bad news is never fun, companies that choose not to have coverage may experience some less than ideal results.

• Any employer who does have workers’ compensation insurance will be fined, with fines starting at $100 per employee up to $1,000 per employee for each day that the business is without workers’ comp coverage.
• In addition, if an employee is awarded benefit from the Uninsured Employers’ Fund (UEF) for injuries sustained, the business is required to reimburse UEF for any money paid to the employee.
• Any uninsured employer is also subject to any lawsuit for pain and suffering and punitive damages that the employee may seek.
• Criminal penalties are also a possibility for offenders, which can include fines, jail time, or both.

What happens when an employee is injured?

An employee must report their injury to a supervisor, human resource rep, or designated party as soon as possible. Once provided notice of injury or illness, an employer is required to report the incident to their workers’ compensation insurance carrier within three days of receiving notification using the First Report of Injury or Illness form. All written workers’ compensation claims need to be filed within two years of injury, while claims for occupational diseases have to be filed within three years of diagnosis or after symptoms first appear, whichever is earlier.

An injured employee should seek emergency treatment if necessary. For those looking for a participating physician, they should search the rosters of treating physicians and all participating providers.

More resources for Kentucky employers

For additional information about Kentucky workers’ compensation, you can contact the Kentucky Workers’ Comp – Department of Workers’ Claims at 502-564-5550 or by visiting their website. Below are additional resources that can be helpful for Kentucky businesses.

• State information
• Kentucky Workers’ Compensation Manual
• Employee FAQs
• Employer FAQs
• Workers’ compensation forms
• Workplace posting notice