The workers' compensation policy itself is covered in the national workers' compensation guide: Part One statutory benefits, Part Two employers liability, and premium based on payroll and class codes. Kentucky's workers' compensation law is KRS Chapter 342. Claims are processed and adjudicated by the Department of Workers' Claims, which is attached to the Office of the Governor and headed by a commissioner the Governor appoints with Senate confirmation (KRS 342.118). The Department of Insurance regulates the insurers that write the coverage but doesn't decide claims. Employers buy from private carriers or qualify to self-insure. Kentucky has no monopolistic state fund.

The bargain

• Employers are liable for compensation without regard to fault (342.610(1)).
• When an employer has secured payment, its liability is exclusive of all other liability to the employee for the injury (342.690(1)).
• Deliberate injury. If the employer deliberately intended to injure the worker, the worker may take compensation or sue at law instead. Choosing one waives the other (342.610(5)).
• Uninsured employer. If the employer failed to secure compensation, the worker may claim compensation and sue for damages. The employer then can't plead contributory negligence, assumption of risk or the fellow-servant rule (342.690(2)).

Who is covered

• Mandatory coverage. Any employer with one or more employees is covered, except those engaged solely in agriculture (342.630).
• Covered employees include executive officers of corporations and minors, whether lawfully or unlawfully employed (342.640).
• Exempt (342.650):
  • agricultural workers
  • domestic servants in a private home if the employer has fewer than two domestic employees working 40+ hours a week
  • people doing maintenance, repair or remodeling at the employer's private home for 20 consecutive work days or less
• Owners. Sole proprietors, qualified partners and LLC members may elect coverage by endorsement to the policy (342.012).
• Contractors (342.610(2)). A general contractor is liable for an uninsured subcontractor's injured employees and may recover from the subcontractor.

What is a compensable injury (342.0011(1))

• An injury is a work-related traumatic event that causes a harmful change evidenced by objective medical findings. The effects of natural aging are excluded.
• Psychological or stress-related conditions count only when they directly result from a physical injury.
• Drugs. If an illegal or nonprescribed impairing substance is found, it is presumed to have caused the injury, and compensation doesn't apply (342.610(4)).
• Hiring misstatements (342.165(2)). An employee who lied in writing about a prior condition when hired loses compensation only if all three of these are true:
  1. the misrepresentation was knowing and willful
  2. the employer substantially relied on it in hiring
  3. there is a causal link between the lie and the injury

Benefits (KRS 342.730, 342.040)

Safety violations (342.165(1)):

• An employer's intentional violation of a specific safety rule raises each payment by 30%.
• An employee's intentional failure to use safety equipment or follow safety rules lowers each payment by 15%.

Notice and claim deadlines (342.185)

• The worker gives notice as soon as practicable.
• A claim is filed within two years of the accident, or within two years after income benefits stop.
• For cumulative trauma, the claim is filed within two years after a physician tells the worker the condition is work-related. It is barred entirely if not filed within five years of the last injurious exposure.

Securing coverage

• An employer must insure with an authorized carrier or prove financial ability to pay and qualify as a self-insurer (342.340(1)).
• The carrier files proof of coverage with the commissioner within 10 days of issuing the policy (342.340(2)).
• Employers post a notice with the carrier name and policy number, how to get medical care, and the duty to report accidents (342.610(7)).
• A builder must show proof of coverage, or a certified exemption, before getting a building permit (342.610(6)).
• Penalty for not insuring: $100 to $1,000 per offense, and each employee and each day is a separate offense (342.990).
• Workers' compensation and employer's liability are classified as casualty insurance (KRS 304.5-070).
• If a carrier becomes insolvent, the Kentucky Insurance Guaranty Association pays covered workers' comp claims in full.

Common exam traps

• Claims go to the Department of Workers' Claims, attached to the Governor's office, not the Department of Insurance.
• One employee triggers coverage. Agriculture is exempt.
• TTD is 66 2/3%, capped at 110% of the state average weekly wage. PPD is capped at 82.5%.
• The waiting period is 7 days, paid back if disability lasts more than two weeks.
• A claim is filed within two years. Cumulative trauma claims are barred after five years.
• A safety violation means +30% (employer) or −15% (employee).
• Income benefits end at 70 or four years after injury, whichever is later.