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Audit requirements
BWC is required to audit self-insuring employers to ensure programs are administered according to statutory requirements

BWC is required to audit self-insuring employers to ensure they are administering programs according to statutory requirements. The audit process consists of a two-tier program that focuses on the employer's knowledge and implementation of the administrative, reporting and claims management requirements. The expectation is a self-insuring employer has proper controls in place to ensure compliance with the statutory requirements.


Level 2 compliance audit

Level 2 audits are a more comprehensive review of an employer’s claim compliance and SI-40 reporting practice. We may schedule and conduct these audits on an as-needed basis based on the following triggers:

  • Unexplained significant variances on the SI-40 from one year to the next;
  • Inability to provide material support for a reduction reported on previous SI 40s;
  • High-risk self-insuring employers;
  • Concerns noted on prior Level 2 audits;
  • Multiple valid complaints in a rolling 12-month period;
  • More than four years since last audit.

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

Scope of audit: The audit will include:

  • Accuracy of SI-40 reporting;
  • Accuracy in calculating wages for TT and PP payments;
  • Accuracy in PTD calculation;
  • Timeliness of compensation payments;
  • Number and type of complaints;
  • Aggregate reserves.


Level 3 compliance audit

Level 3 audits review all aspects of an employer’s claims administration and reporting practices. We may schedule these audits based on the following triggers:

  • Any employer not in compliance in any area of the Level 2 audit;
  • Four years or more elapsed since last Level 3 audit;
  • Initial six-to-12-month audit for all new self-insuring employers;
  • Change in administrator requires completion of the online tutorial through the BWC and shortens the four-year time line to 12 months from the point of turnover;
  • Upon finding of a third valid self-insured complaint in any rolling 12-month period;
  • Failure of an employer to demonstrate strong working knowledge and consistent practices will result in a repeat Level 3 audit in the following six months to one year.

Frequency of audit: As needed

Scope of audit: The audit will include:

  • 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.