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- Actuarial Summary
- Get information about self insurance and the requirements to self insure
- Apply to become self insured
- Get information on posting a security deposit for self insurance
- Apply to take the Self Insurance Administrator's examination
- Public Records Act (PRA)
- Determine if an employer is self insured
- Access self insurance regulations
- Receive notices about OSIP rulemaking
- Determine if a person is a self insured administrator
- Self-Insurers' Security Fund
- California Self Insurers' Association
- Self Insurance Institute of America
- California WC & Risk Conference
OSIP Audit FAQ
Question: Why is OSIP changing to a two phase audit program?
Answer: To ensure uniformity in compliance of reserving and claims handling practices of workers’ compensation claims for self insured employers and to achieve our mandate to audit all private self insured employers every three years, pursuant to Labor Code Section 3702.6.
Question: What is Phase I and Phase II of the audit program?
Answer: Phase I is a desk audit conducted by the Audit Supervisors which includes detailed review of the most current annual report, claims logs, claims administrator qualifications and other information to determine if a field audit, Phase II is required. Phase II is a field audit conducted by an OSIP auditor.
Question: How will the self-insured employer be notified of a Phase II, field audit?
Answer: The employer will be notified of an audit in writing. Notice is usually given at least two weeks prior to the audit but there is not a statutory requirement for the timing of notification of a routine audit.
Question: Approximately how much time does it take to complete an audit?
Answer: The time it takes to complete an audit depends on how many claim files are reviewed, the complexity of the claims chosen for audit and the maintenance of the claim file. If claim files are missing documents or are unorganized the audit will take longer than anticipated to complete. The audit time will be extended if the administrator is utilizing a “paperless” system and documents have not been properly labeled.
When the auditor sends notice of the audit to the employer it will include an estimate of time the auditor believes the audit will take to be completed.
Question: Can the employer be an active participant in the audit?
Answer: Audits are conducted at the third-party administrators or self-administered employer’s location and your administrator may advise you of the findings during the audit. After the audit is completed the auditor will meet with the administrator and the employer to review the general findings of the audit.
Question: Will a written report outlining the audit findings be sent to the employer?
Answer: A written report of the audit findings will be sent to the employer and their administrator. The report is generated by the auditor, submitted to the Supervisor for final product, and then signed by the auditor and the audit supervisor of OSIP. Questions about the specific files may be directed to the auditor. Any other questions must be directed to the Supervisor.
Question: What are we using as guide in calculating reserves?
Answer: 8CCR§ Section 15300 – 15303
Question: What is the basis for finding a denial to be unsupported?
Answer: To be consistent with the DWC Audit Unit’s definition of a supported denial, the OSIP Audit Unit refers to 8CCR§10111.2(b)(2) which states in part: “the denial must state a legal, factual or medical basis recognized by applicable law and documented by information in the claim file. An employee's waiver of benefits in an otherwise clearly compensable case is not a ground to deny liability.”
Question: What life expectancy table does the OSIP Audit Unit use and where may we obtain this?
Answer: 8CCR§15300(b)(7) states that estimates “ . . . shall be determined based on the injured worker's life expectancy according to the most recent U.S. Life Expectancy Tables as reported by the U.S. Department of Health and Human Services, Centers for Disease Control and Prevention. Note: the most recent life expectancy tables can be found at http://www.dir.ca.gov/OSIP/pubandforms.htm.”
Question: Can we use rated age in calculating our reserves?
Question: Can I take credit for recoveries and/or contributions made by third parties?
Answer: 8CCR§15300(d) states that “Estimates of future liability shall not be decreased based on projected third party recoveries or projected reimbursements from aggregate excess insurance, nor shall reported paid costs be decreased based on third party recoveries or aggregate excess insurance reimbursements.” In addition, 8CCR§ 15300(b)(6) states in part “ . . . Estimates of future liability may be reduced based on the expectation of a third party recovery only in instances where an Order allowing credit has been issued pursuant to Labor Code Section 3861.” Therefore, in claim files involving multiple employers where the self-insured employer makes all the payment, to be reimbursed by the other employer(s) for their portion(s), the estimates shall reflect the full value of the claim. In claim files where there are multiple employers and the self-insured employer is the party that reimburses another employer, the reserves may be lowered per the percentage of contribution in the Order.
Question: Where there is an overpayment in temporary disability benefits and we have advised the employee that we are taking credit for this overpayment towards future benefits, may we lower the reserves to reflect the overpayment against permanent disability benefits and/or future temporary disability benefits?
Answer: Until and unless the WCAB has approved a stipulation allowing credit of overpaid indemnity benefits against future permanent and/or temporary disability benefits, reserves may not be reduced.
Question: Why do we need to include 132a and S&W in our reserves?
Answer: 8CCR§15300(b) requires that estimates of future liability include increases in compensation resulting from 132a and S&W filings.
Question: What is the procedure for appealing an audit finding?
Answer: There are four steps to appealing an audit finding.
- The claims administrator is encouraged to discuss findings with the auditor during the course of the audit and at the post-audit closing meeting.
- At the completion of the audit, if there are unresolved disagreements over the findings, the claims administrator should contact and schedule a meeting with auditor and the audit supervisor. In many instances, disagreements exist as a result of a misunderstanding or difference of opinion in the application of the regulations to the specific facts of the claim. The audit supervisor can apply a second set of eyes to determine if this has been done properly and consistent with the regulations, and may be able to explain the reason and rationale for the finding. The audit supervisor also has the authority to adjust or correct any errors or inappropriate findings. The audit supervisors may be reached through the contact page.
- After the above two steps, the claims administrator may make a formal request for reconsideration of the findings. In the request, the claims administrator must specify the specific reason(s) for requesting reconsideration and the request must be made in writing to the OSIP Chief.
- The appeal may be made formally to the Director. Information regarding appeals or request for hearings may be found in 8CCR§15430 through 15438.