KENTUCKY WORKERS' COMPENSATION LAW CHANGES JULY 14, 2018

During the 2018 Kentucky General Assembly, the legislature, through House Bill 2 (HB2), enacted significant changes to the workers' compensation statute. While some of the changes were to apply retroactively (to work injuries that pre-dated the statutory changes), many of the changes will not come into effect until July 14, 2018.  A recap of the significant changes in the statute:

Caps on Medical Benefits:

Under the current statute, individuals who are injured at work and sustain a permanent injury receive medical benefits for the "duration of the injury." Since the injury is "permanent," these are also referred to as "lifetime medical benefits" HB2 terminates all medical treatment 15 years from the date of injury, except in permanent total disability, permanent partial paralysis, and specific amputation cases.  The Kentucky Department of Workers' Claims is required to send a "Notice of Termination" letter to each injured worker 26 weeks prior to the expiration of their entitlement to medical benefits.  The statute then requires the injured worker to submit medical proof to an Administrative Law Judge from his or her physician explaining the need for ongoing treatment.  This must be filed within 75 days of the expiration of the 15 years.  Once the injured worker files his or her request for continued benefits, along with the supporting medical proof, an Administrative Law Judge will determine whether the medical benefits shall continue.  The caps on medical benefits only affect work injuries that occur on or after July 14, 2018.  

Interest Penalties on Past-Due Benefits: 

Under the current statute, in general, the employee is entitled to interest on payments of past-due benefits.  HB2 allows employers or their insurance carriers to avoid paying interest for delaying disability or medical benefit payments to the injured worker if an Administrative Law Judge determines "the delay was caused by the employee."   This change affects work injuries that occur on or after July 14, 2018.

Reopening a Claim for Additional Benefits or to Decrease Benefits: 

Currently, a reopening can occur within four years of an Order or settlement.  HB2 only permits reopenings within four years of the original Settlement or Award, which limits reopening rights for injured workers by decreasing the time frame within which to file a reopening claim.  Workers whose disabilities increase from a work-related injury more than four years after the original award would no longer be compensated for an increase in disability.  The restriction on reopenings is remedial and applies to all claims regardless of when the injury occurred.

Cumulative Traumas: 

Currently, notice of a claim for cumulative trauma, and filing of a claim with the Department of Workers' Claims, must occur within 2 years from the date of last injurious exposure.  This results in an open-ended statute of limitations as long as the employee continues to be engaged in his or her repetitive duty.  HB2 requires notice of the cumulative trauma be given to the employer and formal claim filed with the Department of Workers' Claims within two years from the date the employee is told by a physician that the cumulative trauma is work-related.  A claim must be filed within five years after the last injurious exposure to the cumulative trauma.  Essentially, an injured worker cannot extend the statute of limitations because a doctor did not relate the injury back to repetitive work for many years after the work ended.  If a physician does not relate the injured worker's condition to a work-related cumulative trauma for more than five years after the repetitive work ended, the statute of limitations will prevent the injured worker from recovering for his or her work injury.  This change is remedial and applies to all claims regardless of when the injury occurred.  As such, claims which may have been viable at the time the statute was enacted may have been made invalid by the passage of this statute.

Average Weekly Wage: 

Currently, high-wage earners who are injured are restricted in the amount of benefits they can receive - the maximum being the "state average weekly wage."  This has long been criticized as unduly penalizing high-wage earners who are injured.  For injured workers earning higher wages, HB2 increases Temporary Total Disability and Permanent Total Disability benefits to 110% of the state average weekly wage and increases Permanent Partial Disability benefits from 75% to 82.5% of the state average weekly wage.  This statute will have a positive effect on high-wage earners who are injured, particularly when the injured worker is receiving Temporary Total Disability benefits.

Attorney Fees: 

Currently, attorney fees in workers' compensation claims are capped at $12,000.00, with a fee schedule based upon a percentage of what is recovered by an attorney on behalf of the injured worker: 20% of the first $25,000.00; 15% of the next $10,000.00; 5% of the remainder with the fee capped at $12,000.00.  HB2 raised attorney fees to a maximum of $18,000.00, with the following calculation:  20% of the first $25,000.00; 15% of the next $25,000.00; 10% of the remainder with the fee capped at $18,000.00.  This is still a contingency fee, which means that attorneys do not get paid unless they recover money for their clients.  This is certainly a benefit to the injured worker who cannot afford to pay an attorney upfront for representation.  This change goes into effect for all attorney/client contracts entered into after July 14, 2018.

Illegal Substances/Voluntary Intoxication of Injured Workers: 

Currently, if an employee undergoes a drug test after an injury, an employer must prove that the use of non-prescribed substances (illegal drugs or alcohol) were the proximate cause of the injury.  HB2 shifts the burden of proof to the injured worker to prove such illegal substance or alcohol was not the proximate cause of the injury.  This is a significant difference, as it could be difficult to get treating physicians to state whether or not an illegal substance played a role in a work injury.  This change goes into effect on July 14, 2018.

Benefits for Older Workers: 

Prior to the enactment of this statute, older injured workers were restricted to the amount of income benefits they could recover.  Specifically, income benefits are terminated when the employee qualified for normal old-age Social Security retirement benefits or two years after the employee's injury.  HB2 extends benefits to senior workers to age 70 or 4 years after the employee's injury.  This change immediately went into effect for all pending claims when the statute was passed by the legislature.

Changes were made to other areas of the statute, including occupational disease evaluations and treatment guidelines.  

The workers' compensation statute is very complex. Should you have a workers' compensation claim - if you or a loved one was injured while in the course of employment - contact one of our attorneys immediately to discuss the benefits to which you are entitled, and how the new statute affects your rights!