CHAPTER 33
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CHAPTER 33
( HB 401 )
AN ACT relating to workers' compensation.
Be it enacted by the General Assembly of the Commonwealth of Kentucky:
Section 1. KRS 342.0011 is amended to read as follows:
As used in this chapter, unless the context otherwise requires:
(1) "Injury" means any work-related traumatic event or series of traumatic events, including cumulative trauma,
arising out of and in the course of employment which is the proximate cause producing a harmful change in
the human organism evidenced by objective medical findings. "Injury" does not include the effects of the
natural aging process, and does not include any communicable disease unless the risk of contracting the
disease is increased by the nature of the employment. "Injury" when used generally, unless the context
indicates otherwise, shall include an occupational disease and damage to a prosthetic appliance, but shall not
include a psychological, psychiatric, or stress-related change in the human organism, unless it is a direct result
of a physical injury;
(2) "Occupational disease" means a disease arising out of and in the course of the employment;
(3) An occupational disease as defined in this chapter shall be deemed to arise out of the employment if there is
apparent to the rational mind, upon consideration of all the circumstances, a causal connection between the
conditions under which the work is performed and the occupational disease, and which can be seen to have
followed as a natural incident to the work as a result of the exposure occasioned by the nature of the
employment and which can be fairly traced to the employment as the proximate cause. The occupational
disease shall be incidental to the character of the business and not independent of the relationship of employer
and employee. An occupational disease need not have been foreseen or expected but, after its contraction, it
must appear to be related to a risk connected with the employment and to have flowed from that source as a
rational consequence;
(4) "Injurious exposure" shall mean that exposure to occupational hazard which would, independently of any other
cause whatsoever, produce or cause the disease for which the claim is made;
(5) "Death" means death resulting from an injury or occupational disease;
(6) "Carrier" means any insurer, or legal representative thereof, authorized to insure the liability of employers
under this chapter and includes a self-insurer;
(7) "Self-insurer" is an employer who has been authorized under the provisions of this chapter to carry his own
liability on his employees covered by this chapter;
(8) "Department" means the Department of Workers' Claims in the Education and Labor Cabinet;
(9) "Commissioner" means the commissioner of the Department of Workers' Claims under the direction and
supervision of the secretary of the Education and Labor Cabinet;
(10) "Board" means the Workers' Compensation Board;
(11) (a) "Temporary total disability" means the condition of an employee who has not reached maximum
medical improvement from an injury and has not reached a level of improvement that would permit a
return to employment;
(b) "Permanent partial disability" means the condition of an employee who, due to an injury, has a
permanent disability rating but retains the ability to work; and
(c) "Permanent total disability" means the condition of an employee who, due to an injury, has a permanent
disability rating and has a complete and permanent inability to perform any type of work as a result of
an injury, except that total disability shall be irrebuttably presumed to exist for an injury that results in:
1. Total and permanent loss of sight in both eyes;
2. Loss of both feet at or above the ankle;
3. Loss of both hands at or above the wrist; ACTS OF THE GENERAL ASSEMBLY 2
4. Loss of one (1) foot at or above the ankle and the loss of one (1) hand at or above the wrist;
5. Permanent and complete paralysis of both arms, both legs, or one (1) arm and one (1) leg;
6. Incurable insanity or imbecility; or
7. Total loss of hearing;
(12) "Income benefits" means payments made under the provisions of this chapter to the disabled worker or his
dependents in case of death, excluding medical and related benefits;
(13) "Medical and related benefits" means payments made for medical, hospital, burial, and other services as
provided in this chapter, other than income benefits;
(14) "Compensation" means all payments made under the provisions of this chapter representing the sum of income
benefits and medical and related benefits;
(15) "Medical services" means medical, surgical, dental, hospital, nursing, and medical rehabilitation services,
medicines, and fittings for artificial or prosthetic devices;
(16) "Person" means any individual, partnership, limited partnership, limited liability company, firm, association,
trust, joint venture, corporation, or legal representative thereof;
(17) "Wages" means, in addition to money payments for services rendered, the reasonable value of board, rent,
housing, lodging, fuel, or similar advantages received from the employer, and gratuities received in the course
of employment from persons other than the employer as evidenced by the employee's federal and state tax
returns;
(18) "Agriculture" means the operation of farm premises, including the planting, cultivation, producing, growing,
harvesting, and preparation for market of agricultural or horticultural commodities thereon, the raising of
livestock for food products and for racing purposes, and poultry thereon, and any work performed as an
incident to or in conjunction with the farm operations, including the sale of produce at on-site markets and the
processing of produce for sale at on-site markets. It shall not include the commercial processing, packing,
drying, storing, or canning of such commodities for market, or making cheese or butter or other dairy products
for market;
(19) "Beneficiary" means any person who is entitled to income benefits or medical and related benefits under this
chapter;
(20) "United States," when used in a geographic sense, means the several states, the District of Columbia, the
Commonwealth of Puerto Rico, the Canal Zone, and the territories of the United States;
(21) "Alien" means a person who is not a citizen, a national, or a resident of the United States or Canada. Any
person not a citizen or national of the United States who relinquishes or is about to relinquish his residence in
the United States shall be regarded as an alien;
(22) "Insurance carrier" means every insurance carrier or insurance company authorized to do business in the
Commonwealth writing workers' compensation insurance coverage and includes the Kentucky Employers
Mutual Insurance Authority and every self-insured group operating under the provisions of this chapter;
(23) (a) "Severance or processing of coal" means all activities performed in the Commonwealth at underground,
auger, and surface mining sites; all activities performed at tipple or processing plants that clean, break,
size, or treat coal; and all activities performed at coal loading facilities for trucks, railroads, and barges.
Severance or processing of coal shall not include acts performed by a final consumer if the acts are
performed at the site of final consumption.
(b) "Engaged in severance or processing of coal" shall include all individuals, partnerships, limited
partnerships, limited liability companies, corporations, joint ventures, associations, or any other
business entity in the Commonwealth which has employees on its payroll who perform any of the acts
stated in paragraph (a) of this subsection, regardless of whether the acts are performed as owner of the
coal or on a contract or fee basis for the actual owner of the coal. A business entity engaged in the
severance or processing of coal, including but not limited to administrative or selling functions, shall be
considered wholly engaged in the severance or processing of coal for the purpose of this chapter.
However, a business entity which is engaged in a separate business activity not related to coal, for
which a separate premium charge is not made, shall be deemed to be engaged in the severance or
processing of coal only to the extent that the number of employees engaged in the severance or
processing of coal bears to the total number of employees. Any employee who is involved in the CHAPTER 33
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business of severing or processing of coal and business activities not related to coal shall be prorated
based on the time involved in severance or processing of coal bears to his total time;
(24) "Premium" for every self-insured group means any and all assessments levied on its members by such group
or contributed to it by the members thereof. For special fund assessment purposes, "premium" also includes
any and all membership dues, fees, or other payments by members of the group to associations or other entities
used for underwriting, claims handling, loss control, premium audit, actuarial, or other services associated with
the maintenance or operation of the self-insurance group;
(25) (a) "Premiums received" for policies effective on or after January 1, 1994, for insurance companies means
direct written premiums as reported in the annual statement to the Department of Insurance by
insurance companies, except that "premiums received" includes premiums charged off or deferred, and,
on insurance policies or other evidence of coverage with provisions for deductibles, the calculated cost
for coverage, including experience modification and premium surcharge or discount, prior to any
reduction for deductibles. The rates, factors, and methods used to calculate the cost for coverage under
this paragraph for insurance policies or other evidence of coverage with provisions for deductibles shall
be the same rates, factors, and methods normally used by the insurance company in Kentucky to
calculate the cost for coverage for insurance policies or other evidence of coverage without provisions
for deductibles, except that, for insurance policies or other evidence of coverage with provisions for
deductibles effective on or after January 1, 1995, the calculated cost for coverage shall not include any
schedule rating modification, debits, or credits. For policies with provisions for deductibles with
effective dates on or after January 1, 1995, assessments shall be imposed on premiums received as
calculated by the deductible program adjustment. The cost for coverage calculated under this paragraph
by insurance companies that issue only deductible insurance policies in Kentucky shall be actuarially
adequate to cover the entire liability of the employer for compensation under this chapter, including all
expenses and allowances normally used to calculate the cost for coverage. For policies with provisions
for deductibles with effective dates of May 6, 1993, through December 31, 1993, for which the
insurance company did not report premiums and remit special fund assessments based on the calculated
cost for coverage prior to the reduction for deductibles, "premiums received" includes the initial
premium plus any reimbursements invoiced for losses, expenses, and fees charged under the
deductibles. The special fund assessment rates in effect for reimbursements invoiced for losses,
expenses, or fees charged under the deductibles shall be those percentages in effect on the effective date
of the insurance policy. For policies covering covered employees having a co-employment relationship
with a professional employer organization and a client as defined in KRS Chapter 336, "premiums
received" means premiums calculated using the experience modification factor of each client as defined
in KRS Chapter 336 for each covered employee for that portion of the payroll pertaining to the covered
employee.
(b) "Direct written premium" for insurance companies means the gross premium written less return
premiums and premiums on policies not taken but including policy and membership fees.
(c) "Premium," for policies effective on or after January 1, 1994, for insurance companies means all
consideration, whether designated as premium or otherwise, for workers' compensation insurance paid
to an insurance company or its representative, including, on insurance policies with provisions for
deductibles, the calculated cost for coverage, including experience modification and premium surcharge
or discount, prior to any reduction for deductibles. The rates, factors, and methods used to calculate the
cost for coverage under this paragraph for insurance policies or other evidence of coverage with
provisions for deductibles shall be the same rates, factors, and methods normally used by the insurance
company in Kentucky to calculate the cost for coverage for insurance policies or other evidence of
coverage without provisions for deductibles, except that, for insurance policies or other evidence of
coverage with provisions for deductibles effective on or after January 1, 1995, the calculated cost for
coverage shall not include any schedule rating modifications, debits, or credits. For policies with
provisions for deductibles with effective dates on or after January 1, 1995, assessments shall be
imposed as calculated by the deductible program adjustment. The cost for coverage calculated under
this paragraph by insurance companies that issue only deductible insurance policies in Kentucky shall
be actuarially adequate to cover the entire liability of the employer for compensation under this chapter,
including all expenses and allowances normally used to calculate the cost for coverage. For policies
with provisions for deductibles with effective dates of May 6, 1993, through December 31, 1993, for
which the insurance company did not report premiums and remit special fund assessments based on the
calculated cost for coverage prior to the reduction for deductibles, "premium" includes the initial ACTS OF THE GENERAL ASSEMBLY 4
consideration plus any reimbursements invoiced for losses, expenses, or fees charged under the
deductibles.
(d) "Return premiums" for insurance companies means amounts returned to insureds due to endorsements,
retrospective adjustments, cancellations, dividends, or errors.
(e) "Deductible program adjustment" means calculating premium and premiums received on a gross basis
without regard to the following:
1. Schedule rating modifications, debits, or credits;
2. Deductible credits; or
3. Modifications to the cost of coverage from inception through and including any audit that are
based on negotiated retrospective rating arrangements, including but not limited to large risk
alternative rating options;
(26) "Insurance policy" for an insurance company or self-insured group means the term of insurance coverage
commencing from the date coverage is extended, whether a new policy or a renewal, through its expiration,
not to exceed the anniversary date of the renewal for the following year;
(27) "Self-insurance year" for a self-insured group means the annual period of certification of the group created
pursuant to KRS 342.350(4) and 304.50-010;
(28) "Premium" for each employer carrying his own risk pursuant to KRS 342.340(1) shall be the projected value
of the employer's workers' compensation claims for the next calendar year as calculated by the commissioner
using generally-accepted actuarial methods as follows:
(a) The base period shall be the earliest three (3) calendar years of the five (5) calendar years immediately
preceding the calendar year for which the calculation is made. The commissioner shall identify each
claim of the employer which has an injury date or date of last injurious exposure to the cause of an
occupational disease during each one (1) of the three (3) calendar years to be used as the base, and shall
assign a value to each claim. The value shall be the total of the indemnity benefits paid to date and
projected to be paid, adjusted to current benefit levels, plus the medical benefits paid to date and
projected to be paid for the life of the claim, plus the cost of medical and vocational rehabilitation paid
to date and projected to be paid. Adjustment to current benefit levels shall be done by multiplying the
weekly indemnity benefit for each claim by the number obtained by dividing the statewide average
weekly wage which will be in effect for the year for which the premium is being calculated by the
statewide average weekly wage in effect during the year in which the injury or date of the last exposure
occurred. The total value of the claims using the adjusted weekly benefit shall then be calculated by the
commissioner. Values for claims in which awards have been made or settlements reached because of
findings of permanent partial or permanent total disability shall be calculated using the mortality and
interest discount assumptions used in the latest available statistical plan of the advisory rating
organization defined in Subtitle 13 of KRS Chapter 304. The sum of all calculated values shall be
computed for all claims in the base period;
(b) The commissioner shall obtain the annual payroll for each of the three (3) years in the base period for
each employer carrying his own risk from records of the department and from the records of the
Department of Workforce Development, Education and Labor Cabinet. The commissioner shall
multiply each of the three (3) years of payroll by the number obtained by dividing the statewide average
weekly wage which will be in effect for the year in which the premium is being calculated by the
statewide average weekly wage in effect in each of the years of the base period;
(c) The commissioner shall divide the total of the adjusted claim values for the three (3) year base period
by the total adjusted payroll for the same three (3) year period. The value so calculated shall be
multiplied by 1.25 and shall then be multiplied by the employer's most recent annualized payroll,
calculated using records of the department and the Department of Workforce Development data which
shall be made available for this purpose on a quarterly basis as reported, to obtain the premium for the
next calendar year for assessment purposes under KRS 342.122;
(d) For November 1, 1987, through December 31, 1988, premium for each employer carrying its own risk
shall be an amount calculated by the board pursuant to the provisions contained in this subsection and
such premium shall be provided to each employer carrying its own risk and to the funding commission
on or before January 1, 1988. Thereafter, the calculations set forth in this subsection shall be performed
annually, at the time each employer applies or renews its application for certification to carry its own CHAPTER 33
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risk for the next twelve (12) month period and submits payroll and other data in support of the
application. The employer and the funding commission shall be notified at the time of the certification
or recertification of the premium calculated by the commissioner, which shall form the employer's basis
for assessments pursuant to KRS 342.122 for the calendar year beginning on January 1 following the
date of certification or recertification;
(e) If an employer having fewer than five (5) years of doing business in this state applies to carry its own
risk and is so certified, its premium for the purposes of KRS 342.122 shall be based on the lesser
number of years of experience as may be available including the two (2) most recent years if necessary
to create a three (3) year base period. If the employer has less than two (2) years of operation in this
state available for the premium calculation, then its premium shall be the greater of the value obtained
by the calculation called for in this subsection or the amount of security required by the commissioner
pursuant to KRS 342.340(1);
(f) If an employer is certified to carry its own risk after having previously insured the risk, its premium
shall be calculated using values obtained from claims incurred while insured for as many of the years of
the base period as may be necessary to create a full three (3) year base. After the employer is certified to
carry its own risk and has paid all amounts due for assessments upon premiums paid while insured, the
employer shall be assessed only upon the premium calculated under this subsection;
(g) "Premium" for each employer defined in KRS 342.630(2) shall be calculated as set forth in this
subsection; and
(h) Notwithstanding any other provision of this subsection, the premium of any employer authorized to
carry its own risk for purposes of assessments due under this chapter shall be no less than thirty cents
($0.30) per one hundred dollars ($100) of the employer's most recent annualized payroll for employees
covered by this chapter;
(29) "SIC code" as used in this chapter means the Standard Industrial Classification Code contained in the latest
edition of the Standard Industrial Classification Manual published by the Federal Office of Management and
Budget;
(30) "Investment interest" means any pecuniary or beneficial interest in a provider of medical services or treatment
under this chapter, other than a provider in which that pecuniary or investment interest is obtained on terms
equally available to the public through trading on a registered national securities exchange, such as the New
York Stock Exchange or the American Stock Exchange, or on the National Association of Securities Dealers
Automated Quotation System;
(31) "Managed health care system" means a health care system that employs gatekeeper providers, performs
utilization review, and does medical bill audits;
(32) "Physician" means physicians and surgeons, psychologists, optometrists, dentists, podiatrists, and osteopathic
and chiropractic practitioners acting within the scope of the license or other credentials required by his or her
specialty of practice in the United States jurisdiction in which he or she is authorized to practice[their
license issued by the Commonwealth];
(33) "Objective medical findings" means information gained through direct observation and testing of the patient
applying objective or standardized methods;
(34) "Work" means providing services to another in return for remuneration on a regular and sustained basis in a
competitive economy;
(35) "Permanent impairment rating" means percentage of whole body impairment caused by the injury or
occupational disease as determined by the "Guides to the Evaluation of Permanent Impairment";
(36) "Permanent disability rating" means the permanent impairment rating selected by an administrative law judge
times the factor set forth in the table that appears at KRS 342.730(1)(b); and
(37) "Guides to the Evaluation of Permanent Impairment" means, except as provided in KRS 342.262:
(a) The fifth edition published by the American Medical Association; and
(b) For psychological impairments, Chapter 12 of the second edition published by the American Medical
Association.
Section 2. KRS 342.033 is amended to read as follows: ACTS OF THE GENERAL ASSEMBLY 6
(1) As used in this section, "physician" means physicians and surgeons, psychologists, optometrists, dentists,
podiatrists, and osteopathic and chiropractic practitioners acting within the scope of the license or other
credentials required by his or her specialty of practice in the United States jurisdiction in which he or she is
authorized to practice, and any retired physician previously authorized to practice in the Commonwealth of
Kentucky, who surrendered his or her license while in good standing with their respective licensing board
and was not subject to an ongoing investigation for improper practices.
(2) In a claim for benefits, no party may introduce direct testimony from more than two (2) physicians without
prior consent from the administrative law judge. The motion requesting additional testimony shall clearly
demonstrate the need for such additional testimony. A party may introduce direct testimony from a physician
through a written medical report. The report shall become a part of the evidentiary record, subject to the right
of an adverse party to object to the admissibility of the report and to cross-examine the reporting physician.
The commissioner shall promulgate administrative regulations prescribing the format and content of written
medical reports.
Section 3. KRS 342.140 is amended to read as follows:
The average weekly wage of the injured employee at the time of the injury or last injurious exposure shall be
determined as follows:
(1) If at the time of the injury which resulted in death or disability or the last date of injurious exposure preceding
death or disability from an occupational disease:
(a) The wages were fixed by the week, the amount so fixed shall be the average weekly wage;
(b) The wages were fixed by the month, the average weekly wage shall be the monthly wage so fixed
multiplied by twelve (12) and divided by fifty-two (52);
(c) The wages were fixed by the year, the average weekly wage shall be the yearly wage so fixed divided
by fifty-two (52);
(d) The wages were fixed by the day, hour, or by the output of the employee, the average weekly wage
shall be the wage most favorable to the employee computed by dividing by thirteen (13) the wages (not
including overtime or premium pay) of said employee earned in the employ of the employer in the first,
second, third, or fourth period of thirteen (13) consecutive calendar weeks in the fifty-two (52) weeks
immediately preceding the injury;
(e) The wages were determined by the day, hour, or by the output of the employee, and the employee
received unemployment benefits pursuant to KRS Chapter 341 during the first, second, third, or
fourth period of thirteen (13) consecutive calendar weeks in the fifty-two (52) weeks immediately
preceding the injury, the unemployment benefits received shall be added to the wages earned during
the thirteen (13) week period and divided by thirteen (13), the average weekly wage shall be the result
most favorable to the employee;
(f) The employee had been in the employ of the employer less than thirteen (13) calendar weeks
immediately preceding the injury, his or her average weekly wage shall be computed under paragraph
(d), taking the wages (not including overtime or premium pay) for that purpose to be the amount he or
she would have earned had he or she been so employed by the employer the full thirteen (13) calendar
weeks immediately preceding the injury and had worked, when work was available to other employees
in a similar occupation; and
(g)[(f)] The hourly wage has not been fixed or cannot be ascertained, the wage for the purpose of
calculating compensation shall be taken to be the usual wage for similar services where the services are
rendered by paid employees.
(2) In occupations which are exclusively seasonal and therefore cannot be carried on throughout the year, the
average weekly wage shall be taken to be one-fiftieth (1/50) of the total wages which the employee has earned
from all occupations during the twelve (12) calendar months immediately preceding the injury.
(3) In the case of volunteer firemen, police, and emergency management agency members or trainees, the income
benefits shall be based on the average weekly wage in their regular employment.
(4) If the employee was a minor, apprentice, or trainee when injured, and it is established that under normal
conditions his or her wages should be expected to increase during the period of disability, that fact may be
considered in computing his or her average weekly wage. CHAPTER 33
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(5) When the employee is working under concurrent contracts with two (2) or more employers and the defendant
employer has knowledge of the employment prior to the injury, his or her wages from all the employers shall
be considered as if earned from the employer liable for compensation.
(6) The term "wages" as used in this section and KRS 342.143 means, in addition to money payments for services
rendered, the reasonable value of board, rent, housing, lodging, and fuel or similar advantage received from
the employer, and gratuities received in the course of employment from others than the employer to the extent
the gratuities are reported for income tax purposes.
(7) The commissioner shall, from time to time, based upon the best available information, determine by
administrative regulation industries which ordinarily do not have a full working day for five (5) days in every
week. In those industries, compensation shall be computed at the average weekly wage earned by the
employee at the time of injury reckoning wages as earned while working full time. "At full time" as used in
this subsection means a full working day for five (5) working days in every week regardless of whether the
injured employee actually worked all or part of the time.
Signed by Governor April 4, 2024.