Preparing for a Compliance Audit

When you become self-insured, you must have the necessary processes in place to manage your self-insurance program and to report injuries. Each self-insurer is responsible for promptly and fairly delivering benefits to injured workers and is accountable for all aspects of its workers' compensation program (WAC 296-15-310 and WAC 296-15-320).

The auditor will spend approximately one week reviewing claim files where your claims are administered. Time-loss compensation, medical only and rejected claims, and claims with reopening applications will be thoroughly examined.

The claims will be reviewed for compliance with workers' compensation laws and regulations. A major emphasis will be placed on timeliness and accuracy of benefits delivered to injured workers and on proper reporting requirements.

Quarterly Report of self-insured business

An auditor will verify the total claim costs and worker hours reported on the quarterly report to ensure the assessments paid to L&I are based on correct reporting. The auditor will also review the deduction for the asbestos and supplemental pension fund assessments, if taken from employees' paychecks.

Claim costs and worker hours

An auditor will contact you prior to the visit to determine how you compile and report claim costs and worker hours. During the audit, the method you use to compile and report claim costs and worker hours will be verified. The totals reported to L&I will be audited.

Reportable claim costs are:

  • Time-loss compensation.
  • Permanent partial disability awards.
  • Medical bills.
  • Prescriptions.
  • Medical appliances.
  • Independent medical examinations and/or consultations.
  • Loss of earning power benefits.
  • Travel expenses incurred by injured workers for treatment or rehabilitation.
  • Vocational rehabilitation expenses.
  • Penalties paid to injured workers.
  • Interest on Board Orders.

Review and use the Audit Checklist to prepare for an audit (57 KB PDF).

For more information, read Preparing for Your Self-Insurance Audit.

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