By Elizabeth Walker on Nov 5, 2026, 9:14:35 AM
The Centers for Medicare & Medicaid Services (CMS) and the Small Business Administration (SBA) announced on September 3, 2026, that the individual coverage health reimbursement arrangement (ICHRA) is now called the CHOICE Arrangement1. With a big change like this, you probably have questions about how it affects you.
The good news? This is simply a name change, not a new health benefit. Whether you're an employer considering a CHOICE Arrangement or a benefits consultant advising clients, we’ll walk you through what this means for you.
What to know:
- CHOICE Arrangement is the new federal name for the individual coverage health reimbursement arrangement (ICHRA), announced by CMS and SBA on September 3, 2026. The official regulatory name remains ICHRA.
- The announcement changes the terminology, not the underlying benefit or its existing federal requirements. As of now, the 2019 ICHRA final rules still apply.
- Employers, benefits consultants, and current Remodel Health customers don't need to redesign their benefits or take immediate action because of the rename.
General FAQs
Whether you're hearing about CHOICE Arrangements for the first time or have been familiar with ICHRAs for years, this section explains what changed, what stayed the same, and what to expect next.
What is the CHOICE Arrangement?
A CHOICE Arrangement is an employer-funded health benefit that allows employees to use tax-free employer contributions toward qualified individual health insurance premiums. Depending on the employer’s plan design, a CHOICE Arrangement may also cover eligible out-of-pocket medical expenses under Internal Revenue Code Section 213(d).
Instead of a traditional group healthcare plan, employees choose and enroll in qualifying individual health coverage. Then, they use their employer’s defined contribution amount to pay for their monthly premiums.
Is the CHOICE Arrangement the same as ICHRA?
Yes. A CHOICE Arrangement is the same health benefit previously known as an ICHRA. While CMS and SBA adopted CHOICE Arrangement as the new name for the existing ICHRA model, the underlying benefit structure and rules currently remain the same2. However, CMS has submitted proposed new rules for the benefit to the White House for review. Should anything change, Remodel Health will update this guide.
When did ICHRA become the CHOICE Arrangement?
CMS and SBA announced the new name on September 3, 2026, during an event facilitated by Oscar Health at Hancock Health in New Palestine, Indiana. In addition to the new name, CMS, SBA, and other industry leaders introduced new educational resources during the event and discussion to help employers understand and implement the benefit effectively. Remodel Health participated in the event and attended the roundtable, with CEO Austin Lehman on stage for the announcement.
Do I need to start using the new name right away?
Employers and broker consultants can begin using CHOICE Arrangement in their marketing, benefits education, and conversations with employees. However, there's no need to replace ICHRA terminology in existing legal documents or change plans because of the announcement. Using both CHOICE Arrangement and ICHRA during the transition can help avoid confusion for those not used to the new name yet. For legal documents, the regulatory name of the benefit remains ICHRA for now.
Will ICHRA still be used, or is the name retired completely?
ICHRA isn't disappearing from federal regulations or existing benefits documentation. You'll continue seeing the term in regulatory guidance, plan documents, contracts, and industry resources. Using both terms together helps employers and employees recognize that they're referring to the same benefit.
Is the CHOICE Arrangement a new law or a new federal program?
No. The September 3, 2026 announcement introduced new branding and federal educational resources for an existing health benefit. ICHRAs were established through federal regulations finalized in 2019 and became available beginning in 2020. The name change itself did not establish a new benefit or replace the ICHRA final rules3.
Is the CHOICE Arrangement the same as the CHOICE Arrangement bill in Congress?
No, the CMS and SBA CHOICE Arrangement rebrand is not the same as previous CHOICE Arrangement bills. The federal naming announcement is separate from congressional proposals to codify and modify the existing ICHRA framework.
For example, H.R. 6703, which aimed to codify ICHRAs into federal statute, passed the House in December 2025, but it remains pending in the Senate4. S. 2875 was introduced in the Senate on September 18, 2025, and is also still pending5. This means neither proposal has become law, and the September 2026 announcement didn’t enact their proposed legislative changes.
What does CHOICE stand for?
A CMS training resource mentions that CHOICE in CHOICE Arrangement stands for “Custom Health Option and Individual Care Expense.”6 There are a few other ICHRA administrators and insurance carriers who refer to this name as well. This name comes from a proposed Congressional bill.
However, during the CMS and SBA Announcement on September 3, 2026, there was no mention of CHOICE Arrangement being an acronym. While the federal government may announce this later along with further rule changes, for now, the term is simply CHOICE Arrangement.
Is the CHOICE Arrangement available in every state?
Yes. CHOICE Arrangements are available in all 50 states and D.C. to companies of all sizes and industries. Employers can offer them to eligible employees regardless of whether they have a hybrid or remote workforce that doesn’t all live and work in the same location. However, individual health insurance options, premiums, and provider networks vary by location.
How is the CHOICE Arrangement different from a group health plan?
With traditional group coverage, the employer chooses the insurance plans to offer their employees and their dependents. Employers typically pay a larger portion of employees’ premiums, and employees contribute the remainder through payroll deductions. Group plans typically come with annual premium hikes and participation requirements.
With a CHOICE Arrangement, the employer sets a monthly contribution amount, and employees select their own individual health insurance coverage. They then use their employer’s contribution to pay the monthly premium. This gives employees more flexibility while helping employers maintain predictable cost control.
Is the CHOICE Arrangement a type of HRA?
Yes. A CHOICE Arrangement is a type of health reimbursement arrangement (HRA) that allows employers to contribute tax-free funds toward employees' individual health insurance premiums and, depending on the plan design, other qualified medical expenses. It's the new name for the individual coverage HRA, or ICHRA.
What is RIN 0938-AW00, and how does it relate to this rename?
RIN 0938-AW00 is a separate proposed CMS rule titled “Expanding Access to Individual Coverage Health Reimbursement Arrangements.”7 It aims to clarify and streamline administrative requirements for ICHRAs, primarily making it easier for employers to offer health coverage through reimbursements.
As of October 2026, it’s listed as a proposed rule pending regulatory review. It’s separate from the September 3 branding announcement.
Do the 2019 ICHRA final rules still apply to the CHOICE Arrangement?
Yes. The 2019 final rules established the individual coverage HRA framework, and the September 2026 announcement did not replace those requirements. Employers must continue following the existing rules for eligibility, qualified coverage, notices, affordability, and other compliance responsibilities. Additionally, applicable large employers (ALEs) with a CHOICE Arrangement are still subject to the ACA's employer mandate.
Was Remodel Health involved in this announcement?
Yes. The September 3, 2026 announcement took place at Hancock Health, a Remodel Health customer. Remodel Health leadership attended as a co-host and was one of only two ICHRA vendors present. At the event, Remodel Health CEO Austin Lehman shared the company's perspective on Indiana's role in healthcare innovation and the future of employer-sponsored health benefits.
CHOICE Arrangement FAQs for benefits consultants
For benefits consultants and brokers, the rename is mainly about terminology education. Below are some questions you may have and how you can communicate the changes to your clients without confusion.
How should I explain this rename to my clients?
Explain that CMS and SBA have given the ICHRA a new name: the CHOICE Arrangement. The benefit itself hasn't changed, and existing federal requirements still apply. You can use both terms together, particularly when speaking with clients who already know how the ICHRA works.
How does this affect ongoing ICHRA implementations?
The rename doesn't require you to restart implementations, change enrollment timelines, or redesign plan documents. Continue following the established implementation process, including employee eligibility, setting contribution amounts, employee classes, substantiation, required notices, and other compliance requirements.
Will this affect how I position CHOICE Arrangement versus traditional group plans?
No. The differences between ICHRAs and group health plans remain the same. You can continue positioning CHOICE Arrangements to your clients as a way to achieve predictable healthcare budgets, give employees more choice over their health coverage, and gain unmatched flexibility with long-term benefit stability.
CHOICE Arrangement FAQs for Remodel Health customers
If you currently offer an ICHRA through Remodel Health, the most important thing to know is that the rename doesn't change your existing benefit. Here's what current customers should understand about their plans, compliance responsibilities, and next steps.
Do I need to do anything right now because of this rename?
No. You don't need to take any immediate action because ICHRA is now called CHOICE Arrangement. Your existing benefit strategy remains the same, and you can continue administering it as usual. As always, Remodel Health will guide you through any specific updates that become necessary.
Will my current ICHRA plan continue without interruption?
Yes. Your existing CHOICE Arrangement (formerly ICHRA) will continue under its current plan design. The name change doesn't cancel your benefit, trigger a new enrollment period, or require employees to select new coverage.
Does this affect my compliance obligations?
No. The existing federal ICHRA requirements still apply. You must continue meeting applicable requirements for legal plan documents, individual coverage verification, eligibility, affordability, nondiscrimination rules, and reporting. The new name doesn't eliminate or change your responsibilities under the current federal rules.
Does this impact my existing contribution strategy or employee classes?
No. You can maintain your current contribution strategy and employee classes. The existing customization options and rules, regarding monthly allowance amounts, permitted employee classes, age-based differences, and family-size adjustments continue to apply.
Should I communicate this name change to my employees, and how?
It's a good idea to explain the new terminology so employees recognize CHOICE Arrangement when they encounter it in federal resources or benefits communications and don’t get confused.
Here’s an example of a simple message you can use: "Our individual coverage health reimbursement arrangement (ICHRA) is now also called a CHOICE Arrangement. This is a name change only. Your current health benefit and coverage remain the same, and no action is required because of the rename."
Will Remodel Health handle this transition for me?
Remodel Health is incorporating the CHOICE Arrangement terminology into its educational resources and communications. If you think you need any updates to your specific plan documents, notices, or account materials, your Remodel Health account manager can guide you through what needs to change and what can stay the same.
Conclusion
The transition from ICHRA to CHOICE Arrangement gives an already established health benefit a new, more memorable name. But employers and brokers don't need to worry, because the benefit works the same way as before: employers set contribution amounts, employees choose their individual coverage, and everyone receives tax advantages.
It’s always possible that federal compliance requirements and other aspects of the benefit will change in the future. By partnering with Remodel Health, we’ll help you stay updated on regulations and ensure your CHOICE Arrangement design supports you and your employees, even if benefit rules change later.
References
1. SBA Recognizes Innovative CHOICE Arrangements as Major Win for Small Businesses
2. CMS Employer Initiatives: Choice Arrangements
3. 2019 ICHRA Final Rules
4. H.R.6703 - Lower Health Care Premiums for All Americans Act
5. S.2875 - CHOICE Act
6. CMS Health Coverage Basics training materials
7. RIN: 0938-AW00
