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

Vermont Health Connect's (Vermont marketplace) internal controls were not always effective in ensuring that individuals were enrolled in qualified health plans (QHPs) according to Federal requirements. We identified deficiencies related to verifying applicants' identities, determining eligibility of applicants, resolving inconsistencies in eligibility data, and updating eligibility and enrollment data. QHPs are private health insurance plans that each marketplace recognizes and certifies as meeting certain participation standards and covering a core set of benefits.

On the basis of our review of 45 sample applicants from the enrollment period for insurance coverage effective in calendar year 2014 and performing other audit procedures, such as interviewing marketplace officials and reviewing supporting documentation, we determined that controls were not always effective. Specifically, the Vermont marketplace did not always (1) maintain documentation showing that it conducted identity proofing; (2) validate Social Security numbers through the Social Security Administration (SSA); (3) verify citizenship; (4) verify incarceration status; (5) verify or correctly calculate annual household income; (6) ensure that applicants determined eligible for insurance affordability programs were not eligible for minimum essential coverage; (7) identify inconsistencies in Social Security numbers and incarceration status; (8) resolve inconsistencies or notify applicants of inconsistencies in eligibility data; and (9) verify changes reported by enrollees.

The presence of an internal control deficiency does not necessarily mean that the Vermont 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.

The deficiencies that we identified occurred because (1) the Vermont marketplace did not have or did not follow existing procedures to ensure that applicants were enrolled in QHPs according to Federal requirements and (2) the Vermont marketplace's enrollment system was not designed to perform minimum essential coverage verifications, had defects, or lacked functionality.

We recommended that the Vermont marketplace (1) maintain documents and records that are sufficient to enable HHS to evaluate the marketplace's compliance with Federal requirements; (2) ensure that Social Security numbers, when provided by applicants, are validated through SSA; (3) ensure that citizenship and incarceration status are verified through SSA; (4) ensure that income amounts are verified through the Internal Revenue Service (IRS); (5) ensure that the design of its enrollment system properly calculates attested household income amounts in accordance with the IRS's definition of household income; (6) ensure that the design of its enrollment system is able to obtain available data regarding eligibility for ESI based on Federal employment through the Data Hub; (7) develop and implement policies and procedures to verify whether an applicant has already been determined eligible for coverage through Medicaid or CHIP; (8) ensure that all minimum essential coverage through non-ESI eligibility data is stored in the enrollment system; (9) ensure that eligibility for minimum essential coverage through non-ESI is verified through electronic data sources (Medicare, Veterans' Health Administration, Peace Corps, and TRICARE); (10) improve the design of its enrollment system to identify all inconsistencies in eligibility data and redetermine an applicant's eligibility on the basis of available electronic data sources, as appropriate; (11) improve the design of its enrollment system to ensure that applicants are notified of inconsistencies through automated notifications; (12) ensure that changes reported by enrollees are verified and eligibility is redetermined, as appropriate; and (13) redetermine, if necessary, the eligibility of the sample applicants whose verifications we determined were not performed according to Federal requirements. Vermont marketplace officials concurred with all of our findings and recommendations and provided information on actions that they had taken to address our recommendations.