Employer Responsibility for Workers’ Compensation in Kentucky
The Kentucky Workers’ Compensation Act (WCA) lists the requirements for employers related to workers’ compensation. The benefits themselves are administered by the Kentucky Department of Workers’ Claims (DWC), which also enforces each employer’s compliance with the WCA.
The vast majority of employers in Kentucky must comply with the WCA. Employers are subject to the legislation if:
- They employ at least one person
- They are not solely focused on agricultural work
Even if an employer is exempt from the rules of the WCA, it can still elect to become subject to WCA rules by complying with coverage requirements.
WCA coverage requirements
The WCA requires all nonexempt employers to maintain workers’ compensation coverage for employees. This can be done in one of two ways:
- Purchasing a workers’ compensation insurance policy from an entity that has been authorized to provide such policies in the state of Kentucky
- Obtaining approval from the DWC to self-insure as part of a group or as an individual employer
Employers must pay the full cost of workers’ compensation coverage and cannot deduct portions of that cost from the salaries or wages of their employees.
The DWC ensures all workers’ compensation policies that employers provide meet the minimum standards of the WCA. The agency maintains compliance by requiring insurance companies to submit all policies for approval before they are issued. Then, in accordance with the WCA, the insurance companies take the role of paying workers’ compensation benefits, a role that would otherwise be left to the employer.
Workers’ compensation policies must cover the employer’s full benefits liability for each employee. Employers may also cover their liability with two different policies, so long as they have obtained a DWC-approved 24-hour health insurance policy. This policy provides integrated workers’ compensation coverage for group health benefits in addition to the medical part of workers’ compensation benefits.