Kentucky Workers Compensation

Workers compensation insurance in Kentucky helps protect employers and workers when an employee becomes injured or contracts a disease as a direct result of their work. Learn about KY workers compensation laws, work-related injury reporting and key considerations for complying with workers comp laws.

Understanding workers compensation in Kentucky

From bluegrass music to horse races and historic parks, Kentucky has something for everyone. Many businesses choose to operate in Kentucky as well, including the automotive, aerospace and food and beverage industries.

With a broad range of industries and employment opportunities across the state, the need for protection of businesses and employees is important – whether it’s workers comp in Louisville, Kentucky or one of Kentucky’s charming smaller towns. Travelers has the workers compensation insurance expertise that employers need to keep operations running and support injured employees in their recovery.

Who is required to carry workers compensation insurance in Kentucky?

If an employer has one or more employees, they are required to obtain workers compensation coverage. Certain occupations are exempt from coverage, including but not limited to agricultural employees, two or less regularly employed domestic workers, and certain religious groups that oppose insurance.

Kentucky requirements to consider

Failure to provide required workers compensation insurance can expose employers to severe consequences, including civil liability for employee injuries, illnesses, or deaths, criminal charges and penalties, monetary fines imposed by state authorities, and stop-work orders halting business operations until coverage is obtained.
Uninsured employers may be subject to legal action by the state Uninsured Employers Fund (UEF) and required to repay the Fund for any awarded benefits paid to employees.

Who can receive workers compensation benefits in Kentucky?

Injured employees are generally eligible to receive workers compensation benefits. Some individuals are automatically included in or excluded from workers compensation in Kentucky.

Corporations: Officers are included in coverage and may elect to be excluded from coverage.
Partnerships:
- Qualified partners of a partnership owning a business are excluded from coverage and may elect to be included in coverage. A qualified partner is defined as a partner who has entered into a meaningful partnership agreement, which shows on its face that the partner will substantially participate in the profit or loss of the business engaged in by the partnership, and that the partner has made some contribution to the partnership, which entitles them to participate in the profits of the business and the decision-making process of the partnership.
- Nonqualified partners are included in coverage and may not elect to be excluded from coverage. A nonqualified partner is defined as a person who has entered into a partnership agreement, which shows on its face that this person will receive regular payments in exchange for work for the business engaged in by the partnership. It also shows that the person will not participate in the decision-making of the partnership and will not participate in the profits and losses of the business engaged in by the partnership.
Sole Proprietorships: Sole proprietors are excluded from coverage and may elect to be included in coverage.
Limited Liability Companies (LLCs):
- A qualified member of an LLC is defined as a member who has entered into meaningful articles of organization or a meaningful operating agreement of an LLC, which shows on its face that the member will substantially participate in the profit or loss of the business engaged in by the LLC. It also shows that the member has made some contribution to the LLC, which entitles them to participate in the profits of the business and in the decision-making process of the LLC. Qualified members are excluded from coverage and may elect to be included in coverage. A qualified LLC member is someone who is listed in the LLC’s articles of organization or operating agreement, meaningful shares in the business’ profits or losses, contributes to the LLC, and participates in the LLC’s decision-making process.
- A nonqualified member of an LLC is defined as a person who has entered into articles of organization or operating agreement of an LLC, which shows on its face that this person will receive regular payments in exchange for work for the business engaged in by the LLC. It also shows that the person will not participate in the decision-making of the LLC and will not participate in the profits and losses of the business engaged in by the LLC. Nonqualified members are included in coverage and may not elect to be excluded from coverage. A non-qualified LLC member is someone who is listed in the LLC’s articles of organization or operating agreement, receives regular payments for work performed for the LLC, and does not participate in LLC decision-making or share in the LLC’s profits or losses.

Overview of workers compensation requirements in Kentucky

Understanding Kentucky workers compensation is essential for employers. Being aware of state requirements helps employers comply with the law and support employees. This is an overview of the fundamentals of employer responsibilities and the benefits employees may receive under KY workers compensation law.

Kentucky workers compensation employer responsibilities overview

Compensable injuries

Generally, injuries arising out of and in the course of employment, regardless of whose fault it is, have potential for workers compensation benefits. This includes occupational diseases and cumulative trauma injuries.

Occupational diseases and cumulative trauma injuries are conditions that develop over time in the workplace.

The employee may need to show that the employment placed the employee at an increased risk of developing the disease as compared to the general public.
Claims must be supported by sufficient evidence linking the condition to work duties.
Benefits include medical care, wage-loss compensation, and impairment or disability payments, comparable to those available for acute injuries.

Posting notices

Kentucky employers must display the Kentucky Workers’ Compensation Posting Notice in a conspicuous location at the workplace.

This notice must include the employer’s workers compensation insurer, policy number, procedures for reporting workplace injuries, instructions for accessing medical treatment, and a summary of employee rights under state law.
The notice must also indicate whether the employer participates in a Managed Care Plan (MCP) and provide the appropriate MCP contact information if applicable.

Providing medical treatment 

Injured employees in Kentucky are entitled to all reasonable and necessary medical treatment for work injuries or occupational diseases at no cost to them. Employers and their insurers are responsible for covering these medical expenses.

Injured employees have the right to choose their treating physician by completing form 113, “Notice of Designated Physician.”
When the employer is enrolled in a certified managed care plan, the injured employee must select an in-network gatekeeper physician to provide primary care and make referrals for specialized care or diagnostic services.

Providing lost wages (indemnity) 

Employers can be responsible for lost wages, including decrease in pay due to modified job responsibilities. The employee benefits section gives a more in-depth explanation of the types of wage benefits employers may be responsible for.

Prompt reporting and forms

Employers should encourage employees to promptly notify them of any accident or injury. Once aware of a work-related injury, the employer should make sure the injured employee understands they can seek medical treatment if needed. The employer should notify their insurer right away of any work accident or injury so that their insurer can timely report to the Kentucky Department of Workers' Claims.

Employers or their insurer may need to report claim information throughout the claim process, such as:

Kentucky employers must keep detailed records of all work injuries and illnesses. Injuries must be reported to their workers compensation insurer within 3 working days.
Employers may be required to submit form AWW-1, “Average Weekly Wage Certification,” which details the injured employee’s earnings for workers compensation benefit calculations.

Prompt reporting is essential to avoid penalties and provide timely benefits for injured employees.

Record keeping

Employers should maintain thorough documentation, including details about what happened, when, where and witnesses involved. Accurate record keeping and prompt reporting to their workers compensation insurer can play a key role in a timely and complete investigation and handling of the claim.

The employer should continue to maintain and provide necessary information to their insurer throughout the claim process as it is vital for efficient claim handling and compliance with the workers compensation law.

Penalties

Employers may face substantial fines, penalties, and citations for failing to procure insurance, report injuries, or for engaging in unlawful retaliation.

Kentucky workers compensation employee benefits overview

Calculating Average Weekly Wage (AWW) in Kentucky

An employee’s Average Weekly Wage (AWW) is a set calculation based on Kentucky state requirements. It helps to determine workers compensation wage benefits. Correct benefit amounts can be determined after an employee’s AWW is calculated.

Temporary Total Disability (TTD) benefits

Temporary Total Disability (TTD) benefits are paid when an injured employee is unable to work due to a work injury or illness.

Benefits begin on the eighth day of disability, with a 7-day waiting period that is retroactively paid if the disability lasts more than 14 days.
TTD benefits equal two-thirds (66 2/3%) of the employee’s Average Weekly Wage (AWW), subject to state minimum and maximum rate limits.
By law, all indemnity benefits, including TTD, end at age 70 or 4 years after the date of injury or last exposure, whichever occurs later.

Temporary Partial Disability (TPD) benefits

The state of Kentucky does not provide Temporary Partial Disability (TPD) benefits by statute. Employers are encouraged to support return-to-work efforts by offering meaningful light duty or temporary modified assignments that qualify as “customary work,” consistent with the employee’s training and experience.

Permanent Partial Disability (PPD) benefits

Permanent Partial Disability (PPD) benefits apply when an injured employee sustains a permanent impairment from a work injury or illness.

A medical evaluation determines Maximum Medical Improvement (MMI) and assigns an impairment rating using the edition of the AMA Guides designated by Kentucky WC law. This rating is multiplied by statutory factors to calculate the Permanent Disability Rating (PDR).
PPD benefits are calculated by multiplying two-thirds (66 2/3%) of the employee’s Average Weekly Wage (AWW) by the PDR, subject to state rate limits.
If the PDR is less than 50%, benefits are payable for up to 425 weeks; if the PDR is 50% or greater, benefits continue for up to 520 weeks.
By law, all indemnity benefits, including PPD, end at age 70 or 4 years after the injury or last exposure, whichever occurs later.

Permanent Total Disability (PTD) benefits

Permanent Total Disability (PTD) benefits are available to injured employees who are permanently and totally disabled due to a work injury or illness.

Eligibility is determined based on medical evidence, the employee’s age, vocational skills, and overall inability to work, as defined by state regulations. PTD benefits equal two-thirds (66 2/3%) of the employee’s Average Weekly Wage (AWW), subject to state minimum and maximum rate limits.
Permanent and total disability is irrebuttably presumed for injuries designated by statute.
By law, all indemnity benefits, including PTD, end at age 70, or 4 years after the date of injury or last exposure, whichever occurs later.

Fatality benefits

When a work injury or illness causes an employee’s death, Kentucky workers compensation law provides death benefits to eligible survivors.

A lump-sum payment is made to the employee’s estate, covering funeral and burial expenses up to statutory limits.
Ongoing income benefits are paid to dependents as follows:
- A surviving spouse when there are no children receives 50% of the employee’s Average Weekly Wage (AWW).
- If there are children, the spouse receives 45% if living with the child or children, or 40% when not living with the child or children. The spouse receives an additional 15% for each child, with the total 30% child benefit divided equally if more than two children qualify.
- If there is no surviving spouse, dependent children receive 50% for one child and 15% for each additional child, divided equally.
- In the absence of a spouse or children, other relatives who were dependent on the deceased employee may qualify for benefits.
All death benefits are subject to statutory limits and eligibility requirements.

Vocational rehabilitation

In Kentucky, when a worker is not able to return to the type of work for which they have previous training or experience, they may be eligible for vocational rehabilitation services as reasonably necessary to return to suitable employment. The KY Administrative Law Judge can refer the employee for an evaluation and order recommended services for up to 52 weeks.

Medical benefits

Injured employees are entitled to all reasonable and necessary medical expenses related to a work injury or illness. This includes doctor visits, hospital stays, medications, surgery, physical or vocational therapy and travel reimbursement for authorized treatment.

Employees can choose their medical providers. If their employer is enrolled in a managed care plan certified by the KY Department of Workers' Claims, the employee must choose the primary treating physician from the managed care network, except for emergency treatment.
Employees are not responsible for any copayments or deductibles.

Legislative updates

Regulations, laws and potential changes that can shift your course

As the nation’s largest writer of workers compensation insurance, Travelers is committed to understanding new and evolving legislation, regulations and trends at the state level. Our employees serve on regional and national associations, boards and committees to advocate on behalf of our customers and the industry. We educate stakeholders on the impact legislation can have on businesses. By taking an active role in the legislative process, we participate in the important dialog around worker safety and advocate for best practices industry-wide so all can benefit from our workers compensation expertise.

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Why choose Travelers

Care for the employee, confidence for the employer

Employees are at the heart of every business. That's why Travelers is here to help employers keep them safe and support them when accidents happen. Our experienced teams guide both employers and their injured employees through recovery, from getting the right care to returning to work as soon as medically appropriate. In fact, 70% of injured employees return to work within 30 days.

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