Kentucky Workers' Compensation

Overview

Kentucky has one of the most comprehensive workers' compensation requirements in the country, mandating coverage for employers with just one employee. Understanding these requirements is essential for P&C producers serving Kentucky businesses.

Coverage Requirements

Who Must Provide Coverage

All Kentucky employers with 1 or more employees must maintain workers' compensation insurance.

This includes:

• Private sector employers
• Public sector employers
• Part-time employees
• Full-time employees
• Temporary workers
• Corporate officers (unless exempt)

Threshold Comparison

Kentucky's single-employee threshold is among the strictest in the nation.

Exemptions

Who May Be Exempt

Certain categories may be exempt from mandatory coverage:

Corporate Officers

• Officers with less than 10% ownership are employees
• Officers with 10% or more may exclude themselves
• Exclusion must be formally documented
• Does not affect other employee coverage

Workers' Compensation Benefits

Medical Benefits

Key features:

• No deductible for employees
• No copayments
• Choice of physician (with limitations)
• Lifetime medical for covered injuries

Disability Benefits

Temporary Total Disability (TTD)

Temporary Partial Disability (TPD)

Paid when worker can perform limited work:

• Difference between pre-injury and post-injury wages
• 66 2/3% of the difference
• Subject to weekly maximum

Permanent Partial Disability (PPD)

For permanent impairment after recovery:

• Based on percentage of impairment
• AMA Guides used for evaluation
• Multipliers for occupational disability
• May be paid as lump sum or periodic payments

Permanent Total Disability (PTD)

For workers who cannot return to any work:

• 66 2/3% of average weekly wage
• Paid until age 65 or for life (depending on circumstances)
• Subject to cost-of-living adjustments

Death Benefits

Exclusive Remedy Doctrine

How It Works

Workers' compensation is the exclusive remedy for workplace injuries:

Exceptions to Exclusive Remedy

Employees may sue employers when:

• Intentional harm by employer
• Employer fails to provide coverage
• Third-party liability (not employer)
• Dual capacity doctrine applies

Employer Responsibilities

Posting Requirements

Every Kentucky employer must:

• Display workers' comp notice in conspicuous location
• Post in primary place of business
• Include carrier information
• Update when information changes

Reporting Requirements

Record Keeping

Employers must maintain:

• Injury logs
• First report of injury forms
• Medical treatment records
• Return-to-work documentation

Penalties for Non-Compliance

Civil Penalties

Loss of Protection

Uninsured employers:

• Lose exclusive remedy protection
• Can be sued for negligence
• Subject to pain and suffering claims
• Face punitive damages

Obtaining Workers' Compensation Insurance

Options for Kentucky Employers

Self-Insurance Requirements

To self-insure in Kentucky:

• Minimum $10 million in assets
• Three years audited financial statements
• Posted security ($500,000 minimum)
• Excess insurance ($10 million minimum)

Exam Tip: Remember that Kentucky requires workers' compensation for employers with just ONE employee - this is one of the strictest thresholds in the country. Agricultural employers and certain other categories may be exempt.