Kentucky Disability Insurance laws & HR compliance analysis

Kentucky Disability Insurance: What you need to know

Disability insurance pays wage replacement benefits to employees who are not working due to non-job-related accidents or illnesses. (Workers' compensation covers job-related injuries.) Disability insurance also provides coverage for employees who may not be eligible for workers' compensation, or it may supplement workers' compensation.
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A few states have laws that require employers to provide disability insurance, but Kentucky is not among them. Kentucky employers may provide such insurance, but they are not required to do so. State law may require specific provisions in a group disability policy sold by insurers in Kentucky.
Discretionary clauses are insurance policy provisions that confer on the insurer/plan administrator discretionary authority to determine eligibility for benefits and to interpret the terms and provisions of the policy and are commonly used in disability insurance policies and plans. The Kentucky Department of Insurance has taken the position that discretionary clauses deceptively affect the risk purported to be assumed in any policy, and as such, any policy containing discretionary clauses may be disapproved (KY Department of Insurance Advisory Opinion 2010-01); the text of this advisory opinion is available here.
For additional information, visit the Kentucky Department of Insurance's website at
Last reviewed on May 7, 2019.

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