Kentucky Approves Another Workers’ Comp Loss Cost Decrease

The Kentucky Department of Insurance has approved another workers’ compensation loss cost decrease for employers in the state.

The DOI announced this week that officials have ratified a 10.4% average reduction, effective Oct. 1. It’s the 16^th straight year for an overall decrease in the state and follows an average cut of about 9% that was approved last year, the department said in a bulletin.

“The decrease shows the continuing decline in the lost-time claim frequency and flat trend of the indemnity severity rate,” said DOI Commissioner Sharon Clark.

Like most states, Kentucky has seen workers’ comp costs decline steadily over the past two decades, thanks in part, analysts have said, to fewer claims, fewer workers covered by comp insurance, fewer coal workers, safer workplaces, a continued shift to safer service-sector jobs, and reductions in benefits and duration of benefits.

The Kentucky General Assembly in 2018 passed significant pro-business reforms that stopped lifetime medical benefits for some workers at age 70, created a drug formulary, and limited attorney fees, among other changes.

Kentucky ranked 38^th in the nation – near the lowest – in the 2020 Oregon workers’ comp premium ranking, down from 33^rd in 2018.

The COVID-19 pandemic appeared to have no significant impact on loss costs, the department said.

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