Same benefit. New name. And, honestly, we’re not mad about it.
As of September 3, the Individual Coverage Health Reimbursement Arrangement (ICHRA) has a new name: CHOICE Arrangement.
The announcement was made during an event at Hancock Health in Indiana, where federal officials highlighted the model as a way for small businesses to offer employees more affordable and flexible health coverage. Check out the new CHOICE page on the CMS website.
CHOICE stands for Custom Health Option and Individual Care Expense. And we have to admit—it’s a pretty good fit. Because if there’s one thing ICHRA has always been about, it’s choice.
Instead of giving employees one or two group health plans and asking them to pick from what their employer offers, ICHRA gives employees the opportunity to shop for individual coverage that fits their needs. Employers set a defined contribution, and employees can use that money toward their own individual health insurance.
More plans. More flexibility. More control.
More choice.
But here’s the catch: Not much else changed
If the name CHOICE sounds familiar, there’s a reason.
In 2025, Congress was considering legislation that would have formally codified ICHRA in federal law under the CHOICE Arrangement name. The proposal would have done more than give ICHRA a new acronym; it would have established the arrangement in statute and included new tax incentives designed to encourage eligible small businesses to adopt it.
The legislation would have:
- Codified the 2019 rules allowing ICHRAs into federal law.
- Renamed ICHRAs as CHOICE Arrangements.
- Provided tax incentives for small businesses to offer CHOICE Arrangements.
- Incentivized coverage for approximately 350,000 employees.
The CHOICE provisions were included in the House version of the One Big Beautiful Bill Act, but they were ultimately removed during the Senate process. The bill passed and was signed into law in July 2025 without those ICHRA provisions.
In other words, CHOICE Arrangements are now officially here, but the bigger legislative changes that originally came with the name didn’t make it across the finish line.
So, for now, this is essentially a name change. The underlying benefit hasn’t suddenly been transformed by yesterday’s announcement.
And that’s okay with us.
We won’t miss ICHRA
Let’s be honest: Individual Coverage Health Reimbursement Arrangement was never exactly a name that rolled off the tongue.
CHOICE Arrangement? That’s a little easier.
More importantly, it actually communicates something meaningful about the benefit. Employers can give employees a defined amount of money toward coverage, while employees get more freedom to choose the health plan that works for them.
The name may have changed. The choice hasn’t.
And while we’ll gladly welcome any future legislation that gives CHOICE Arrangements a stronger foundation in federal law or provides additional incentives for employers, we don’t need a new law to recognize what already works about ICHRA.
So goodbye, ICHRA. 👋
Hello, CHOICE.
Learn more about CHOICE Arrangements on our ICHRA page.