Not All of the Washington Marketplace s Internal Controls Were Effective in Ensuring That Individuals Were Enrolled in Qualified Health Plans According to Federal Requirements
Not all of the Washington Health Benefit Exchanges (Washington marketplace) internal controls were effective in ensuring that individuals were enrolled in qualified health plans (QHPs) according to Federal requirements.
On the basis of our review of 45 sample applicants from the enrollment period for insurance coverage effective in the calendar year 2014, we determined that certain controls were effective, such as the controls for verifying applicants, incarceration status. However, on the basis of our sample review and performing other audit procedures, such as interviewing marketplace officials and reviewing supporting documentation, we determined that other controls were not effective.
The presence of an internal control deficiency does not necessarily mean that the Washington marketplace improperly enrolled an applicant in a QHP or improperly determined eligibility for insurance affordability programs. Other mechanisms exist that may remedy the internal control deficiency, such as the resolution process during the inconsistency period. 
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For example, if a marketplace did not have a control in place to verify an applicants citizenship through the Social Security Administration as required, the marketplace may still have been able to verify citizenship with satisfactory documentation provided by the applicant during the inconsistency period.
The deficiencies that we identified occurred because the Washington marketplace did not (1) ensure that it verified all applicants eligibility for minimum essential coverage through non-employer-sponsored insurance (ESI) and (2) design its enrollment system to resolve all inconsistencies in eligibility data and to properly verify annual household income. In addition, the marketplace did not have procedures to obtain information from the Office of Personnel Management (OPM) and Washingtons Small Business Health Options Program (SHOP) to ensure that it verified whether applicants were eligible for minimum essential coverage through ESI.
We recommended that the Washington marketplace (1) implement corrective actions to ensure that it verifies whether all applicants are eligible for minimum essential coverage through non-ESI, (2) improve the design of its enrollment system to resolve all inconsistencies in eligibility data and determine applicants eligibility on the basis of available electronic data sources as appropriate and properly verify annual household income, and (3) develop and implement procedures to obtain information from OPM and Washingtons SHOP to verify whether applicants are eligible for minimum essential coverage through ESI.
We also recommended that the Washington marketplace redetermine, if necessary, the eligibility of the sample applicants for whom we determined that verifications were not performed according to Federal requirements. The Washington marketplace concurred with our recommendations and provided information on actions that it had taken or planned to take to address our recommendations.
Filed under: Center for Medicare and Medicaid Services