ICHRA is now the CHOICE Arrangement: What you need to know

On September 3, 2026, the Centers for Medicare & Medicaid Services (CMS) and the Small Business Administration (SBA) announced that the individual coverage health reimbursement arrangement (ICHRA) is now the CHOICE Arrangement.

This article will break down the ICHRA rebrand and what benefits consultants and employers need to know about this change.

What is the CHOICE Arrangement?

The CHOICE Arrangement, formerly known as ICHRA, is an employer-funded health benefit. It allows employers to give their employees a tax-free contribution for their qualified individual health insurance premiums¹.

For decades, employers have relied on traditional group health insurance plans to provide coverage and recruit and retain employees. However, rising costs have made it challenging to offer traditional group coverage. Employees also increasingly desire flexibility in their benefits.

The CHOICE Arrangement allows employees to choose the qualified individual health plans that best meet their needs while giving employers cost predictability.

What happened at the September 3, 2026 CMS and SBA event in Indiana?

Facilitated by Oscar Health, the federal government held the event at Hancock Health’s Hancock Wellness Center in New Palestine, Indiana. Hancock is a Remodel Health ICHRA client, and we were honored to help host the event and to be one of only two ICHRA partners in attendance².

Indiana was chosen as the backdrop for this event due to its long history of healthcare and insurance innovation and its status as the first state to create an ICHRA tax credit for small employers through HB 1004, which the state legislature passed in 2023.

“It’s fitting that the next chapter in the evolution of ICHRA is being announced here,” Austin Lehman, CEO of Remodel Health, said. “From pharmaceuticals and medical devices to health benefits, Indiana has repeatedly been a place where new ideas become real solutions.”

“It’s fitting that the next chapter in the evolution of ICHRA is being announced here. From pharmaceuticals and medical devices to health benefits, Indiana has repeatedly been a place where new ideas become real solutions.”

Austin Lehman

CEO, Remodel Health

Remodel Health participated in an ICHRA roundtable prior to the CHOICE Arrangement announcement

The event opened with a small group discussion of Indiana employers, small-business advocates, and health insurance market leaders about ICHRA and its impact. Hancock Health shared how offering an ICHRA through Remodel Health has impacted their organization and contributed to their employees’ overall health.

Remodel Health CEO Austin Lehman and Senior Vice President of Carrier Relations Jon Whitmer participated in this discussion alongside CMS Administrator Dr. Mehmet Oz, SBA Administrator Kelly Loeffler, U.S. Senator Jim Banks, and Indiana Secretary of Health and Family Services Dr. Gloria Sachdev, among others.

We were the only ICHRA vendor invited to participate in the discussion itself. We shared examples of how ICHRA has positively impacted our customers and answered questions from government officials about the benefit.

“We had a small group conversation where Hancock got to tell their ICHRA story directly with Administrator Loeffler and Dr. Oz,” Whitmer said. “Andrew Loehr, who partnered with Remodel Health to bring an ICHRA to Hancock, shared with them how Gallagher is utilizing the ICHRA model for other hospitals and clients. We were also able to share real examples of how ICHRA is solving problems that employers all around the country are facing with their health benefit offerings.”

Remodel Health representatives pose with CMS Administrator Dr. Oz, SBA Administrator Loeffler, Indiana Secretary of Health and Family Services Dr. Sachdev during the CHOICE Arrangement announcement. From left to right: Remodel Health Chief Marketing Officer Andy Clark, Remodel Health Chief Customer Officer Johnna Barnard, Administrator Loeffler, Administrator Dr. Oz, Secretary Dr. Sachdev, U.S. Representative Victoria Spartz, Remodel Health Senior VP of Carrier Relations Jon Whitmer, Remodel Health Chief Revenue Officer Chris Reuter, and Remodel Health CEO Austin Lehman.

CMS and the SBA announce the CHOICE Arrangement during a press conference at Hancock Wellness Center

Following the roundtable discussion, CMS and the SBA held a press briefing to announce the renaming of ICHRA as the CHOICE Arrangement.

Administrator Loeffler kicked off the press conference by introducing the CHOICE Arrangement. She thanked Remodel Health, Oscar Health, and government leaders for participating in the roundtable discussion, and explained that she’s heard from small businesses across the country, including in Indiana, about healthcare costs crushing them.

“I always say, ‘What’s your biggest challenge,’ and without hesitation, they say it’s finding that skilled workforce,” Loeffler told the audience. “They always show me the wall that they’re going to punch out and expand and then add equipment and add employees. But then they say quietly, ‘You know, the healthcare costs are crushing me. I may not be able to continue to offer healthcare.’”

Loeffler shared that all of this changes with the CHOICE Arrangement.

“This is purely about affordability,” Dr. Oz said during the press conference. “We want to offer more options to hardworking businesses who know that their employees are the most important asset they have. To be able to make sure those employees are all taken care of.”

Dr. Oz asked what happens when small businesses can’t afford to keep paying for their employees' group health insurance plans. They have to have difficult conversations with their employees. Now, the CHOICE Arrangement provides them with another option. He also remarked that the CHOICE Arrangement should have happened a long time ago.

“When the Obamacare exchanges were first crafted, there was the thought that you would let small businesses put their employees, if they wanted to, into the exchanges,” Dr. Oz said. “You didn’t just have to have individuals coming in and taking government subsidies; you had opportunities for businesses to put the money in people’s pockets.”

When asked whether there are steps the federal government can take to incentivize more businesses to use the CHOICE Arrangement, Dr. Oz said the most important thing the industry can do is demystify the process.

“That’s being done by Oscar, one of the insurance companies joining us today, [and] Remodel Health, who has been rolling out this program to about 5,000 businesses,” Dr. Oz said. “There are tens of thousands that have begun to use these programs. So, you’re not alone when you try. But it’s nice to have someone that’s trustworthy and competent and capable, that can hold your hand through the initial process.”

CMS also provided a one-pager explaining the new CHOICE Arrangements and a QR code linking to a webpage about the benefit.

They provided the following steps to get started with CHOICE Arrangements:

1. Learn the basic structure of CHOICE Arrangements
2. Estimate your costs and see if it’s a good fit for your workforce
3. Connect with a broker or third-party administrator (TPA) to see how they can support you in evaluating this arrangement
4. Visit CMS’s new webpage: it provides helpful information, including an overview of CHOICE Arrangements, a cost and contribution calculator, and a list of CHOICE Arrangement vendors (including Remodel Health)³

CMS Administrator Dr. Oz answers audience questions about the CHOICE Arrangement. Photo: Remodel Health.

Potential future tax credit enhancements in Indiana

During the Q&A portion of the press conference, Indiana Secretary of Health and Family Services Dr. Gloria Sachdev shared that Indiana’s first-in-the-nation ICHRA tax credit wasn’t working as planned when it first became available in 2024, but the government had improved it in 2026 and was looking into further enhancements.

“We fixed it to allow S corps and LLCs and other businesses that are typically smaller and licensed like that to apply for it,” Dr. Sachdev said. “We just had a wonderful roundtable discussion, and one of the policy ideas that came to my head was that we could potentially take that $400, the tax benefit that’s in there, and make it retroactive to 2024 [for those employers].”

Remodel Health is following this conversation closely and will provide updates if this change occurs.

Why change the name of ICHRA to CHOICE?

While CMS didn’t publicize an official reason for the change, it’s no secret that ICHRA has never quite rolled off the tongue. Most in the industry say it as a word, like “ick,” and plenty of benefits consultants and employees alike have joked about how the acronym is a bit awkward to bring up in conversation. CHOICE Arrangement solves that. It’s self-explanatory and much easier to say out loud to an employer or employee who hasn’t ever heard of it before.

"CHOICE gives employers another option — instead of funding a plan, they get to fund their people,” Whitmer said. “It’s a name that finally captures what this benefit has always been about: giving employees the power to choose their own coverage.”

Whitmer explained that the name is fitting because the benefit gives employers another way to provide health coverage when they may not have realized they had other choices when faced with steep rate increases year after year. It also gives employees the choice to buy the health coverage that best fits their needs.

"CHOICE gives employers another option — instead of funding a plan, they get to fund their people. It’s a name that finally captures what this benefit has always been about: giving employees the power to choose their own coverage.”

Jon Whitmer

Senior VP of Carrier Relations, Remodel Health

Is this the same as the congressional bills to codify ICHRA as the CHOICE Arrangement?

No, the CMS announcement isn’t the same as previous attempts by Congress to codify ICHRA as the CHOICE Arrangement. The September 3, 2026, change is a renaming of ICHRA to the CHOICE Arrangement, while keeping all the same regulations as before.

The stalled 2025 legislative bills would have added federal tax credits and other changes to the benefit. Should any of those bills pass, they’d rename ICHRA to the Custom Health Option and Individual Care Expense Arrangement. However, those bills haven’t cleared both chambers of Congress. For now, the CHOICE Arrangement is just a new way of talking about ICHRA.

How Remodel Health can help you offer a CHOICE Arrangement to your clients or employees

ICHRA’s renaming to the CHOICE Arrangement comes after years of growing momentum behind defined contribution health benefits. Remodel Health was proud to represent employers, benefits consultants, and the entire ICHRA industry in the room as it happened.

While the name has changed, nothing about the benefit changes operationally right now. The rules, structure, and value it provides to employers and employees remain the same, just under a name that’s easier to understand. We’re continuing to track any additional guidance or changes from the federal government.

Curious what the CHOICE Arrangement could look like for your organization or clients? Talk to our team to see how it compares to your current health benefits strategy.

References

1. CMS - Employer Initiatives - CHOICE Arrangements: A Guide for Employers
2. Information and quotes in this article were contributed by Remodel Health staff who participated in and helped host the CMS and SBA announcement event at Hancock Wellness Center. Press conference quotes were captured firsthand by Remodel Health team members during the event.
3. TPAs available to help employers access CHOICE