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AN ACT relating to workers' compensation for educators. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 342 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section, "educator" means any person for whom certification is 5
required as a basis of employment in a public school in the Commonwealth and 6
any person teaching in a private school in the Commonwealth. 7
(2) If an educator suffers a psychological, psychiatric, or stress-related change in the 8
human organism that is not a direct result of a physical injury but is the result of 9
a work-related event or cumulative work-related stress, then that psychological, 10
psychiatric, or stress-related change shall be an injury arising out of employment 11
if it is demonstrated by the preponderance of the evidence that: 12
(a) The work-related event or cumulative work-related stress was extraordinary 13
and unusual in comparison to pressures and tensions experienced by the 14
average educator; and 15
(b) The work-related event or cumulative work-related stress, and not some 16
other event, was the proximate cause of the psychological, psychiatric, or 17
stress-related change in the human organism. 18
(3) A psychological, psychiatric, or stress-related change in the human organism 19
shall not be considered a work-related injury arising out of the course of 20
employment if it results from any disciplinary action, work evaluation, job 21
transfer, layoff, demotion, termination, or similar action taken in good faith by 22
the employer. 23
(4) (a) If an educator is diagnosed with post-traumatic stress disorder by a 24
qualified mental health professional within three (3) years of the last active 25
date of employment as an educator, then there shall be a rebuttable 26
presumption that the post-traumatic stress disorder is an injury covered by 27 UNOFFICIAL COPY 24 RS BR 1396
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this chapter, and the employer with whom that educator was last injuriously 1
exposed to the harmful stress shall be exclusively liable for benefits. 2
(b) A presumption of a work-related injury under paragraph (a) of this 3
subsection may be overcome by the preponderance of the evidence that the 4
post-traumatic stress disorder was caused by an incident outside the scope 5
of the educator's employment. 6
Section 2. KRS 342.0011 is amended to read as follows: 7
As used in this chapter, unless the context otherwise requires: 8
(1) (a) "Injury" means any work-related traumatic event or series of traumatic events, 9
including cumulative trauma, arising out of and in the course of employment 10
which is the proximate cause producing a harmful change in the human 11
organism evidenced by objective medical findings. "Injury" does not include 12
the effects of the natural aging process, and does not include any 13
communicable disease unless the risk of contracting the disease is increased 14
by the nature of the employment. "Injury" when used generally, unless the 15
context indicates otherwise, shall include an occupational disease and damage 16
to a prosthetic appliance, but shall not include a psychological, psychiatric, or 17
stress-related change in the human organism, unless it is a direct result of a 18
physical injury. 19
(b) Notwithstanding paragraph (a) of this subsection, "injury" for an educator, 20
as defined in Section 1 of this Act, may include a psychological, psychiatric, 21
or stress-related change in the human organism that is not a direct result of 22
a physical injury, as specified in subsection (2) of Section 1 of this Act; 23
(2) "Occupational disease" means a disease arising out of and in the course of the 24
employment; 25
(3) An occupational disease as defined in this chapter shall be deemed to arise out of 26
the employment if there is apparent to the rational mind, upon consideration of all 27 UNOFFICIAL COPY 24 RS BR 1396
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the circumstances, a causal connection between the conditions under which the 1
work is performed and the occupational disease, and which can be seen to have 2
followed as a natural incident to the work as a result of the exposure occasioned by 3
the nature of the employment and which can be fairly traced to the employment as 4
the proximate cause. The occupational disease shall be incidental to the character of 5
the business and not independent of the relationship of employer and employee. An 6
occupational disease need not have been foreseen or expected but, after its 7
contraction, it must appear to be related to a risk connected with the employment 8
and to have flowed from that source as a rational consequence; 9
(4) "Injurious exposure" shall mean that exposure to occupational hazard which would, 10
independently of any other cause whatsoever, produce or cause the disease for 11
which the claim is made; 12
(5) "Death" means death resulting from an injury or occupational disease; 13
(6) "Carrier" means any insurer, or legal representative thereof, authorized to insure the 14
liability of employers under this chapter and includes a self-insurer; 15
(7) "Self-insurer" is an employer who has been authorized under the provisions of this 16
chapter to carry his own liability on his employees covered by this chapter; 17
(8) "Department" means the Department of Workers' Claims in the Education and 18
Labor Cabinet; 19
(9) "Commissioner" means the commissioner of the Department of Workers' Claims 20
under the direction and supervision of the secretary of the Education and Labor 21
Cabinet; 22
(10) "Board" means the Workers' Compensation Board; 23
(11) (a) "Temporary total disability" means the condition of an employee who has not 24
reached maximum medical improvement from an injury and has not reached a 25
level of improvement that would permit a return to employment; 26
(b) "Permanent partial disability" means the condition of an employee who, due 27 UNOFFICIAL COPY 24 RS BR 1396
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to an injury, has a permanent disability rating but retains the ability to work; 1
and 2
(c) "Permanent total disability" means the condition of an employee who, due to 3
an injury, has a permanent disability rating and has a complete and permanent 4
inability to perform any type of work as a result of an injury, except that total 5
disability shall be irrebuttably presumed to exist for an injury that results in: 6
1. Total and permanent loss of sight in both eyes; 7
2. Loss of both feet at or above the ankle; 8
3. Loss of both hands at or above the wrist; 9
4. Loss of one (1) foot at or above the ankle and the loss of one (1) hand at 10
or above the wrist; 11
5. Permanent and complete paralysis of both arms, both legs, or one (1) 12
arm and one (1) leg; 13
6. Incurable insanity or imbecility; or 14
7. Total loss of hearing; 15
(12) "Income benefits" means payments made under the provisions of this chapter to the 16
disabled worker or his dependents in case of death, excluding medical and related 17
benefits; 18
(13) "Medical and related benefits" means payments made for medical, hospital, burial, 19
and other services as provided in this chapter, other than income benefits; 20
(14) "Compensation" means all payments made under the provisions of this chapter 21
representing the sum of income benefits and medical and related benefits; 22
(15) "Medical services" means medical, surgical, dental, hospital, nursing, and medical 23
rehabilitation services, medicines, and fittings for artificial or prosthetic devices; 24
(16) "Person" means any individual, partnership, limited partnership, limited liability 25
company, firm, association, trust, joint venture, corporation, or legal representative 26
thereof; 27 UNOFFICIAL COPY 24 RS BR 1396
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(17) "Wages" means, in addition to money payments for services rendered, the 1
reasonable value of board, rent, housing, lodging, fuel, or similar advantages 2
received from the employer, and gratuities received in the course of employment 3
from persons other than the employer as evidenced by the employee's federal and 4
state tax returns; 5
(18) "Agriculture" means the operation of farm premises, including the planting, 6
cultivation, producing, growing, harvesting, and preparation for market of 7
agricultural or horticultural commodities thereon, the raising of livestock for food 8
products and for racing purposes, and poultry thereon, and any work performed as 9
an incident to or in conjunction with the farm operations, including the sale of 10
produce at on-site markets and the processing of produce for sale at on-site markets. 11
It shall not include the commercial processing, packing, drying, storing, or canning 12
of such commodities for market, or making cheese or butter or other dairy products 13
for market; 14
(19) "Beneficiary" means any person who is entitled to income benefits or medical and 15
related benefits under this chapter; 16
(20) "United States," when used in a geographic sense, means the several states, the 17
District of Columbia, the Commonwealth of Puerto Rico, the Canal Zone, and the 18
territories of the United States; 19
(21) "Alien" means a person who is not a citizen, a national, or a resident of the United 20
States or Canada. Any person not a citizen or national of the United States who 21
relinquishes or is about to relinquish his residence in the United States shall be 22
regarded as an alien; 23
(22) "Insurance carrier" means every insurance carrier or insurance company authorized 24
to do business in the Commonwealth writing workers' compensation insurance 25
coverage and includes the Kentucky Employers Mutual Insurance Authority and 26
every self-insured group operating under the provisions of this chapter; 27 UNOFFICIAL COPY 24 RS BR 1396
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(23) (a) "Severance or processing of coal" means all activities performed in the 1
Commonwealth at underground, auger, and surface mining sites; all activities 2
performed at tipple or processing plants that clean, break, size, or treat coal; 3
and all activities performed at coal loading facilities for trucks, railroads, and 4
barges. Severance or processing of coal shall not include acts performed by a 5
final consumer if the acts are performed at the site of final consumption. 6
(b) "Engaged in severance or processing of coal" shall include all individuals, 7
partnerships, limited partnerships, limited liability companies, corporations, 8
joint ventures, associations, or any other business entity in the Commonwealth 9
which has employees on its payroll who perform any of the acts stated in 10
paragraph (a) of this subsection, regardless of whether the acts are performed 11
as owner of the coal or on a contract or fee basis for the actual owner of the 12
coal. A business entity engaged in the severance or processing of coal, 13
including but not limited to administrative or selling functions, shall be 14
considered wholly engaged in the severance or processing of coal for the 15
purpose of this chapter. However, a business entity which is engaged in a 16
separate business activity not related to coal, for which a separate premium 17
charge is not made, shall be deemed to be engaged in the severance or 18
processing of coal only to the extent that the number of employees engaged in 19
the severance or processing of coal bears to the total number of employees. 20
Any employee who is involved in the business of severing or processing of 21
coal and business activities not related to coal shall be prorated based on the 22
time involved in severance or processing of coal bears to his total time; 23
(24) "Premium" for every self-insured group means any and all assessments levied on its 24
members by such group or contributed to it by the members thereof. For special 25
fund assessment purposes, "premium" also includes any and all membership dues, 26
fees, or other payments by members of the group to associations or other entities 27 UNOFFICIAL COPY 24 RS BR 1396
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used for underwriting, claims handling, loss control, premium audit, actuarial, or 1
other services associated with the maintenance or operation of the self-insurance 2
group; 3
(25) (a) "Premiums received" for policies effective on or after January 1, 1994, for 4
insurance companies means direct written premiums as reported in the annual 5
statement to the Department of Insurance by insurance companies, except that 6
"premiums received" includes premiums charged off or deferred, and, on 7
insurance policies or other evidence of coverage with provisions for 8
deductibles, the calculated cost for coverage, including experience 9
modification and premium surcharge or discount, prior to any reduction for 10
deductibles. The rates, factors, and methods used to calculate the cost for 11
coverage under this paragraph for insurance policies or other evidence of 12
coverage with provisions for deductibles shall be the same rates, factors, and 13
methods normally used by the insurance company in Kentucky to calculate 14
the cost for coverage for insurance policies or other evidence of coverage 15
without provisions for deductibles, except that, for insurance policies or other 16
evidence of coverage with provisions for deductibles effective on or after 17
January 1, 1995, the calculated cost for coverage shall not include any 18
schedule rating modification, debits, or credits. For policies with provisions 19
for deductibles with effective dates on or after January 1, 1995, assessments 20
shall be imposed on premiums received as calculated by the deductible 21
program adjustment. The cost for coverage calculated under this paragraph by 22
insurance companies that issue only deductible insurance policies in Kentucky 23
shall be actuarially adequate to cover the entire liability of the employer for 24
compensation under this chapter, including all expenses and allowances 25
normally used to calculate the cost for coverage. For policies with provisions 26
for deductibles with effective dates of May 6, 1993, through December 31, 27 UNOFFICIAL COPY 24 RS BR 1396
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1993, for which the insurance company did not report premiums and remit 1
special fund assessments based on the calculated cost for coverage prior to the 2
reduction for deductibles, "premiums received" includes the initial premium 3
plus any reimbursements invoiced for losses, expenses, and fees charged 4
under the deductibles. The special fund assessment rates in effect for 5
reimbursements invoiced for losses, expenses, or fees charged under the 6
deductibles shall be those percentages in effect on the effective date of the 7
insurance policy. For policies covering covered employees having a co-8
employment relationship with a professional employer organization and a 9
client as defined in KRS Chapter 336, "premiums received" means premiums 10
calculated using the experience modification factor of each client as defined 11
in KRS Chapter 336 for each covered employee for that portion of the payroll 12
pertaining to the covered employee. 13
(b) "Direct written premium" for insurance companies means the gross premium 14
written less return premiums and premiums on policies not taken but 15
including policy and membership fees. 16
(c) "Premium," for policies effective on or after January 1, 1994, for insurance 17
companies means all consideration, whether designated as premium or 18
otherwise, for workers' compensation insurance paid to an insurance company 19
or its representative, including, on insurance policies with provisions for 20
deductibles, the calculated cost for coverage, including experience 21
modification and premium surcharge or discount, prior to any reduction for 22
deductibles. The rates, factors, and methods used to calculate the cost for 23
coverage under this paragraph for insurance policies or other evidence of 24
coverage with provisions for deductibles shall be the same rates, factors, and 25
methods normally used by the insurance company in Kentucky to calculate 26
the cost for coverage for insurance policies or other evidence of coverage 27 UNOFFICIAL COPY 24 RS BR 1396
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without provisions for deductibles, except that, for insurance policies or other 1
evidence of coverage with provisions for deductibles effective on or after 2
January 1, 1995, the calculated cost for coverage shall not include any 3
schedule rating modifications, debits, or credits. For policies with provisions 4
for deductibles with effective dates on or after January 1, 1995, assessments 5
shall be imposed as calculated by the deductible program adjustment. The cost 6
for coverage calculated under this paragraph by insurance companies that 7
issue only deductible insurance policies in Kentucky shall be actuarially 8
adequate to cover the entire liability of the employer for compensation under 9
this chapter, including all expenses and allowances normally used to calculate 10
the cost for coverage. For policies with provisions for deductibles with 11
effective dates of May 6, 1993, through December 31, 1993, for which the 12
insurance company did not report premiums and remit special fund 13
assessments based on the calculated cost for coverage prior to the reduction 14
for deductibles, "premium" includes the initial consideration plus any 15
reimbursements invoiced for losses, expenses, or fees charged under the 16
deductibles. 17
(d) "Return premiums" for insurance companies means amounts returned to 18
insureds due to endorsements, retrospective adjustments, cancellations, 19
dividends, or errors. 20
(e) "Deductible program adjustment" means calculating premium and premiums 21
received on a gross basis without regard to the following: 22
1. Schedule rating modifications, debits, or credits; 23
2. Deductible credits; or 24
3. Modifications to the cost of coverage from inception through and 25
including any audit that are based on negotiated retrospective rating 26
arrangements, including but not limited to large risk alternative rating 27 UNOFFICIAL COPY 24 RS BR 1396
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options; 1
(26) "Insurance policy" for an insurance company or self-insured group means the term 2
of insurance coverage commencing from the date coverage is extended, whether a 3
new policy or a renewal, through its expiration, not to exceed the anniversary date 4
of the renewal for the following year; 5
(27) "Self-insurance year" for a self-insured group means the annual period of 6
certification of the group created pursuant to KRS 342.350(4) and 304.50-010; 7
(28) "Premium" for each employer carrying his own risk pursuant to KRS 342.340(1) 8
shall be the projected value of the employer's workers' compensation claims for the 9
next calendar year as calculated by the commissioner using generally-accepted 10
actuarial methods as follows: 11
(a) The base period shall be the earliest three (3) calendar years of the five (5) 12
calendar years immediately preceding the calendar year for which the 13
calculation is made. The commissioner shall identify each claim of the 14
employer which has an injury date or date of last injurious exposure to the 15
cause of an occupational disease during each one (1) of the three (3) calendar 16
years to be used as the base, and shall assign a value to each claim. The value 17
shall be the total of the indemnity benefits paid to date and projected to be 18
paid, adjusted to current benefit levels, plus the medical benefits paid to date 19
and projected to be paid for the life of the claim, plus the cost of medical and 20
vocational rehabilitation paid to date and projected to be paid. Adjustment to 21
current benefit levels shall be done by multiplying the weekly indemnity 22
benefit for each claim by the number obtained by dividing the statewide 23
average weekly wage which will be in effect for the year for which the 24
premium is being calculated by the statewide average weekly wage in effect 25
during the year in which the injury or date of the last exposure occurred. The 26
total value of the claims using the adjusted weekly benefit shall then be 27 UNOFFICIAL COPY 24 RS BR 1396
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calculated by the commissioner. Values for claims in which awards have been 1
made or settlements reached because of findings of permanent partial or 2
permanent total disability shall be calculated using the mortality and interest 3
discount assumptions used in the latest available statistical plan of the 4
advisory rating organization defined in Subtitle 13 of KRS Chapter 304. The 5
sum of all calculated values shall be computed for all claims in the base 6
period; 7
(b) The commissioner shall obtain the annual payroll for each of the three (3) 8
years in the base period for each employer carrying his own risk from records 9
of the department and from the records of the Department of Workforce 10
Development, Education and Labor Cabinet. The commissioner shall multiply 11
each of the three (3) years of payroll by the number obtained by dividing the 12
statewide average weekly wage which will be in effect for the year in which 13
the premium is being calculated by the statewide average weekly wage in 14
effect in each of the years of the base period; 15
(c) The commissioner shall divide the total of the adjusted claim values for the 16
three (3) year base period by the total adjusted payroll for the same three (3) 17
year period. The value so calculated shall be multiplied by 1.25 and shall then 18
be multiplied by the employer's most recent annualized payroll, calculated 19
using records of the department and the Department of Workforce 20
Development data which shall be made available for this purpose on a 21
quarterly basis as reported, to obtain the premium for the next calendar year 22
for assessment purposes under KRS 342.122; 23
(d) For November 1, 1987, through December 31, 1988, premium for each 24
employer carrying its own risk shall be an amount calculated by the board 25
pursuant to the provisions contained in this subsection and such premium 26
shall be provided to each employer carrying its own risk and to the funding 27 UNOFFICIAL COPY 24 RS BR 1396
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commission on or before January 1, 1988. Thereafter, the calculations set 1
forth in this subsection shall be performed annually, at the time each employer 2
applies or renews its application for certification to carry its own risk for the 3
next twelve (12) month period and submits payroll and other data in support 4
of the application. The employer and the funding commission shall be notified 5
at the time of the certification or recertification of the premium calculated by 6
the commissioner, which shall form the employer's basis for assessments 7
pursuant to KRS 342.122 for the calendar year beginning on January 1 8
following the date of certification or recertification; 9
(e) If an employer having fewer than five (5) years of doing business in this state 10
applies to carry its own risk and is so certified, its premium for the purposes 11
of KRS 342.122 shall be based on the lesser number of years of experience as 12
may be available including the two (2) most recent years if necessary to create 13
a three (3) year base period. If the employer has less than two (2) years of 14
operation in this state available for the premium calculation, then its premium 15
shall be the greater of the value obtained by the calculation called for in this 16
subsection or the amount of security required by the commissioner pursuant to 17
KRS 342.340(1); 18
(f) If an employer is certified to carry its own risk after having previously insured 19
the risk, its premium shall be calculated using values obtained from claims 20
incurred while insured for as many of the years of the base period as may be 21
necessary to create a full three (3) year base. After the employer is certified to 22
carry its own risk and has paid all amounts due for assessments upon 23
premiums paid while insured, the employer shall be assessed only upon the 24
premium calculated under this subsection; 25
(g) "Premium" for each employer defined in KRS 342.630(2) shall be calculated 26
as set forth in this subsection; and 27 UNOFFICIAL COPY 24 RS BR 1396
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(h) Notwithstanding any other provision of this subsection, the premium of any 1
employer authorized to carry its own risk for purposes of assessments due 2
under this chapter shall be no less than thirty cents ($0.30) per one hundred 3
dollars ($100) of the employer's most recent annualized payroll for employees 4
covered by this chapter; 5
(29) "SIC code" as used in this chapter means the Standard Industrial Classification 6
Code contained in the latest edition of the Standard Industrial Classification Manual 7
published by the Federal Office of Management and Budget; 8
(30) "Investment interest" means any pecuniary or beneficial interest in a provider of 9
medical services or treatment under this chapter, other than a provider in which that 10
pecuniary or investment interest is obtained on terms equally available to the public 11
through trading on a registered national securities exchange, such as the New York 12
Stock Exchange or the American Stock Exchange, or on the National Association 13
of Securities Dealers Automated Quotation System; 14
(31) "Managed health care system" means a health care system that employs gatekeeper 15
providers, performs utilization review, and does medical bill audits; 16
(32) "Physician" means physicians and surgeons, psychologists, optometrists, dentists, 17
podiatrists, and osteopathic and chiropractic practitioners acting within the scope of 18
their license issued by the Commonwealth; 19
(33) "Objective medical findings" means information gained through direct observation 20
and testing of the patient applying objective or standardized methods; 21
(34) "Work" means providing services to another in return for remuneration on a regular 22
and sustained basis in a competitive economy; 23
(35) "Permanent impairment rating" means percentage of whole body impairment 24
caused by the injury or occupational disease as determined by the "Guides to the 25
Evaluation of Permanent Impairment"; 26
(36) "Permanent disability rating" means the permanent impairment rating selected by 27 UNOFFICIAL COPY 24 RS BR 1396
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an administrative law judge times the factor set forth in the table that appears at 1
KRS 342.730(1)(b); and 2
(37) "Guides to the Evaluation of Permanent Impairment" means, except as provided in 3
KRS 342.262: 4
(a) The fifth edition published by the American Medical Association; and 5
(b) For psychological impairments, Chapter 12 of the second edition published by 6
the American Medical Association. 7