Kentucky Panel Proposes Workers' Comp Fund

The Kentucky Horse Racing Authority, in a race against the legislative clock, moved Feb. 2 to submit recommendations to Gov. Ernie Fletcher for creation of a workers' compensation fund that would cover jockeys and exercise riders at racetracks and some training facilities.

Under the authority proposal, the Kentucky Jockey Injury Compensation Fund would serve as an "employer" solely for workers' compensation purposes. The estimated $2.4 million a year it would take to support the program would come from a 1% reallocation of in-state handle deductions from live racing only.

Time is of the essence. A preliminary request to draft a bill must be submitted by Feb. 7. The last day to file bills and have them considered during the current General Assembly session--a short one because it's an odd-numbered year--is Feb. 12.

"There are only 25 legislative days, but they're long legislative days," LaJuana Wilcher, secretary of the state Environmental and Public Protection Cabinet, said when asked about the chances of getting a bill to lawmakers in time. The racing authority falls under the auspices of the cabinet.

Authority members, some of whom participated in the meeting via conference call, agreed action is necessary. The sticking point was funding, and in the end, they decided the reallocation of handle--Wilcher termed it a "contribution"--was the most equitable because any entity that benefits from handle would help pick up the tab for the insurance fund.

A special insurance committee formed by the racing authority last November looked into programs in other states, including New York. The committee based recommendations on the New York plan, though in the end, the authority opted for a different funding method. Owners and trainers pick up the tab for the insurance fund through various fees in New York.

In New Jersey, jockeys, exercise riders, and harness drivers have workers' compensation coverage through a fund supported by purse deductions not to exceed 3%. Premiums cost about $500,000 million a year. In Maryland, owners and trainers paid $200-$225 to cover what last year was a $670,000 premium.

The Kentucky proposal is for Thoroughbred racing only. Harness drivers and trainers aren't included.

"The owner is not the goose that laid the golden egg," authority member Dell Hancock said. "That gene pool is shrinking. I think everybody should take part in paying for the premiums, and I think jockeys should be included."

Kentucky statute prohibits employees from directly paying for their own workers' compensation insurance. Jockeys, who would be considered employees of the proposed fund, would contribute, however, through the handle reallocation because it will impact purse money paid in each race. Jockeys receive a percentage of purse money as earnings.

In-state handle on live races in Kentucky totaled about $240 million last year.

Tom Ludt, an insurance agent and authority member who chairs the special committee, said it was imperative exercise riders be included in any insurance program. Some are actually employees of trainers, while others are independent contractors.

"We felt that if we're going to attack this animal in Kentucky, to go out and only protect jockeys would be missing the boat," Ludt said.

Thoroughbred tracks in the state provide $100,000 in on-track medical insurance for jockeys. Should the workers' compensation bill become law, that coverage--and the premiums that go with it--wouldn't be necessary.

Kentucky tracks that are members of the Thoroughbred Racing Associations would contribute about $477,000 of the $2.2 million the TRA would give to the Jockeys' Guild this year under a verbal agreement for media rights compensation. The TRA in December asked the Guild to account for how it spends the money, but thus far hasn't received an answer.

Those funds were discussed in passing at the Feb. 2 authority meeting but weren't identified as a funding source for a workers' compensation program. According to published reports, Kentucky tracks have no immediate plans to terminate Guild contributions.

The National Thoroughbred Racing Association Jockeys' Medical Insurance Panel, formed late last year in the wake of jockeys' walkouts at Churchill Downs and Hoosier Park, is expected to soon issue recommendations on a potential solution or solutions to the insurance problem.