Understanding SI audit requirements

The audit process is a two-tier (level) program that focuses on the employer's knowledge and implementation of the administrative, reporting, and claims management requirements.

Level 2 compliance audit

With the Level 2 compliance audit, we conduct a more comprehensive review of an employer's claim compliance and SI-40 reporting practice, which validates how much was paid out in claims costs. We can schedule and conduct these audits as needed based on the following triggers. 

• Not in compliance with any area in a Level 1 audit
• Unexplained significant variances on the SI-40 from one year to the next
• Not able to provide material support for a reduction reported on previous SI-40s
• A high-risk self-insuring employer
• Concerns noted from prior Level 2 audits
• Multiple valid complaints in a rolling 12-month period
• Not been audited for more than four years

Frequency: Our self-insured department targets completing a Level 2 audit on all active self-insuring employers every two to three years.

Scope: The Level 2 audit will include determining the:

• Accuracy of SI-40 reporting.
• Accuracy in calculating wages for temporary total compensation and permanent partial – scheduled loss
• Accuracy in permanent total disability calculation
• Timeliness of compensation payments
• Number and type of complaints
• Aggregate reserves

We'll notify the employer in advance of what audit information they need to provide.

Level 3 compliance audit

With a Level 3 compliance audit, we review all aspects of an employer's claims administration and reporting practices. We may schedule these audits based on the following triggers.

• Initial six-to-12-month audit for all new SI employers.
• Any employer who is not in compliance with any area of the Level 2 audit.
• Four years or more since the last Level 3 compliance audit.
• Finding a third valid self-insured complaint in any rolling 12-month period.
• A change of the administrator requires completion of our online Self-Insured Orientation Tutorial and shortens the four-year audit time line to 12 months from the point of turnover (change in administrators).
• Failure of an employer to demonstrate strong working knowledge and consistent practices with the SI process will result in a repeat Level 3 audit in the following six months to one year.

Frequency: As needed

Scope: The audit will include reviewing the:

• Timeliness of lost-time claim reporting to BWC.
• Timeliness of certifying claims.
• Timeliness of medical bill payments.
• Reasonableness of medical bill response.
• Timeliness of compensation payments.
• Accuracy of compensation payments.
• Timeliness of responding to treatment requests.
• Availability of claim file.
• Maintaining a complete claim file.
• Proper notification to injured worker on claims process.