Not All of the District of Columbia Marketplace's Internal Controls Were Effective in Ensuring That Individuals Were Enrolled in Qualified Health Plans According to Federal Requirements

Not all of the District of Columbia marketplace's (District marketplace) internal controls were effective in ensuring that individuals were enrolled in qualified health plans (QHP) according to Federal requirements.

On the basis of our review of 45 sample applicants from the enrollment period for insurance coverage effective in calendar year 2014, we determined that certain internal controls were effective, such as the controls for verifying applicants' citizenship status. However, the controls were not effective for (1) maintaining identity-proofing documentation, (2) verifying annual household income, (3) verifying an applicant's eligibility for minimum essential coverage (both employer-sponsored insurance and non-employer-sponsored insurance, and (4) maintaining application and eligibility verification data.

The presence of an internal control deficiency does not necessarily mean that the District 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. For example, if a marketplace did not have a control in place to verify an applicant's 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 District marketplace did not properly oversee the identity-proofing process and did not ensure that its eligibility system was always fully functional.

To address the specific deficiencies that we identified, we recommended that the District marketplace (1) maintain identity-proofing documentation for applicants who apply for QHPs; (2) verify annual household income in accordance with Federal requirements; (3) maintain documentation demonstrating that it verified whether an applicant was eligible for minimum essential coverage; and (4) ensure that its enrollment system maintains application, eligibility, and documentation, including all electronic eligibility verifications from the Data Hub.

The District marketplace concurred with our findings. The District marketplace did not specifically address our recommendations but detailed the steps it had taken, both before the start of our audit and as a result of our audit, to ensure that applicants were properly enrolled and that their enrollment would be properly documented. We believe the corrective measures identified by the District marketplace should address the issues identified in this report and urge continued oversight of the enrollment process.