Which entities are subject to audits by the Administrative Director?

• A. Employers only
• B. Medical providers only
• C. Insurers only
• D. Insurers, self-insured employers, and third-party administrators

Answer: (D)

Audits by the Administrative Director target entities that finance or administer workers’ compensation benefits: insurers, self-insured employers, and third-party administrators who handle claims for those plans. The purpose is to verify financial solvency, proper reserves or funding, accurate reporting of costs, and compliance with the applicable statutes and regulations. Medical providers and employers who are insured through a carrier aren’t the main audit targets in this context, since their financial and administrative activities fall under the regulated insurers and the plan sponsors they insure, while third-party administrators play a key role in administering and reporting for self-insured plans. By including insurers, self-insured employers, and TPAs, the Director ensures the integrity of funding, claims handling, and regulatory compliance across the system.