Policy Name:	Self-Insuring Employer Audit Policy
Policy #:	SI-01-03
Code/Rule Reference	Ohio Revised Code (ORC) 4123.35(G) & Ohio Administrative Code (OAC) 4123-19-10
Effective Date:	September 25, 2024
Approved:	Rex Blateri, Chief of Employer Services
Origin:	Self-Insured Department/Employer Services
Supersedes:	Self-Insuring Employer Audit Policy effective December 1, 2015.
History:	Revised effective September 19, 2024. New policy effective December 1, 2015.
Review Date:	June 22, 2028

 

I.       Policy Purpose

 

This policy defines oversight of self-Insuring employers (“SI employers”) for claims and administrative compliance.

II.     Applicability

The policy applies to active and cancelled SI employers and their third-party administrators (“TPAs”).

III.   Definitions

A.      Level 1 review: Annual review of SI-40 Report of Paid Compensation and Case Reserves (“SI-40”) reporting for all active and cancelled SI employers.

B.      Level 2 audit: Compliance audit of claims management, SI-40 reporting, and Permanent Total Disability (“PTD”) claims processing, conducted approximately every three years for each active SI employer.

C.      Level 3 audit: Audit conducted for new SI employers or 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 employers or at their TPA’s Ohio location.

D.     Compliant: Status when an employer has met the requirements to be self-insured.

E.      Noncompliant: Status when an employer has not met the requirements to be self-insured.

IV.   Policy

A.      The Self-Insured Department (“SI Department”) will audit programs for SI employers. The audits will be scheduled on a random basis, when the SI Department has determined the employer may have compliance issues, or upon request from the Self-Insured Review Panel (“SIRP”), or the Self-Insuring Employers Evaluation Board. Compliance audits will either be Level 2 audits or Level 3 audits. The audit can be completed by accessing the employer’s or TPA’s electronic files, by reviewing scanned or faxed documentation, or by reviewing hard copy files.

B.      The audit scope will include compliance with the claims and administrative requirements established by the Ohio Revised Code and the Ohio Administrative Code.

C.      The SI Department will conduct a Level 1 review annually for active SI employers. A Level 2 audit or Level 3 audit will generally occur no more than three years from the most recent Level 2 or Level 3 audit for the active SI employer.

D.     The SI Department will review cancelled SI employers for the most current contact information and other relevant financial and administrative information.

E.      The SI Department will conduct a single Level 2 audit or Level 3 audit for SI employers with multiple entities and subsidiaries. Audits will be conducted in Ohio, and the SI employer’s designated workers’ compensation administrator must participate either in person or by video conference.

F.      The SI employer will provide any requested documentation and resolve any identified issue within the timeframe established in the final audit findings. All claim records for the SI employer within the statute of limitations are subject to audit.

G.     If an employer is found to be noncompliant on a Level 2 audit or Level 3 audit, BWC will require a follow-up Level 3 audit within twelve months with the SI employer’s designated workers’ compensation administrator, who must participate in person or by video conference.

H.     If an SI employer has no claims requiring review during an audit period, alternative methods will be used to verify the employer has adequate controls in place to manage the  self-insured program in compliance with the statutory requirements.

I.           The SI Department will issue a final letter on Level 2 audits and Level 3 audits indicating the employer is compliant or noncompliant. Additionally, the SI Department will determine whether a requested action plan is acceptable and all action items are resolved. 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 refer the matter to SIRP for consideration of revocation or nonrenewal of the employer’s self-insured status.

J.         The final audit findings will be based on the specific claim findings and trends relating to claims management and adherence to administrative and legal 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 the error constitutes an audit finding.

K.         Upon written request, the SI Department’s Auditing Supervisor will review requests for reconsideration of any audit findings.

V.     Resolution of Complaints

A.         Any 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-Insuring Employer Dispute/Protest Policy.

Ohio Bureau of Workers’ Compensation

Attn. Self-Insured Department

30 W. Spring St., 22nd Floor

Columbus, Ohio 43215-2256

Email: SIINQ@bwc.ohio.gov.

B.   The 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 SIRP may be submitted by the SI employer.