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Senate Passes Sweeping WC Changes

  • State: Kentucky
  • Topic: Top
  • - Popular with: Legal
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The Kentucky Senate on Thursday passed a slightly modified version of a House bill that makes extensive changes to the state’s workers’ compensation system, including a provision that will limit permanent partial disability medical benefits to 15 years.

Sen. Robert Stivers

Sen. Robert Stivers

The Senate voted 23-14 for the modified HB 2, which also would create a drug formulary, improve some benefits for certain injuries and workers, limit attorneys’ fees and revamp a number of other sections of the state’s workers' compensation law.

“I truly believe this will be a fair system, in which workers who are injured will be paid, and individuals who no longer need benefits will have an opportunity for those cases to be closed out, so you don’t have to have designated reserves and costs in the system,” Senate President Robert Stivers, R-Manchester, said on the Senate floor Thursday evening.

The House version of the bill, sponsored by state Rep. Adam Koenig, R-Erlanger, passed the state House 55-39 last month. On Thursday, the Senate raised the age at which some indemnity benefits would end, from age 67 in the House bill, to age 70.

The measure now goes back to the House for what’s expected to be a quick and final adoption, perhaps as soon as Tuesday.

“It’s fine with me. Those are worker-friendly changes, so the House should approve it,” Koenig said.

Gov. Matt Bevin is expected to sign it.

Koenig, Stiver and business groups have said the overhaul is needed to keep the state business-friendly and hold down workers' compensation costs. But police organizations, labor groups and Democrats have said it's unnecessarily punitive to workers in the face of 12 years of workers' compensation rate reductions and burgeoning insurance company profits.

“I fail to see the need for such a sweeping change to the workers’ comp system,” Sen. Morgan McGarvey, D-Louisville, told the Senate chamber. “We can be pro-business without being anti-worker.”

Kentucky ranked 36th in the nation in employer cost of workers' comp coverage, meaning only 14 states and the District of Columbia have lower rates, according to a 2016 benchmarking study by Oregon regulators. Kentucky premiums cost an average of $1.52 per $100 in payroll — 82% of the national median, the study shows.

Perhaps most significantly, the measure would shut off permanent partial disability medical benefits after 15 years, down from the current rule of lifetime benefits. A worker could reapply near the end of the 15 years, would have to submit to a medical exam and likely would have to hire a lawyer to make a case before an administrative law judge, said Sen. Ray Jones, D-Pikeville. He argued that those are unreasonable hurdles for injured workers, and would require the worker to go to the expense of hiring a doctor and a lawyer out of pocket.

“It ought to be the other way around,” Jones said. “It should be up to the insurance carrier to show that the worker no longer needs the benefit.”

"I don't know where they came up with 15 years," said claimants’ attorney Ched Jennings of Louisville, who has followed the proceedings and has spoken out against the bill. "There's no medical evidence that says it's good for a disabled worker to stop medical treatments after 15 years."

“I wish I could say it’s a magic number, but it’s not,” Koenig told WorkCompCentral on Thursday. The time limit was suggested last year by a workgroup of parties interested in reforming the workers’ compensation system, he said.

The bill is similar to Koenig’s bill that passed the House last year but which was withdrawn in the Senate after it failed to gain significant support.

The coal industry, long one of Kentucky’s largest employers, has been pushing hard for HB 2 this year, in part because it would put a five-year statute of limitations on cumulative trauma claims from black lung disease; puts new requirements on black-lung medical professionals; and seeks to create a more competitive marketplace for workers’ compensation insurance.

“Although others may sit before you and claim that Kentucky’s workers’ comp system is not broken, I will tell you that the costs to the coal industry have skyrocketed,” Tyler White, president of the Kentucky Coal Association, told a Senate committee Wednesday.

He said that in some cases, premiums for coal companies have more than doubled in the last four years. One underground mine company now pays $1.9 million a year for coverage, he said, as the number of insurance carriers has shrunk to a handful.

The bill would require medical professionals who diagnose black lung disease to be board-certified pulmonologists, few of whom can be found in Kentucky, Jones said.

“This will essentially eliminate black lung claims,” he said.

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