PERSONNEL CABINET

(Amendment)

101 KAR 2:140. Workers' Compensation Fund and Program.

      RELATES TO: KRS 18A.110(7)(i), 18A.370, 18A.375, 18A.380, 342.640

      STATUTORY AUTHORITY: KRS 18A.030(2)(i), 18A.110(7)(i), 18A.380

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 18A.110(7)(i) requires the Secretary of Personnel to promulgate administrative regulations to implement programs to provide for the safety, health and welfare of state employees. KRS 18A.380 requires the cabinet to promulgate administrative regulations for the administration of the state employee workers' compensation fund established by KRS 18A.375. This administrative regulation establishes requirements for the workers' compensation fund and program for state employees.

      Section 1. Workers’[Workers] Compensation Fund. The self-insured workers' compensation fund and program established by KRS 18A.375(1) shall cover all eligible employees.

      Section 2. Eligibles. (1) A state employee, as defined by KRS 18A.370, shall be eligible to participate in the program.

      (2) Other state related groups shall be included upon written agreement with the Personnel Cabinet.

      Section 3. Assessments. The assessment for an individual agency shall be based on the claims history for the past three (3) years and on the number of employees in the agency. Premiums shall be assessed at the beginning of each fiscal year.

      (1) A biennial actuarial study shall be carried out to insure the fund's fiscal soundness.

      (2) A fund deficit shall be recouped through an interim billing or additional assessment if deemed necessary by an actuarial study.

      Section 4. Benefits. (1)(a) The required medical expense for a service rendered by a hospital or doctor, or for a prescribed medication, shall be paid subject to approval of the claim.

      (b) A percentage of the employee's average weekly wage shall be paid if he is unable to work for an extended period due to a job-related injury or illness.

      (c)1. Except as provided in subparagraph 2 of this paragraph, compensation shall not be payable for the first seven (7) days of disability.

      2. If the disability continues over two (2) weeks, compensation shall be allowed from the first day of disability.

      (2) For an absence due to illness or injury for which workers' compensation benefits are received, if the employee elects to accept the workers' compensation benefits, accumulated [sick] leave may be used in order to maintain regular full salary. An employee electing to utilize accumulated leave shall complete and submit a Workers’ Compensation Request to Use Accumulated Leave Form WCF-2 to the employee’s supervisor. If paid accumulated[sick] leave is used, workers' compensation pay benefits shall be remitted to the employee’s agency[assigned back to the state] for whatever period of time an employee received paid [sick] leave. An employee shall not receive paid [sick] leave and workers' compensation pay for the same period of time.

(3) An employee’s total compensation, by workers’ compensation benefits, unemployment insurance benefits, use of accrued leave, or otherwise, shall not exceed 100 percent of the employee’s regular salary.

      Section 5. Notification Procedures. (1) Employee requirements. An employee shall inform the supervisor of an injury as soon as physically able to do so.

      (2) Supervisor requirements.

      (a) The supervisor shall:

      1. Complete the employer's first report of injury, IA-1, giving specific information about the injury; and

      2. Submit the form to the designated office in the agency within three (3) working days after the supervisor is notified of an injury to insure timely payments to the injured employee.

      (b) A Lost Time and Return to Work Form, WCF-1, shall be submitted by the employee or the employee's representative to the supervisor if an employee is losing time from work due to a work-related injury. The supervisor shall notify his personnel unit when an employee returns so that a WCF-1 form shall be submitted to the Personnel Cabinet.

      (c) Each medical bill, or medical information regarding treatment of a job-related injury or illness of the employee, shall be submitted in the same manner as an injury report. An injury report shall be submitted[forwarded] as soon as possible.

      (d) A safety representative in each agency shall be notified of each accident so that the representative may review accident causes and provide safety training. A supervisor shall promote safety with employees.

      Section 6. Recordkeeping. All records maintained by the Personnel Cabinet and by an agency with respect to an employee claim under this administrative regulation shall be confidentially maintained.

      Section 7. Agency Withdrawal and Readmission to Program. (1) If an agency included in the fund as a result of the employment of persons defined in KRS 18A.370 desires to withdraw from the program, the agency shall provide the Personnel Cabinet with written notice of its intent to withdraw no later than thirty (30) calendar days prior to the end of the current fiscal year. If the notice is timely submitted, the agency may elect to withdraw at the end of the current fiscal year.

      (2) An agency which withdraws from the program may be readmitted to the program at the discretion of the Personnel Cabinet, based on compliance with the provisions in subsections (3), (4), and (5) of this section.

      (3) As a condition of withdrawal, the agency shall reimburse the Commonwealth for all claims incurred by its employees, but not reported to the fund prior to the effective date of withdrawal, without regard to the length of time after the withdrawal date that the claims are actually received by the Personnel Cabinet.

      (a) The Commonwealth shall bill the agency on a quarterly basis for the cost of claims that were incurred but not reported as of the date of withdrawal until all claims have been submitted and processed; and

      (b) The agency shall reimburse the Commonwealth within thirty (30) calendar days of receipt of the itemized statement of payments made on the agency’s behalf.

      (4) If an agency that has withdrawn from the program desires to seek readmission to the fund, the Personnel Cabinet may restore the agency to the fund upon review and evaluation of the agency’s claims and payment history.

      (5) If the Personnel Cabinet approves the agency’s restoration to the fund, the Personnel Cabinet shall assess a premium based on:

      (a) Claims experience over the preceding three (3) years; and

      (b) The current number of employees in the agency.

      Section 8. Incorporation by Reference.

      (1) The following material is incorporated by reference:

      (a) First Report of Injury Form IA-1, February 1995; and

      (b) Lost Time and Return to Work Form WCF-1, November 2011[1995].

(c) Workers’ Compensation Request to Use Accumulated Leave Form WCF-2, November 2011.

      (2) This material may be inspected, copied, or obtained at the Personnel Cabinet, 501 High Street, 3rd Floor[200 Fair Oaks Lane, 5th Floor], Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.

TIM LONGMEYER, Secretary

      APPROVED BY AGENCY: November 15, 2011

      FILED WITH LRC: November 15, 2011 at 11 a.m.

      PUBLIC HEARING AND PUBLIC COMMENT PERIOD: A public hearing on this administrative regulation shall be held on December 21, 2011 at 10:00 a.m. at 501 High Street, 3rd Floor, Frankfort, Kentucky 40601. Individuals interested in being heard at this hearing shall notify this agency in writing within five (5) workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be cancelled. This hearing is open to the public. Any person who wishes to be heard will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted until January 3, 2012. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.

      CONTACT PERSON: Dinah T. Bevington, Office of Legal Services, 501 High Street, 3rd Floor, Frankfort, Kentucky 40601, phone (502) 564-7430, fax (502) 564-0224.

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

Contact person: Dinah T. Bevington

      (1) Provide a brief summary of:

      (a) What this administrative regulation does: This regulation details the administration of the state employee workers’ compensation fund and program established by KRS 18A.375.

      (b) The necessity of this administrative regulation: This administrative regulation is necessary to administer the workers’ compensation fund established by KRS 18A.375.

      (c) How this administrative regulation conforms to the content of the authorizing statutes: Pursuant to KRS 18A.110(7)(i), the Personnel Cabinet Secretary is required to promulgate administrative regulations to implement programs to provide for the safety, health and welfare of state employees. KRS 18A.380 requires the Personnel Cabinet to promulgate administrative regulations for the administration of the state employee workers' compensation fund established by KRS 18A.375.

      (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes: This regulation assists in the consistent application and treatment for state employees with respect to matters relating to workers’ compensation benefits. This administrative regulation establishes requirements for the workers' compensation fund and program for state employees.

      (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:

      (a) How the amendment will change this existing administrative regulation: The amendment clarifies that an employee may use any type of accumulated leave, rather than accrued sick leave, in order to maintain regular full salary while absent from work due to a work-related injury or illness. Additionally, the Workers’ Compensation Request to Use Accumulated Leave Form, WCF-2, is incorporated by reference. An employee must complete the WCF-2 prior to utilizing paid leave while receiving workers’ compensation benefits and provides information about remitting benefits while off on accrued leave. The amendment clarifies that an employee’s total compensation, received through workers’ compensation benefits, use of accrued leave, or otherwise, shall not exceed 100 percent of an employee’s regular salary. All references to the "assignment" of workers’ compensation benefits are deleted to ensure compliance with KRS 342.180, which prohibits the "assignment" of workers’ compensation benefits. Lastly, the Lost Time and Return to Work Form WCF-1 has been revised to correct technical aspects of the form, to clarify when the form must be completed, and to clarify what information must be contained on the form.

      (b) The necessity of the amendment to this administrative regulation: This amendment is necessary to expressly clarify that all types of accumulated leave may be utilized by employees receiving workers’ compensation pay benefits and the handling of these benefits while utilizing paid accumulated leave. This amendment is necessary in order to ensure compliance with KRS 342.180, which prohibits the "assignment" of workers’ compensation benefits, as well as to clarify that no employee shall receive benefits equally more than 100 percent of his or her salary while receiving workers’ compensation benefits.

      (c) How the amendment conforms to the content of the authorizing statutes: Pursuant to KRS 18A.110(7)(i), the Personnel Cabinet Secretary is required to promulgate administrative regulations to implement programs to provide for the safety, health and welfare of state employees. KRS 18A.380 requires the Personnel Cabinet to promulgate administrative regulations for the administration of the state employee workers' compensation fund established by KRS 18A.375.

      (d) How the amendment will assist in the effective administration of the statutes: These amendments assist in the administration of the workers’ compensation programs by clarifying an employees’ leave entitlement while receiving workers’ compensation benefits. Further, the amendments clarify how an employee’s receipt of accumulated leave will affect his or her worker’s compensation benefits.

      (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: All state employees, as defined by KRS 18A.370, and individuals subject to the provisions of 101 KAR 2:140 will be affected.

      (4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:

      (a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment: Employees receiving workers’ compensation pay benefits will be required by regulation to complete the Workers’ Compensation Request to Use Accumulated Leave Form WCF-2 if they elect to use accumulated leave while receiving benefits.

      (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3): No additional costs anticipated to each of the entities identified.

      (c) As a result of compliance, what benefits will accrue to the entities identified in question (3): No additional benefits will accrue that do not otherwise exist.

      (5) Provide an estimate of how much it will cost to implement this administrative regulation:

      (a) Initially: This regulation, as amended, is not anticipated to generate any new or additional costs.

      (b) On a continuing basis: This regulation, as amended, is not anticipated to generate any new or additional costs.

      (6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation: This regulation, as amended, is not anticipated to generate any new or additional costs.

      (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment: This regulation, as amended, is not anticipated to generate any new or additional fees or funding.

      (8) State whether or not this administrative regulation established any fees or directly or indirectly increased any fees: This regulation, as amended, is not anticipated to generate any new or additional fees.

      (9) TIERING: Is tiering applied? No. All 18A employees are treated the same.

FISCAL NOTE ON STATE OR LOCAL GOVERNMENT

      1. Does this administrative regulation relate to any program, service, or requirements of a state or local government (including cities, counties, fire departments, or school districts)? Yes

      2. What units, parts or divisions of state or local government (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation? All state agencies with "state employees" as established by KRS 18A.370.

      3. Identify each state or federal statute or federal regulation that requires or authorizes the action taken by the administrative regulation. KRS 18A.030(2)(i), KRS 18A 110(7)(i), KRS 18A.375, and KRS 18A.380.

      4. Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect.

      (a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year? No revenue will be generated.

      (b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years? No revenue will be generated.

      (c) How much will it cost to administer this program for the first year? There are no estimated additional costs to administer the amendments within this regulation.

      (d) How much will it cost to administer this program for subsequent years? There are no estimated additional costs to administer the amendments within this regulation.

      Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.

      Revenues (+/-):

      Expenditures (+/-):

      Other Explanation: