Is an HMO or PPO better?

Neither plan is better for everyone. It depends on a person or family’s individual needs. An HMO may be a better fit if you want lower premiums and out-of-pocket costs and don’t mind using a smaller provider network. A PPO may be better if you want more provider flexibility, out-of-network coverage, and the ability to see specialists without referrals.

What is the main difference between an HMO and PPO?

The difference is flexibility. HMO plans generally require members to use in-network providers and get referrals from their primary care provider to see specialists. PPO plans offer a broader network, don’t require a PCP or specialist referrals, and cover some out-of-network care.

Is a PPO more expensive than an HMO?

Generally, yes. PPO plans typically have higher premiums and may have higher out-of-pocket costs than HMO plans. In 2025, the average annual group premium was $9,818 for self-only PPO coverage compared to $9,229 for self-only HMO coverage.

Can you see a specialist without a referral with a PPO?

Yes. PPO plans don’t require members to get a referral from a primary care provider before seeing a specialist. In contrast, HMO plans typically require a PCP referral for specialist care.

Can an HRA be used with an HMO or PPO?

Yes, CHOICE Arrangements, QSEHRAs, and GCHRAs can all work with HMO or PPO coverage. Depending on the HRA type, employees can use their tax-free HRA funds to help pay eligible healthcare expenses and, in some cases, individual health insurance premiums.

Is a CHOICE Arrangement better than a group health plan?

It depends on your organization's budget, workforce, and employees' needs. CHOICE Arrangements, formerly known as ICHRAs, can provide more flexibility and cost control, while group plans may be a better fit for employers who prefer traditional, employer-sponsored coverage.

Can an employer offer both a CHOICE Arrangement and a group health plan?

Yes. Employers can use employee classes to offer a group health plan to one class of employees and a CHOICE Arrangement to another, as long as they meet applicable eligibility and class requirements.

Can employees use premium tax credits with a CHOICE Arrangement?

Generally, no. Employees who participate in a CHOICE Arrangement can't receive premium tax credits for the same months. Depending on whether the CHOICE Arrangement is considered affordable, employees may have different options if they decline the arrangement.

What does an ICHRA provider do?

An ICHRA provider helps employers design, implement, and administer their individual coverage health reimbursement arrangement. Depending on the provider, services may include compliance support, employee enrollment assistance, plan selection tools, contribution management, reimbursement administration, payroll system or HRIS integrations, and ongoing customer support.

How do I choose an ICHRA vendor?

During ICHRA vendor selection, consider the level of administrative and compliance support, employee plan-selection and enrollment tools, technology integrations, broker support, customer service, and the provider's experience with businesses similar to yours. Employers should also consider whether they need a software-focused solution or a full-service ICHRA partner.

How much does it cost to administer an ICHRA?

ICHRA administration costs vary by provider and typically depend on factors such as the number of employees, services included, and level of support. Some providers primarily offer technology and automated administration, while others provide additional implementation, benefits advisory, compliance, and employee support services.

Can an employer switch ICHRA providers?

Yes. Employers can transition from one ICHRA provider to another. However, the change requires careful coordination to keep employee, contribution, plan, and reimbursement information accurate. Employers should work with their current and new providers to establish a transition timeline and communicate any changes to employees and brokers.

What are the largest individual health insurance companies?

For the 2026 Affordable Care Act (ACA) Marketplace, KFF identifies UnitedHealthcare, Centene Corporation, Oscar Health, Elevance Health, Molina Healthcare, Cigna Healthcare (exiting the market in 2027), and Kaiser Permanente among the major national participants. KFF reports that they operate in 30, 29, 20, 18, 14, 11, and 10 states, respectively.

Is Blue Cross Blue Shield an individual health insurance carrier?

Blue Cross Blue Shield is a system of independent, locally operated insurance companies rather than one nationwide carrier. Availability, networks, and plan designs vary by the specific Blue Cross Blue Shield company serving your area.

How do I find out which health insurance carriers are available in my area?

Visit HealthCare.gov or your state's health insurance exchange. Enter your location to see the plans and carriers currently available to you. CMS also provides Marketplace data showing insurer service areas by state, county, and ZIP code.

Can employees choose their own health insurance with a CHOICE Arrangement?

Yes. With a CHOICE Arrangement, employees receive employer-funded contributions that they can use toward individual health coverage. Rather than being limited to an employer-selected group plan, employees can select an individual plan that meets the benefit’s requirements and is available in their area.

Do individual health insurance carriers offer the same plans in every state?

No. Carriers can offer different plans, networks, premiums, and benefits by state and county. A carrier may also change its service area from one year to the next. KFF's 2026 Marketplace analysis documents substantial county-level changes in insurer participation.

Was ICHRA renamed to the CHOICE Arrangement?

Yes. On September 3, 2026, CMS and the SBA announced that individual coverage health reimbursement arrangements (ICHRAs) would now be called CHOICE Arrangements. The name change didn’t fundamentally change how the employee benefit works; the existing ICHRA framework remains in place under the new name. Employers and benefits professionals may still encounter the term ICHRA because it remains common in the health benefits landscape and existing plan materials.

Is a CHOICE Arrangement cheaper than traditional group health insurance?

A CHOICE Arrangement can help employers control and predict their health benefits spending because the employer determines the contribution amount rather than paying the premium for a specific group health plan. However, costs depend on the employer's contribution strategy, workforce demographics, locations, and individual insurance market. Remodel Health can help you design a compliant CHOICE Arrangement that fits your budget.

How does a CHOICE Arrangement work for employees?

Employees receiving a CHOICE Arrangement contribution shop for and enroll in qualifying individual health insurance coverage. They can compare plans based on factors such as premiums, deductibles, provider networks, prescriptions, and expected healthcare needs. The employer then provides the defined contribution that employees can use toward their monthly plan premiums.

Can an employer offer both a CHOICE Arrangement and a group health plan?

Yes, an employer may offer a CHOICE Arrangement and traditional group health insurance at the same time. But under federal rules, employers must ensure employees in a specific class can access only one type of benefit. You can’t give your staff within the same class a choice between the group plan and the CHOICE Arrangement. For example, an organization could structure its benefits so that hourly employees receive group coverage while salaried workers receive a CHOICE Arrangement.

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