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Kentucky high court upholds limits on workers’ comp benefits

The Kentucky Supreme Court ruled the state can cut workers' compensation benefits given to people who also qualify for Social Security.

FRANKFORT, Ky. (CN) — A Kentucky law passed to prevent duplicative benefits and reduce payments from the commonwealth's workers' compensation fund is constitutional, the Kentucky Supreme Court ruled Thursday.

The law in question, KRS 342.730(4), went into effect in July 2018 and limits payment of disability benefits under Kentucky's workers' compensation program to the time when a recipient reaches the age of 70.

Previously, a 1996 version of the statute terminated workers' compensation benefits as soon as an individual became eligible for Social Security.

That version was ruled unconstitutional by the Kentucky Supreme Court in the 2017 case Parker v. Webster County Coal, a judgment that prompted legislators to make the changes recognized in the 2018 version.

Cheryl Cates, a Kroger employee injured on the job in 2015, challenged the constitutionality of the 2018 statute after her total disability benefits were retroactively reduced by over $58,000.

Cates claimed the law violated the U.S. Constitution's equal protection clause because it treats a class of individuals – those over the age of 70 – differently than other workers' compensation recipients.

Her case was consolidated with several others after an appeals court upheld the constitutionality of the statute, and arguments were held before the Kentucky Supreme Court in April 2021.

Thursday's unanimous decision upheld the appeals court ruling, finding the prevention of duplicative benefit payments serves a legitimate governmental interest.

More importantly, the court held the 2018 version of the statute rectified the issues with the 1996 version and does not violate the equal protection clause.

"Under the 2018 amendment," Chief Justice John Minton Jr. wrote, "all workers' compensation benefits terminate at age 70 or four years after injury or injurious exposure, regardless of whether the recipients are also entitled to Social Security benefits."

He added, "Because of this change, the fatal flaw identified by the Parker majority -- the disparate treatment of those who will receive old-age Social-Security versus those not entitled to Social Security, for example, teachers -- is no longer an issue. Instead, the statute treats alike all those who receive workers' compensation benefits."

Cates persisted, and argued the new version was no different and still treated older Kentuckians who qualify for Social Security unfairly.

"We find the 2018 amendment classifies recipients based only on age, entirely unrelated to their old-age Social-Security eligibility," Minton said in rejecting the argument. "This age classification prevents a duplication of benefits, which we have found, to be a legitimate state interest and applies to all those receiving workers' compensation equally." (op., p. 11)

Cates argued in her appeal the 2018 statute could not be retroactively applied to her benefits claim, but the court disagreed.

Minton conceded claimants like Cates have a vested interested in their benefits, but determined that because her claim was not fully adjudicated at the time the 2018 law took effect, she is not guaranteed the full amount she was initially awarded.

"These issues are still being litigated," Minton said, "so [Cates] will not have a vested right to certain benefits until they have received a final judgment in their favor."

The court likewise rejected Cates' argument the statute violates Kentucky's constitution as a form of "special legislation" that applies only to a certain segment of the population.

Such legislation must apply to "a particular individual, object, or locale," according to the court's opinion, and Minton refused to mince words in his decision.

"Cates's ... argument that the statute differentiates between older and younger workers is a classification argument, which is properly considered under sections 1, 2, and 3 of the Kentucky Constitution. KRS 342.730(4) is simply not special legislation," her wrote.

Jeff Roberts, attorney for Cates, said they are disappointed with the ruling but "we knew that we were fighting an uphill battle when we appealed the case to the Kentucky Supreme Court.

 “The 2018 change took away approximately $58,000 from what the administrative law judge awarded Ms. Cates, solely because of her age,” he said. ““I do not believe that the legislature should be allowed to change a law and take away worker’s compensation benefits from a worker by a law that takes effect 3 years after her injury and 5 months after the ALJ awarded her the benefits.”

“While I disagree with the Supreme Court’s decision,” the attorney added, “I have the utmost respect for all of the Justices and thank them for their time in considering my arguments.”

The Kentucky Attorney General’s office did not respond to a request for comment.

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