The Kentucky Workers’ Compensation Act was enacted in 1916. Workers’ Compensation is a safety net for employees, providing medical care and monetary benefits when an employee cannot work due to a work-related injury or occupational disease. The system is the result of a mutually beneficial compromise that provides benefits for employees while limiting an employer’s liability for work-place injuries and diseases. This compromise can be found in Chapter 342 of the Kentucky Revised Statutes, commonly called the Workers’ Compensation Act.
The Department of Workers’ Claims was created to administer claims arising from work-related injuries and occupational diseases, and to ensure compliance with the Act. The head of the Department is a Commissioner appointed by the Governor and confirmed by the Senate.
Injured employees are automatically entitled to the benefits provided by the Act; as such, most claims are resolved through a settlement agreement and approved by an administrative law judge. However, sometimes disputes arise between employees and employers over whether the injury or disease was incurred while working, the severity of the injury, or the length of time for which benefits are owed. When this occurs, the dispute must be decided by an Administrative Law Judge (ALJ). To initiate this process, the employee or employer files an Application for Resolution of a Claim form with the Department. Employees and employers represented by an attorney must file this form electronically through the Department’s Litigation Management System (“LMS”). Employees representing themselves may file the form electronically through LMS or use a paper form.
The Department will issue an order assigning the case to an ALJ and schedule a Benefit Review Conference (“BRC”). A BRC is an informal proceeding held before the ALJ; it gives the parties the opportunity to discuss the case, allows the ALJ the opportunity to rule on any procedural disputes and set a date for the formal hearing. At the formal hearing, the parties present evidence and testimony to be considered by the ALJ when making a decision. The hearing will be recorded by a court reporter.
The ALJ will render a decision in the case within sixty days after the hearing. Any party who disagrees with the ALJ’s decision may file an appeal to the Workers’ Compensation Board (“WCB”). The WCB will review the ALJ’s decision and determine whether the ALJ erred in applying the law to the facts of the case. A party cannot submit new or additional evidence to the WCB. The ALJ’s factual findings will not be changed unless there is no evidence to support the ALJ’s decision. Any party who disagrees with the decision of the WCB may appeal to the Kentucky Court of Appeals and then to the Supreme Court of Kentucky.
Workers’ compensation clearly provides benefits to employees who experience a work-related injury or occupational disease but does it also provide a benefit to employers? The answer is, “yes.” As part of the “Grand Bargain” between employees and employers, employees automatically receive medical treatment without cost to them and some income replacement without having to prove their employer was responsible for the injury or disease. In exchange, employees gave up the right to sue their employers in court for damages normally available under common law. This limits the employer’s costs for work-related injuries to the cost of its annual workers’ compensation insurance premium.
If the work-related injury results in the employee’s death, a lump sum payment is made to the employee’s estate, from which burial expenses are to be paid. Income benefits are also extended to the surviving spouse and dependents. The amount of the lump sum changes annually. If the employee dies from causes unrelated to the work injury but during the period when the employee was entitled to benefits, then the surviving spouse and minor children are entitled to a portion of the benefits due the employee.
Goals and Objectives of the Department of Workers’ Claims
- Provide information concerning benefits
- Assist with informal resolution of disputes
- Maintain records of injuries and program costs
- Process and adjudicate claims
- Enforce laws
- Regulate self-insured employers
- Implement strategies to improve carrier performance
- Render program assessment to policy makers