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Not All Internal Controls Implemented by the New York Marketplace Were Effective in Ensuring That Individuals Were Enrolled in Qualified Health Plans According to Federal Requirements

Not all of the New York health insurance exchange's (marketplace) internal controls were effective in ensuring that individuals were enrolled in qualified health plans (QHPs) according to Federal requirements. 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, we determined that certain internal controls were effective, such as the controls for verifying the applicant's Social Security number through the Social Security Administration. However, the internal controls were not always effective for verifying annual household income, resolving inconsistencies in eligibility data, and verifying eligibility for minimum essential coverage through employer-sponsored insurance (ESI) and ensuring that insurance affordability programs were authorized only for individuals who do not have ESI.

The presence of an internal control deficiency does not necessarily mean that the New York 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 the New York marketplace did not

(1) design its eligibility and enrollment system to always verify annual household income properly, (2) use existing system functionality to resolve inconsistencies in eligibility data, and (3) ensure that it follows requirements to verify applicants' eligibility for minimum essential coverage through ESI and ensure that applicants who are eligible for minimum essential coverage through ESI are not determined eligible for advance premium tax credits (APTCs) and cost-sharing reductions.

We recommended that the New York marketplace (1) modify its eligibility and enrollment system to always verify annual household income properly, (2) use existing system functionality to resolve inconsistencies in eligibility data, and (3) ensure that it follows requirements to verify applicants' eligibility for minimum essential coverage through ESI and ensure that applicants who are eligible for minimum essential coverage through ESI are not determined eligible for APTCs and cost-sharing reductions.

We also recommended that the New York marketplace redetermine, if necessary, the eligibility of the sample applicants for whom we determined that verifications were not performed according to Federal requirements. The New York Department of Health, on behalf of the New York marketplace, concurred with our recommendations.

Copies can also be obtained by contacting the Office of Public Affairs at Public.Affairs@oig.hhs.gov.

Download the complete report.

Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201