Education and Labor Workers' Compensation Funding Commission

Workers' Compensation Funding Commission
Actual FY 2024Actual FY 2025Revised FY 2026Recommended FY 2027Recommended FY 2028
SOURCE OF FUNDS
Restricted Funds
Balance Forward430,3684,123,5182,249,300
Current Receipts71,970,70466,241,78654,004,30053,092,50053,757,800
Non-Revenue Receipts5,643,1001,665,00033,070,00035,279,90035,316,600
Total Restricted Funds78,044,17172,030,30489,323,60088,372,40089,074,400
TOTAL SOURCE OF FUNDS78,044,17172,030,30489,323,60088,372,40089,074,400
EXPENDITURES BY CLASS
Personnel Costs73,759,91569,609,56788,995,20088,040,90088,742,900
Operating Expenses160,739165,086328,400331,500331,500
Capital Outlay6,332
TOTAL EXPENDITURES73,920,65369,780,98689,323,60088,372,40089,074,400
EXPENDITURES BY FUND SOURCE
Restricted Funds73,920,65369,780,98689,323,60088,372,40089,074,400
TOTAL EXPENDITURES73,920,65369,780,98689,323,60088,372,40089,074,400
EXPENDITURES BY UNIT
Workers' Compensation Funding Commission2,115,5532,059,4862,951,1002,911,7002,948,400
Benefit Reserve71,805,10067,721,50086,372,50085,460,70086,126,000
TOTAL EXPENDITURES73,920,65369,780,98689,323,60088,372,40089,074,400

The Workers' Compensation Funding Commission was created through the passage of House Bill 1 by the 1987 Extraordinary Session of the General Assembly. House Bill 928, passed by the 1994 General Assembly, transferred the Commission to the Labor Cabinet for administrative purposes. The agency has the public purpose of controlling, investing, and managing the funds collected pursuant to KRS Chapter 342.

The Commission is governed by a seven-member Board of Directors. Board members include the Secretaries of the Education and Labor, Economic Development, and Finance and Administration Cabinets. In addition, the Governor appoints four members who represent labor, insurance companies writing workers' compensation insurance, employers, and self-insured employers and groups.

The Commission collects two separate assessments as required by KRS Chapter 342. One assessment is imposed on Kentucky Workers' Compensation premiums received by all insurance carriers and group self-insurers and on a calculation-based premium equivalent for employers carrying their own risk. A second assessment is imposed on such premiums received from employers engaged in the severance or processing of coal. Assessments received are to fund and pre-fund the liabilities of the Special Fund and the Coal Workers' Pneumoconiosis Fund; finance the administration and operations of the Special Fund and the Coal Workers' Pneumoconiosis Fund; finance the administration and operations of the Funding Commission; finance all programs in the Labor Cabinet except the Division of Wages and Hours; and pay the liabilities and fund the operating budget for the Uninsured Employers' Fund in the Office of the Attorney General.

These assessments are credited to the Commission's Benefit Reserve Fund, and the excess of collections over Special Fund liabilities, the Coal Workers' Pneumoconiosis Fund liabilities, and budgeted expenditures are invested according to the Commission's policies and in compliance with KRS Chapter 386. The agency may perform or contract for audits of those entities subject to assessments, and may coordinate with other governmental agencies to ensure compliance with the statutes relating to Workers' Compensation funding. During the 2017 General Assembly, HB 377 directed the transfer of assets and liabilities of the Coal Workers' Pneumoconiosis Fund. The assets and liabilities of the Coal Workers' Pneumoconiosis Fund were transferred to the Kentucky Employers' Mutual Insurance (KEMI) and the program was closed to new claims after July 1, 2017. The assessments are received by the Workers' Compensation Funding Commission and are to be transferred annually to KEMI.