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Understanding SI audit requirements
BWC is required to audit SI employers to ensure programs are administered according to statutory 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:

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.