General Questions

Must we cover owners or corporate officers of the company by workers' compensation insurance?

Individual owners or partners of a bona fide partnership are exempt from coverage. They may be covered with proper notification. Corporate officers are automatically included for coverage. They may be excluded from premium charges and coverage by proper filing of the special Kentucky Form 4.  To receive a Form 4, contact the Department of Workers' Claims, Enforcement Division, at 1-800-731-5241.

Who must be covered by workers' compensation insurance?

Employers who have even one part-time employee are subject to coverage and must provide workers' compensation protection to that employee, either through a private insurance company or a self-insurance program like KESA. Exempt from coverage are agricultural employees, domestic employees in private homes where there are less than two full-time domestic employees, persons employed by homeowners for residential maintenance and repair for up to twenty (20) consecutive days, persons who work only in return for aid or sustenance from charitable organizations, persons who are participating in a carpool for transportation to and from work, partners of a bona fide partnership, and certain employees protected by the laws of the United States.

What should I do when I need to add or delete a location?

Please contact your agent.

Must I pay premium on overtime wages?

If you maintain your books to show overtime pay separately by employee and in summary by classification, you can exclude a portion of the overtime pay from the gross payroll. In other words, you are only required to pay premium on the straight time portion of your overtime payrolls - as long as your records show the split between straight time and overtime.  ***If adequate records are not maintained, the overtime pay cannot be excluded from the total payroll.***

How is overtime calculated?

What is an experience mod?

Workers' compensation uses an actuarially-based method of determining if a specific company's loss experience is better than expected or worse than expected.  The formula compares the losses that actually occurred to the losses that were expected.  A mod of 1.00 indicates an average risk.  A mod greater than 1.00 indicates a risk with greater than expected loss experience.  A mod less than 1.00 indicates a risk with better than expected loss experience.

Who fills out the Report of Injury (IA-1) form?

The employer.

When should the Report of Injury be filled out?

If medical treatment (even first aid) is provided for any employee, or if time is lost from work, you must fill out this form. It should be completed within 24 hours of the injury. Kentucky statutes require the form to be sent within three (3) days of your knowledge of a loss. Violations of this statute can result in fines.

How is the best way to submit a Report of Injury (IA-1) form to KESA?

Online.  If you already have a member login and password, click on the Member Login or Report Injury button on the right.  If you do not have a member login and password, please contact kesasupport@kesa.org.

From the Member Login button, click on the Claims tab and the Enter/Modify Notice of Injury button.  You will see the first page of the form and will be prompted through.  From the Report Injury button, you will see the first page of the form immediately and will be prompted through.

You may also call in a Report of Injury to 800-367-5372 or fax to 502-894-0066.

Download Report of Injury form

What if an employee has a minor injury or simply mentions that they hurt their back…do I still need to send in a First Report of Injury or Illness?

Yes. You need to document the notice of injury even if it seems slight or the employee does not immediately seek treatment. The employee may, at some future date, decide that the pain is not going away and seek treatment. It is always best to have a Report of Injury on file.

Where can my company obtain an OSHA 300 log?

You can download an OSHA 300 log from http://www.osha.gov/recordkeeping/RKforms.html or call the Kentucky Labor Cabinet's Division of Education and Training at 502-564-4769.

Understanding Group Self-Insurance

What is a group self-insured workers' compensation fund?

A group self-insured fund is a not-for-profit organization of employers formed for the specific purpose of providing statutory workers' compensation and employers' liability coverage.  Employers that form a self-insured fund are typically small to medium-size companies that may not have the size or financial capacity to become a self-insurer on their own, but want to assume control over their workers' compensation costs and enjoy the benefits of self-insurance.

How do group self-insured funds work?

Members of a self-insured fund pay a premium based on their exposures, classification codes, payroll, and experience modifications.  Premiums are used to pay claims and administrative expenses of the fund such as loss control, legal, accounting, actuarial, and management costs.  Any premium surpluses are returned to the group's members in the form of dividends, lowered premiums, or an increase in members' equity.  A self-insured fund also provides group purchasing power for specific excess insurance, which provides protection against catastrophic occurrences.

What is specific excess insurance?

Insurance companies purchase insurance commonly known as reinsurance, or excess insurance, to protect against the financial drain of a catastrophic occurrence.  Typically a fund will purchase excess insurance with a set self-insured retention (SIR), which is the amount of money the fund is responsible for if a workplace catastrophe occurs.  Any amount above the SIR is covered by the excess carrier up to the limit of liability.

How is a group self-insured fund different from a standard carrier?

A group self-insured fund is a not-for-profit entity whereas a standard carrier is a for-profit entity.  If a group self-insured fund has surplus premiums at the end of the year, the surplus is returned to its members.

What are the advantages of joining a group self-insured fund?

  • Lower premiums because no profit margin is added.
  • Group purchasing power for excess insurance.
  • Potential dividends - surplus may be returned to members.
  • High quality and specialized loss control programs geared toward specific members' needs.
  • Professional, pro-active claims management services.

Are there any disadvantages of joining a group self-insured fund?

Yes.  A self-insured fund's members are jointly and severally liable for workers' compensation and employers' liability losses incurred by the membership.  Just as the membership shares in any surplus, they also share any deficit from a given year.  It is within the rights of a self-insured fund to assess its members at the end of a policy period for additional premiums to cover unforeseen claims or administrative costs.  Also, because funds are regulated by the state and may only cover exposures within that state, employers with operations in more than one state must find alternate means to cover any of their out-of-state exposures.