Self-Insuring Employer Audit Policy
Revised Code (ORC) 4123.35(G) & Ohio Administrative Code (OAC) 4123-19-10
December 1, 2015
Self-Insured Department/Employer Services
December 1, 2020
This policy defines oversight of
Self-Insuring employers for claims and administrative compliance.
applies to active and cancelled Self-Insuring Employers and the BWC
A. SI Active and
Cancelled Employers: Self-insuring employers and cancelled Self-insuring
employers that are responsible for active claims.
B. Level 1 review:
Annual review of SI-40 reporting for all active and cancelled SI employers.
C. Level 2 audit:
Compliance audit of claims handling, SI-40 reporting and Permanent Total
Disability (PTD) claims processing, conducted
approximately every three years for each active SI employer.
D. Level 3
audit: Audit conducted for new SI employers and as needed based upon
employer performance and random scheduling.
Includes full audit of claims compliance for active and cancelled SI employers
with active claims. Level 3 audits are conducted onsite at an Ohio location for
active SI employer or TPA Ohio location.
E. Compliant- Status
when an employer has met the requirements to be self-insured.
Not in compliance.
Self-Insured Review Panel.
Self-Insuring Employers Evaluation Board.
- Report of Paid Compensation and Case Reserves.
to OAC 4123-19-10, BWC will audit programs for employers that pay
compensation directly. The audits will be scheduled on a random basis, when it
is determined that the employer may have compliance issues, or upon request
from SIRP and SIEEB. Compliance audits will either be Level 2 or Level 3
audits. The audit can be completed by accessing the electronic files of the
employer or its representative, or by reviewing scanned or faxed documentation,
or hard copy files.
audit scope will include compliance with the claims and administrative
requirements established by the Ohio Revised Code and the Ohio Administrative Code.
Level 2 and 3 audits for Self-Insured Professional Employer
Organizations (SI-PEO) will include a review by the SI-PEO unit for
administrative compliance relating to UA3-SI PEO/Client Relationship notifications,
PEO Client claims and payroll reporting requirements, and SI-PEO quarterly reporting.
C. The SI department
will review (Level 1) all SI-40s annually. For active SI employers, a Level 2
or Level 3 claims compliance audit will generally occur no more than three
years from the most recent audit. Cancelled SI employers will be audited based
on the number of active claims, assessment step down status referenced in the Self-Insuring Employer Semi-Annual Assessments
Policy, SI complaints, and as requested by SIRP or SIEEB.
D. Upon completion
of the audit, the SI employer will receive a report outlining overall results,
individual claim findings, and current status of compliance. Additionally, any
future action that may be required will be addressed. The final audit results
will be based on the specific claim findings and trends relating to claims management
and adherence to administrative requirements. If the SI employer identifies
and corrects errors in specific claims prior to the audit, auditors may
consider whether the correction occurred within a reasonable timeframe in
relation to the original error when determining if it is a finding.
E. A single Level 2 or Level 3 audit will be conducted for SI employers with multiple entities and subsidiaries.
Audits will be conducted in Ohio, and the employer’s designated administrator
must be present for all Level 3 audits and participate on all Level 2 wrap up
F. The employer
will be required to provide any requested documentation and take action on any identified issue within the timeframe established
in the final finding. All SI records within the statute
of limitations are subject to audit.
G. If an employer
is non-compliant on a level 2 audit, BWC will require a follow-up Level 3 audit
within 6-12 months with the designated administrator present.
H. If an employer
has no claims requiring review during an audit
period, alternative methods will be identified to verify that the employer has
adequate controls in place to manage the SI program in compliance with the
The SI department will issue a final letter on Level 2 and Level 3
audits indicating the employer is compliant or noncompliant. Additionally, the SI
department will confirm if a requested action plan or action items are
acceptable and considered resolved. Finally, the letter will identify any future
action the SI department may take regarding the
policy. If an employer does not appropriately resolve specific claims issues,
the SI department may review the employer’s
current status as an SI employer and consider referral to SIRP.
Upon written request, the SI Auditing Supervisor will review requests
for reconsideration of individual or overall findings. Upon completion of the
review the employer will receive a written finding regarding the request for
Resolution of Complaints
complaints or disputes related to this policy must be submitted in writing to
the SI department via mail or email as detailed in the Self-Insured
Resolution of Complaints Policy.
of Workers’ Compensation
Attn. Self-Insured Department
Spring St., 22nd Floor
Columbus, Ohio 43215-2256
SI department will issue a formal written response to any complaint. If the
complaint is not resolved as a result of the formal response issued by the SI
department, a written request that the issue be referred to the Self-Insured
Review Panel (SIRP) may be submitted by the SI employer or SI-PEO.