FRANKFORT— A bill that supporters say is needed to control workers’ compensation losses following a 2017 Kentucky Supreme Court decision cleared the state House today on a 55-39 vote.
House Bill 2, sponsored by Rep. Adam Koenig, R-Erlanger, has the backing of the Kentucky Chamber of Commerce, which has said HB 2 is a response to the 2017 Kentucky Supreme Court ruling in Parker v. Webster County Coal. That ruling declared unconstitutional the state workers’ compensation system’s practice of terminating workers’ comp income benefits once an injured worker qualifies for normal Social Security retirement benefits.
“Taking these critical steps will improve Kentucky’s competitive position by reducing system costs while improving treatment and outcomes for injured workers, allowing a faster return to work,” Kentucky Chamber’s Senior Vice President of Public Affairs Ashli Watts said in House committee hearings on the bill last week.
Koenig echoed that sentiment today on the House floor, saying HB 2 restores the legislative intent of state law considered in the Parker decision.
“The Kentucky Coal Association testified during committee that they’ve been told to expect their rates to go up 25 percent just due to this one issue,” said Koenig.
Koenig has said that HB 2 will make Kentucky more competitive with surrounding states with lower loss ratios (claims paid versus earned premiums). Kentucky has a loss ratio of around 75 percent compared to fewer losses in surrounding states, according to an estimate shared by Koenig.
HB 2 would not impact injured workers currently receiving workers’ comp benefits, Koenig assured House members. In future cases, it would limit benefits to workers with certain injuries to 15 years, with a chance after 15 years to be recertified to continue receiving benefits.
Other provisions would increase the percentage of the average weekly wage that can be paid as income to injured workers from 100 percent to 110 percent and revise medical treatment guidelines and limits on attorney fees, among other things.
Voting in favor of the legislation was steel company owner Rep. Matt Castlen, R-Maceo, who said small businesses in Kentucky just want to be more competitive with peer states.
“You act like we’re selling out to the corporate people. What about the people like myself who employ 70-plus people, who give back to the economy every day?” asked Castlen, “Am I a criminal because I want to vote for this bill because I feel like that we need to do things to allow us to be more competitive? Absolutely not.”
Voting against HB 2 was Rep. Al Gentry, D-Louisville, who told the House the bill will “cut medical benefits for the most vulnerable workers.” Gentry said his data on the state’s loss ratios and premiums shows the state’s workers’ comp system is doing well.
“KEMI (Kentucky Employers’ Mutual Insurance) and private insurance companies have done quite well in recent years despite these declining premiums, and have been accumulating profits and distributing dividends,” said Gentry. He said HB 2 adds “unnecessary cost” to the system.
HB 2 now goes to the Senate for consideration.