Politics & Government

House panel approves business-friendly workers’ compensation overhaul

State Rep. Adam Koenig, R-Erlanger, presented a proposal Thursday to update Kentucky’s workers’ compensation program.
State Rep. Adam Koenig, R-Erlanger, presented a proposal Thursday to update Kentucky’s workers’ compensation program. Legislative Research Commission

A proposal to update Kentucky’s workers’ compensation program for the first time in about two decades makes changes sought by insurers and businesses but contains no adjustments sought by worker advocates and unions.

Rep. Adam Koenig, R-Erlanger, presented House Bill 296 Thursday to the House Committee on Economic Development and Workforce Investment.

In particular, the bill would prevent workers from making claims on injuries caused by repeated manual labor five years after they stopped doing the work. Koenig said putting a cap on the claims would help address fraud.

After 10 years, some people “all of a sudden claim they have a problem,” Koenig said.

The bill also would prohibit most people from collecting benefits at age 70. Instead, they would enroll in Medicare, shifting the financial burden from insurers and businesses to taxpayers.

The Committee on Economic Development and Workforce Investment approved the measure even though several lawmakers raised concerns about how the bill would affect workers. Koenig promised to address some of those concerns with an amendment when the bill is considered on the House floor, but he provided no specifics.

The major sticking point for lawmakers in the committee, which Koenig promised to address with an amendment, is that the bill does little to benefit workers.

Bill Londrigan, president of the AFL-CIO of Kentucky, said there has been no increase in benefits since 2000.

Meanwhile, one of the state’s largest workers’ compensation insurance companies, Kentucky Employers’ Mutual Insurance, has amassed a steadily growing surplus since 2004. At the same time, premiums for employers have declined by about 50 percent since 2004, Londrigan said.

That left him and others who represent workers wondering why the changes being made to the system benefited insurers and businesses instead of workers.

“You’ve helped attorneys, you’ve helped the business side, you’ve certainly helped the insurance companies, they’re gonna get a windfall, and you’ve even impacted the state budget,” said former lawmaker Bob Heleringer, who represents the Kentucky Injured Workers’ Association. “That’s what you tell people back home, and then they’re going to say ‘OK, well what’s in it for injured workers? What’s offsetting that ?’ And the answer, at least as it’s currently written, is nothing. Absolutely nothing.”

Koenig argued that part of the reason the insurance industry and business have have saved money is because of increased worker safety and technological advancements in industry.

He said he had considered adding a provision that would increase the amount injured workers receive from 100 percent of their salary to 110 percent of their salary, but he scrapped it because of questions about its legality.

When asked what should be done to help workers, Ched Jennings, an attorney who represents people making workers’ compensation claims, said the amount should be raised to 130 percent to adequately support workers.

Jennings brought several people who receive workers’ compensation payments to highlight his point, including a former University of Kentucky football player, Tony Woods, who was injured at work and now requires a cane to get around.

Among the lawmakers expressing concern about the bill was Rep. Lynn Bechler, R-Marion, who said he voted for it because of the expected amendment.

“I have no love for insurance companies,” Bechler said. “At the same time, I believe that workers’ compensation fraud is an issue.”

Koenig was a member of a task force that issued an 800-page report last year that didn’t come to a consensus about what changes should be made to the state’s workers’ compensation system.

Rep. Al Gentry, D-Louisville, said he once experienced a severe workplace injury and is concerned that the bill would end lifetime insurance benefits once a person hits 70.

“We don’t want to cut off lifetime benefits,” Koenig responded.

Daniel Desrochers: 502-875-3793, @drdesrochers, @BGPolitics