KentuckySB 3432026 Regular SessionSenateWALLET

AN ACT relating to the Department of Workers' Claims and declaring an emergency.

Sponsored By: Phillip Wheeler (Republican)

Became Law

Effective Dates, EmergencyFundsReorganizationState AgenciesWorkers CompensationGovernorLabor And IndustryWorkforce

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Bill Overview

Analyzed Economic Effects

7 provisions identified: 4 benefits, 0 costs, 3 mixed.

Faster workers’ comp appeals and judges

A three‑member Workers’ Compensation Board decides appeals within 60 days after the last brief. Board members meet appeals‑court judge standards and get similar pay and conduct rules. Up to 19 Administrative Law Judges (ALJs) serve four‑year terms and must have at least five years of related practice. A chief ALJ leads scheduling and training and earns an extra $3,000 a year. ALJs get training at least twice a year. Vacancies are filled within 60 days, and some term dates shift to June 1 in 2026–2029. Officials can be removed for cause like ethics violations or failing to do required duties. Workers’ comp hearings follow Chapter 342 procedures and are exempt from KRS Chapter 13B. The Board is attached to the department for administration only.

Workers’ comp premium assessments through 2029

For 1997, the law set a 9% assessment on workers’ comp premiums. From 1998 through December 31, 2029, a yearly assessment is set to pay off the Special Fund’s unfunded liability. All assessments go to the Funding Commission’s benefit reserve and replace other assessments or taxes on workers’ comp premiums. Payments are due quarterly by the 30th day after each quarter, and must be electronic starting January 1, 2020. Carriers may collect the assessment from insureds but cannot charge more, and bills must show premium vs. assessment. Self‑insured groups may elect to be assessed like insurers, but the choice lasts at least 10 years. Insurers and groups must report employer lists, SIC codes, and premium by code each year.

Data sources for treatment pilot

A substance‑abuse treatment pilot must use Medicaid claims data, the controlled‑substances monitoring system, and workers’ claims data. The pilot starts only if funding is available.

New Workers’ Claims Department under Governor

The law creates a Department of Workers’ Claims attached to the Governor’s office. It sets up five divisions for hearings, claims, compliance, funds, and medical services. The Governor appoints a commissioner, and the Senate must confirm. Division directors need the Governor’s approval. Most staff are in the state classified system, but the commissioner, ALJs, and Board members are not. All records, staff, and unspent funds move to the new department on the law’s effective date. An Office of Legal Services with three divisions also supports the department.

Stronger checks on self‑insured employers

The commissioner reviews each year whether financial and security rules for self‑insured employers are strong enough and reports to lawmakers. A legislative committee reviews these rules every year. Five staff were added on July 1, 1994 to audit and monitor self‑insured employers.

Rules for old Special Fund claims

The Special Fund covers only injuries or exposures on or before December 12, 1996. Later injuries, later‑manifesting cumulative trauma, or later last exposures are not covered. If your employer settled and a judge later assigns some liability to the Special Fund, the Fund pays its share over the maximum period starting the settlement approval date. The Special Fund keeps a central registry for its claims and replaces the old subsequent claim fund. A dedicated division runs these funds, and the coal fund later moves to Kentucky Employers’ Mutual Insurance Authority.

Workers’ comp rule 803 KAR 25:190 void

The proposed amendment to 803 KAR 25:190 is available to the public at the LRC regulations compiler’s office. If the amendment was not adopted by April 14, 2022, it expired on that date. If it was adopted by then, the regulation is null, void, and unenforceable as of April 14, 2022. From January 4, 2022 to June 1, 2023, the agency could not adopt an identical or substantially similar rule.

Sponsors & Cosponsors

Sponsor

Phillip Wheeler
Republican • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 132 • No: 0

House vote • 3/27/2026

3rd reading, passed

Yes: 95 • No: 0

Senate vote • 3/10/2026