New Name, Same Advantages: Understanding CHOICE (Formerly ICHRA) Personalized Health Insurance Coverage Arrangements for Employers

Healthcare costs are rising, and employers are feeling the strain. As pressure continues to mount, many organizations are searching for ways to take more control of their healthcare spending. One option that has been gaining traction is a Custom Health Option and Individual Care Expense, or CHOICE Arrangement.   

This alternative health insurance model was introduced in 2020. Since then, it has been steadily growing. Adoption among employers with 50 or more full-time employees rose 34% from 2024 to 2025, according to one report.  

Formerly known as ICHRA, this benefits model was recently rebranded as CHOICE Arrangements by the federal government as of September 2026. The name change does not affect the mechanics of the program.  

For many organizations, this model provides greater control over costs while allowing employees the ability to select a plan suited to their personal needs.  

This article will explore how a CHOICE Arrangement works and how it can be used to stabilize healthcare costs.   

What is a CHOICE Arrangement?

A CHOICE Arrangement is an employer-sponsored benefit that enables employers to make pre-tax contributions to their employees for health insurance premiums and other eligible medical expenses.  

Unlike a traditional group insurance plan, a CHOICE Arrangement gives an employer the ability to set their own fixed monthly contribution limits. Employers can adjust the amount employees receive based on employee class (full-time vs. part-time, geographic location), providing them with greater control over their costs.  

Once an employer establishes a CHOICE Arrangement, employees can go to the Marketplace to choose a qualified individual health insurance or Medicare policy. Depending on their location, an employee might have dozens of options to choose from, which means they can select a plan best suited to their needs. This is a direct contrast to traditional group coverage, in which an employer typically picks one or several options that employees can choose from. After an employee purchases a qualified policy, they are reimbursed based on the amount set by the employer.  

With a CHOICE Arrangement, coverage is not tied to employment. If an employee leaves their role, the employer-provided allowance stops, but their health insurance coverage continues. That means employees can keep their plan even if their employment status changes.  

Ultimately, the CHOICE Arrangement program is designed to provide cost control for employers and greater flexibility in coverage options for employees.  

What makes a CHOICE Arrangement a good fit?

A CHOICE Arrangement can be a strong fit for organizations with diverse workforces or workforces scattered across a broad geographical area. Rather than the one-size-fits-all approach often deployed with traditional group coverage, a CHOICE Arrangement allows employees to choose the right plan for their personal needs. Flexibility is one of the program’s biggest advantages. This arrangement is scalable and can be adapted for multi-state or remote workforces.  

A CHOICE Arrangement may also be a good option for employers looking to create more certainty around their healthcare costs. With many challenges in the traditional group insurance market, a CHOICE Arrangement can offer stability, giving organizations the ability to establish their own contribution limits.  

Introducing a CHOICE Arrangement represents a significant change in the way an organization administers benefits. That’s why it’s important to have an experienced advisor who can simplify the process for employers and employees.      

The ezICHRA CHOICE advantage

Administration can be one of the biggest challenges to implementing a CHOICE Arrangement. Many models require employees to purchase coverage using their own dollars and request reimbursement. Additionally, employers must be mindful of compliance requirements so their plan aligns with federal regulations. Without the right processes in place, it can be challenging to keep track of this information.  

Our ezICHRA CHOICE team assists organizations of all sizes with building compliant plans that fit their culture and needs. The Premium Payment Manager platform simplifies CHOICE Arrangement administration by allowing employees to pay their monthly premiums and request reimbursement, keeping the process seamless.  

Throughout the process, the ezICHRA CHOICE team will be there to support your employees. A dedicated ezICHRA CHOICE plan advisor will work with each employee to help them select and enroll in a plan suited to their needs. Employees can reach out to the ezICHRA CHOICE team at any point throughout the year with claims questions, network assistance, or anything related to their policy.  

Further, employees gain access to a portal containing the information necessary to make a plan selection, such as the monthly premiums and plan structure of options in their area. This personalized approach is what makes ezICHRA a knowledgeable advisor that can support your team with your CHOICE Arrangement needs.  

There is no one-size-fits-all approach to benefits. Let us help you determine if a CHOICE Arrangement makes sense for your needs.  

Explore whether CHOICE is right for your organization

Considering a different approach to employee health benefits? Fill out the form below to connect with the ezICHRA CHOICE team and discuss how a CHOICE Arrangement could fit your workforce, budget and benefits strategy.