Workers’ compensation case deals a blow to Kentucky businesses

The Kentucky Supreme Court issued an opinion late last month on a workers’ compensation case that could increase workers’ compensation premiums for all Kentucky employers.

The Kentucky workers’ compensation law provides for a termination of indemnity benefits at social security age, or two years after the employee’s injury or last exposure, whichever occurs last.

The court, on a 4-3 vote, found that the termination based on social security eligibility to be a violation of the Equal Protection Clause of the U.S. and Kentucky Constitutions.  The reasoning of the four justices concurring on the opinion is that some workers are not eligible for social security and therefore those workers who are eligible may receive fewer weeks of indemnity benefits.

The Kentucky Chamber is concerned that the ruling will increase costs to Kentucky businesses as a significant number of injured workers will now be paid indemnity benefits for a longer period of time.  This would diminish our competitiveness relative to other states at a time when passage of critical, business-friendly legislation sets Kentucky on a path towards economic growth.

The Kentucky Chamber led a coalition of employer groups to pass HB 296 during the 2017 legislative session that would have addressed other recent supreme court decisions which could drive up premium costs and create uncertainty for businesses.  The Kentucky Chamber will continue to work with its members, partners and legislative leaders to pass the provisions of HB 296 and adopt a legislative fix for the statute recently found unconstitutional.