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

Not all of the Connect for Health Colorado's (Colorado 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 annual household income. However, the internal controls were not effective for (1) performing required eligibility verifications for applicants who opted not to participate in the insurance affordability programs, (2) obtaining U.S. Office of Personnel Management (OPM) or other data through the Federal Data Services Hub (Data Hub) to determine whether the applicant was a Federal employee and therefore was enrolled in or qualified for coverage through an employer-sponsored insurance plan or whether applicants were eligible for minimum essential coverage through non-employer-sponsored insurance, or (3) resolving inconsistencies in eligibility data.

The presence of an internal control deficiency does not necessarily mean that the Colorado 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 Colorado marketplace did not (1) design its enrollment system to verify applicants who voluntarily chose not to participate in the insurance affordability program, (2) design its enrollment system to obtain the OPM data that would allow the marketplace to identify those applicants who were Federal employees and thus to verify their coverage through an employer-sponsored insurance plan, and (3) have effective policies and procedures to ensure that inconsistencies in eligibility data were always resolved.

We recommended that the Colorado marketplace (1) improve the design of its enrollment system to verify the eligibility of applicants who opted not to participate in the insurance affordability programs and who enrolled in a QHP, (2) improve the design of its enrollment system to verify eligibility by obtaining the OPM or non-employer-sponsored insurance data through the Data Hub, and (3) ensure that it develops, implements, and follows its policies and procedures to resolve all inconsistencies in eligibility data. The Colorado marketplace concurred with our recommendations.