Can health insurance premiums increase because of claims?

Yes, for certain types of group health plans. An insurance company can consider a group’s claims experience when setting rates for some fully-insured large-group plans, while claims directly affect costs for self-funded plans. However, ACA-compliant individual and SHOP plans can’t use employer claims history to determine premiums.

Can an employer’s health insurance premium go up at renewal?

Yes. Group health insurance premiums can change at renewal based on factors such as healthcare costs, utilization, the group’s risk profile, and, for plans subject to experience rating, the group’s claims history. Employers commonly review these changes during their annual renewal period.

Does an employee with high medical claims increase everyone’s health insurance premiums?

Potentially. For a fully-insured group plan subject to experience rating, high-cost claims can result in premium increases for the whole group. In a self-funded plan, high claims can directly increase the employer’s claims expenses and may affect future stop-loss costs. Insurers can’t charge an individual employee a higher premium because of their personal medical history.

How can employers reduce health insurance costs after a high-claims year?

Employers can compare alternative plan designs, evaluate level-funded or self-funded options where appropriate, review stop-loss coverage, or consider an HRA such as a QSEHRA or CHOICE Arrangement (formerly ICHRA). An HRA can give employers more predictable costs because the employer sets a defined contribution amount, known as an allowance, rather than assuming the claims risk of a traditional group plan.

Is a CHOICE Arrangement a good alternative to group health insurance?

A CHOICE Arrangement, formerly known as ICHRA, can be a useful alternative for employers that want more predictable healthcare costs and less exposure to group claims. Instead of sponsoring traditional group coverage, the employer provides their employees with a fixed monthly allowance that they can use to purchase individual health coverage and qualified expenses. This allows employers to control their budget and gives employees the freedom to choose their own health plan.

What is an ICHRA provider?

An ICHRA provider helps employers set up and manage a CHOICE Arrangement, previously called an individual coverage health reimbursement arrangement. Depending on the provider, services may include plan design, compliance support, employee enrollment, reimbursement administration, and ongoing benefits support.

What’s the difference between Remodel Health and PeopleKeep?

Remodel Health is the largest ICHRA/CHOICE Arrangement partner by revenue and team size. It offers end-to-end ICHRA administration. Remodel Health is a great option for employers seeking a full-service ICHRA partner for hands-on benefits strategy, implementation, employee support, and ongoing administration. PeopleKeep is a product line of Remodel Health primarily for small businesses looking for straightforward, software-driven HRA administration.

How much does an ICHRA administrator cost?

ICHRA administration costs vary by provider and typically depend on factors such as the number of employees, services included, and level of support. When comparing providers, look beyond the upfront price and consider what’s included in the overall cost.

Why did CMS and the SBA rename ICHRA to the CHOICE Arrangement?

CMS and the SBA didn’t provide an official reason for the change during the announcement. However, many in the industry have long asked for a change due to how the ICHRA acronym is pronounced (it sounds like “ick”). The long, jargon-filled name didn’t clearly explain the value the benefit brings to employers and employees. CHOICE Arrangement does.

Does this change anything about my current ICHRA plan, budget, or strategy?

No. The renaming of ICHRA to the CHOICE Arrangement doesn’t impact current ICHRA benefits or the underlying regulatory framework. We’ll be communicating with customers and their employees about the name change for the sake of clarity, but there are no changes needed at this time.

As an employer offering an ICHRA, do I need to do anything right now?

No, there’s nothing that you need to do right now. PeopleKeep by Remodel Health will be sending out communications to customers about the name change, but CMS and the SBA haven’t made any changes to how the benefit functions.

Does this affect QSEHRA?

No, the rebrand of ICHRA to the CHOICE Arrangement doesn’t impact the qualified small employer HRA (QSEHRA). Congress created the QSEHRA, whereas federal regulations created ICHRA. The CMS and SBA announcement only impacts ICHRA.

Should a small business choose the CHOICE Arrangement or QSEHRA?

Both the CHOICE Arrangement and the QSEHRA are excellent fits for small businesses. The best option for your organization comes down to your business needs and employee demographics. A QSEHRA is a simple way to offer health benefits for those with fewer than 50 FTEs, but it lacks the customization options the CHOICE Arrangements provides, such as employee classes. You can learn more about the difference in our ICHRA vs. QSEHRA page.

Was ICHRA renamed CHOICE?

Yes, CMS and the SBA announced that ICHRA is now called the CHOICE Arrangement during an event at Hancock Wellness Center in New Palestine, Indiana, on September 3, 2026. Remodel Health representatives were invited to participate in this announcement.

How does ICHRA’s renaming impact the benefit?

CMS renaming ICHRA as the CHOICE Arrangement should have little to no impact on how the ICHRA functions. The CMS and SBA announcement only shared a rebrand without new features, though additional changes could be on the way. The same Final Rules that currently apply to ICHRA still apply to the CHOICE Arrangement.

Should I start referring to ICHRA as the CHOICE Arrangement in communications with clients or employees?

Yes, we recommend using the new name and explaining that it was formerly called ICHRA in any conversations with clients or employees. Since the federal government is officially retiring the ICHRA name, it’s best to start using the CHOICE Arrangement in practice. However, we predict that both terms will be used interchangeably for the foreseeable future.

Do I need to update my plan documents right now?

CMS hasn’t shared any compliance deadlines for plan documents due to the rename.

Does this affect ACA employer shared responsibility provision compliance?

CMS did not announce any changes to affordability or minimum value rules for CHOICE Arrangements, previously known as ICHRA. The underlying compliance framework remains unchanged.

Does the CHOICE Arrangement impact QSEHRA?

No, ICHRA becoming CHOICE doesn’t impact the qualified small employer health reimbursement arrangement (QSEHRA). The QSEHRA is a stand-alone HRA for small businesses with fewer than 50 full-time equivalent employees (FTEs). Since Congress created QSEHRA, CMS’s actions don’t impact the benefit. It only applies to ICHRA.

When does this change to CHOICE take effect?

ICHRA became the CHOICE Arrangement immediately after the announcement. However, it will take time for the general public to stop using the ICHRA name in favor of CHOICE.

Did the CHOICE Arrangement replace ICHRA?

The CHOICE Arrangement replaced the ICHRA name as of September 3, 2026. All ICHRA rules remain unchanged under the CHOICE Arrangement. If you already offer an ICHRA, you shouldn’t experience any disruption to your benefits.

Does the CHOICE Arrangement change how ICHRA works?

No. There are no immediate changes to the ICHRA with the new CHOICE Arrangement name.

Are employers required to switch from ICHRA to the CHOICE Arrangement?

No. The ICHRA final rules remain intact, so ICHRA plans that are current as of January 1, 2026, will continue to exist for the duration of their plan year. There’s no need for midyear changes or readoption. The federal government has simply rebranded ICHRA as the CHOICE Arrangement. Operationally, the two benefits are identical. Any additional requirements or enhancements would apply prospectively and would likely be implemented through future regulatory guidance.

Is ICHRA software enough to administer an ICHRA?

It can be, depending on your team's resources and the software provider's capabilities. ICHRA software can automate many administrative tasks, but your team may still be responsible for plan setup, employee questions, compliance, documentation, and ongoing administration. Employers with experienced benefits staff may be comfortable managing these responsibilities internally.

Is full-service ICHRA administration more expensive than software?

Full-service administration typically costs more than software alone because you're paying for both technology and professional support. However, the total cost should also account for the time your internal team spends managing the ICHRA. For growing companies with lean HR teams, outsourcing more administrative tasks can reduce internal workload and free up time for other priorities.

Is full-service ICHRA administration better for growing companies?

Full-service administration can be a strong fit for growing companies because ICHRA administration can become more complex as an organization adds employees, expands into new states, or develops more nuanced benefits strategies. Having technology and dedicated benefits professionals can help employers scale their ICHRA without putting all of the additional administrative work on their HR team.

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Interested in learning more?

Expert insights at your fingertips.

What to do if high claims are driving up your group health insurance costs

Best ICHRA vendors: A look at popular ICHRA administrators

What is the CHOICE Arrangement? ICHRA's new name explained

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

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ICHRA software vs. full-service ICHRA administration

Earning Accolades in Health Innovation

Remodel Health
601 S. Meridian St.
Indianapolis, IN 46225

Interested in learning more?

Expert insights at your fingertips.

What to do if high claims are driving up your group health insurance costs

Best ICHRA vendors: A look at popular ICHRA administrators

What is the CHOICE Arrangement? ICHRA's new name explained

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

What is the CHOICE Arrangement?

ICHRA software vs. full-service ICHRA administration

Earning Accolades in Health Innovation

Remodel Health601 S. Meridian St.Indianapolis, IN 46225

Remodel Health
601 S. Meridian St.
Indianapolis, IN 46225