Kentucky Workers Compensation Insurance: Quotes From $36/mo

There has been a steady increase in the number of occupational-related injuries and illnesses in Kentucky. The U.S. Bureau of Labor Statistics reported over 38,000 workplace illnesses and injuries in 2019. Another report showed an average of 1,020 occupational-related hospitalizations in 2021.

First-time workplace events cause the vast majority of workers' compensation claims. Workers' compensation insurance premiums should begin to decline as people receive more training, notwithstanding the higher frequency. This article discusses how Kentucky workers compensation insurance works, what it covers, and other essential aspects of this policy.

What Is Workers’ Compensation Insurance?

In 1916, the Kentucky government enacted workers' compensation insurance. The system's main role is to compensate all workers who suffer illnesses or injuries while on their jobs. This act offers benefits to employees and families. Primarily, it safeguards employers and employees by offering a no-fault system to cover all employee injuries regardless of negligence or party at fault.

ffers income protection and medical care to employees who sustain injuries while working. It will also offer your employees incentives to minimize workplace illness and injuries.

If you are operating a small business, purchasing Kentucky workers insurance from private insurers is the best option. But you can self-insure yourself if you own a large corporation with good financial strength. It would be best if you also met the following qualifications:

• Should have assets that are worth $10 million more than your entire liabilities

• Complete a self-Insurance package application form two months before your self-insurance date

• Submit your compensation loss data for your employees in the last five years

• Have a minimum security deposit of $500,000

• Have a Guarantee Agreement

• $10 million minimum coverage limit for each occurrence

• The Board of directors must agree to your decision to become a self-insurer

When Do You Need to Get Workers Compensation Insurance in Kentucky?

All employees in Kentucky need to be covered by good insurance coverage. But some exceptions exist. Here are some industries that must have workers comp insurance in Kentucky:

• Construction: This industry is one of the primary sectors where this insurance is compulsory. All general contractors, subcontractors, and other construction businesses must protect employees from common work-related injuries or illnesses.

• Manufacturing: The manufacturing industry is complex, from food processing to the automotive sector. This nature of work exposes your employees to potential risks in the workplace.

• Healthcare industry: Nursing homes, outpatient centers, and hospitals must have workers comp insurance as employees are exposed to multiple occupational hazards.

• Retail and hospitality: hotels, retail stores, or restaurants must have workers’ compensation to pay for potential accidents and injuries workers may encounter on their job.

• Transportation and logistics: Businesses involved in trucking, warehousing, or logistics must have workers' compensation coverage since they are exposed to numerous risks while driving or loading and unloading heavy boxes. Thus you need to check with Kentucky department of workers compensation for specific requirements.

What Government Agency Oversees Workers Compensation in Kentucky?

Kentucky Department of Workers' Claims (DWC) oversees workers comp insurance in Kentucky. It is an administrative agency that enforces Kentucky workers compensation laws and regulations. However, DWC only deals with administering KY workers comp laws and does not offer insurance coverage to businesses.

Here are some of the key responsibilities and functions of this agency:

• Claims administration: DWC is crucial in processing and investigating workers' compensation claims. They work vigilantly to ensure that all employees receive the required benefits from the workers comp insurance Kentucky after suffering an occupational-related injury.

• Dispute resolution: Disputes between insurance companies, employers, and employees can arise anytime regarding making claims. The government agency is responsible for resolving those conflicts through mediation and administrative hearings.

• Compliance and enforcement: DWC ensures all businesses have the right coverage and comply with Kentucky's stipulated regulations and laws. The role of this agency is to ensure employees receive the right wage replacement benefits and medical treatment.

• Benefit determination: Before an employee receives their benefits, some evaluation must be made to determine the help they should get. DWC is crucial in evaluating medical evidence and assessing an employee's disability rating to determine the right compensation amount.

• Education and outreach: DWC ensures all stakeholders understand Kentucky workers compensation requirements. They do so through educational resources and training programs for all parties.

Which Businesses Are Exempt from Getting Workers Compensation Insurance in Kentucky?

You don't have to worry about acquiring workers' comp coverage if you operate a sole business. Business owners often exclude themselves from this policy and only use health insurance if injured while working.

Here are some common businesses that are exempt from this coverage in Kentucky:

• Sole proprietors: If you own and operate your business individually, you are not legally required to have worker's compensation insurance. You can use your health insurance if you suffer any injuries while working.

• Partnerships: If you are a partner member in a partnership organization, you are exempted from having worker's compensation insurance. But you must insure your employees.

• Domestic workers: All workers employed in a private household, such as caregivers or housekeepers, are not legally required to have worker's compensation insurance.

• Musicians: Musicians who are either self-employed or independent contractors are exempt from obtaining a KY workers comp.

• Workers who are federally covered: Some workers are covered via a federal workers' compensation program and are exempt from securing state workers' compensation insurance.

• Railroad workers: All railroad workers are covered by the Federal Employers Liability Act (FELA) and thus do not require a workers' compensation law.

• Spraying airplane workers: Workers who spray or dust airplanes may have exemptions from KY workers comp insurance.

• Nonprofit organization workers: Workers who volunteer for various nonprofit organizations are exempt from this type of coverage. However, only volunteers are exempted, but those who receive compensation must be adequately covered.

How to Save Money on Your Worker's Compensation Insurance in Kentucky

There are various ways to lower the rates of your worker's compensation insurance. The first way is to classify your employees in the right way. For instance, employees who work on light duties are exposed to minimal risks and will incur minimal costs to insure.

You can also purchase a pay-as-you-go compensation policy, which allows you to pay lower upfront premiums and make payments according to your actual payroll rather than estimated payroll. Lastly, you should have a safety program in place, this will illustrate that you have a safe working environment, and your carriers will charge a lower insurance premium.

How Much Money Does Kentucky’s Workers Compensation Insurance Give?

The amount of compensation you receive will depend on the kind of operations performed and the damage you suffered. Here is a brief breakdown of benefits employees can receive in Kentucky:

Medical Benefits

State of Kentucky workers compensation policy must cover all necessary and reasonable hospital expenses associated with work-related illnesses or injuries. The costs can include medication, surgeries, hospitalizations, and other treatments.

Temporary Partial Disability Benefits (TPD)

These benefits can be primarily made if a physician states that workers cannot resume their normal duties. These benefits are paid if employees cannot perform their duties for up to seven consecutive days. Employees who miss work for eight calendar days after a work-related injury should receive these benefits. The minimum weekly payment an employee will receive is $169.67, and a maximum of $933.35. These benefits will stop when they reach their maximum medical improvement or resume their duties.

Temporary Total Disability Benefits (TTD)

Temporary total disability is when an employee sustains injuries that affect them completely but temporarily. When your physician classifies an employee’s injuries or illness as TTD, they can expect a minimum weekly payment (20% of the stipulated state weekly wage) of $138.86. An employee can expect 100% of the state weekly wage for the maximum weekly payment, amounting to $694.30.

Permanent Partial Disability (PPD)

PPD occurs when an occupational-related injury causes a permanent but partial loss of mental or physical function. This permanent impairment will not prevent employees from engaging in their work duties. However, it will affect their ability to perform some activities. PPD benefits are paid for 425 weeks but, in some instances, can even go up to 520 weeks. However, you lose your eligibility for these benefits once you turn 70. The weekly maximum pay for employees is $323.

Permanent Total Disability (PTD)

PTD will occur when an employee can no longer work after an occupational-related mishap. The PTD benefits are made until an employee dies. These benefits are calculated as two-thirds of an employee's average weekly wage and can be a maximum of up to $711 for one week.

Death Benefits

Beneficiaries may be compensated in the event of a worker's death due to a disease or accident related to their employment. Benefits in Kentucky might reach up to 75% of the deceased worker's weekly salary. But the figures are affected by the maximum ($850) or minimum ($170) amount. Once the benefits are calculated, beneficiaries equitably receive them.

How Long Will It Take an Employee to Receive Benefits?

An employee should be entitled to insurance benefits if they are unable to return to work within seven days of an event at work. They should get lost income benefits within 14 days of informing the employer about the injury. Within 30 days, medical charges must be paid directly to the healthcare provider.

Employees are eligible for retroactive payments if their disability lasts longer than the specified waiting time. In such a situation, an employee will receive benefits even for the waiting period. These benefits will cover the Kentucky workers compensation waiting period from the accident date to when a worker is eligible for the help.

Penalties for Not Getting Worker’s Compensation in Kentucky

All businesses must comply with the Department of workers compensation Kentucky rules and regulations. If your business requires adequate coverage and fails to do so, you can be fined up to $1,000 for each employee.

In other instances, Kentucky can issue your business a stop-work order for failure to acquire adequate coverage. This order prohibits you from continuing to operate your business until you adhere to workers comp laws in Kentucky.

In addition, failing to comply with the law could result in serious legal repercussions. An employee may sue you, and you must cover any medical costs or missed income. The costs of lawsuits and settlements can financially cripple your business. Kentucky state can also impose various civil penalties on all uninsured employers.

What is Kentucky Assigned Risk Workers Compensation?

The assigned risk workers' compensation is insurance coverage designed for businesses without insurance coverage through private insurance carriers. It is facilitated by the Kentucky Employers' Mutual Insurance (KEMI).

To obtain this coverage, you must complete and apply to KEMI, which reviews it and checks your eligibility. Once you qualify, you will be assigned to an insurance carrier participating in the Assigned Risk Program. However, this is just a temporary solution, and you must seek coverage from insurance providers.

Kentucky Workers Compensation Insurance Cost

The average Kentucky workers compensation insurance cost is $53 per month or $636 per year. When you acquire a workers' compensation insurance policy, you must review costs from several providers. 

The premiums a carrier quotes will vary depending on the number of employees and the safety measures you have incorporated to ensure a safe working environment. Kentucky workers comp rates from the best companies in the market are broken down below:

Factors That Determine Kentucky Workers Compensation Cost

Here are some factors that determine Kentucky worker's compensation insurance cost:

• Industry classification: The type of work affects how an industry is put into groups. Different industries have varying levels of risk associated with workplace injuries. More money is spent on workers' compensation in construction and manufacturing than in office management. The type of business affects insurance rates.

• Payroll: Costs for workers' compensation depend on how many people are hired. The insurance premium is typically calculated as a percentage of the total payroll. Workers' compensation claims increase when more people are hired, increasing costs.

• Claims history: The number of cases for workers' compensation affects how much insurance costs. Frequent claims or major injuries may raise premiums. Insurance companies can guess how many claims they will get in the future based on a company's past claims.

• Experience modification Factor (EMR): The EMR changes an employer's workers' compensation rate based on past claims. If an employer has more claims than others in their field, their EMR will be higher than 1.0. Costs go down when EMRs are low, and rates go up when they are high.

• Safety programs and risk management: Workplace injuries and workers' compensation claims go down with safety measures and risk management. Businesses that take many safety steps, like training their employees often, following safety rules, and reporting claims quickly, often get insurance discounts and other perks. Employers can lower their costs for workers' compensation by coming up with good safety practices.