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CHOICE Arrangements in Pennsylvania

Pennsylvania is known for its strong labor market and large, diverse workforce. While they have a well-established individual market and multiple carriers serving different regions of the state, employers are increasingly facing challenges due to rising group plan costs. Luckily, the CHOICE Arrangement, formerly known as the individual coverage health reimbursement arrangement (ICHRA), offers a way to provide competitive health benefits while giving employees more choice over their medical coverage.

Remodel Health is here to help Pennsylvania employers and brokers design, implement, and manage their CHOICE Arrangements so they can keep costs low, comply with federal regulations, and satisfy their employees all year-round.

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CHOICE in Pennsylvania

Why Pennsylvania employers are rethinking traditional group health benefits

Employer-sponsored group health insurance continues to put financial pressure on Pennsylvania business owners. According to KFF, the national average premium for family coverage reached almost $27,000 in 2025, up 6% since 2024 and 26% over the past five years1. Smaller businesses with 10 to 199 employees paid more than you’d expect, contributing an average of $17,165 toward family coverage in 2025, which can be cost-prohibitive for many businesses.

Outside national averages, Pennsylvania's own small-group market is also seeing a rise in premiums. For 2026, state insurers initially requested an average 13.1% rate increase (or $50.1 million) in small-group premiums. Ultimately, the Pennsylvania Insurance Department approved an average 12.7% increase2.

Simply put, group plans aren’t the go-to option for employers anymore. As well as being financially out of reach, traditional group coverage makes it difficult to meet the needs of a workforce spread across Pennsylvania's different healthcare markets. But with the CHOICE Arrangement, employers can set defined contribution amounts and allow employees to choose the qualified individual health plans that best suit their location and personal health needs.

Chapter 1: How does the CHOICE Arrangement work for Pennsylvania employers?
     
Chapter 1

How does the CHOICE Arrangement work for Pennsylvania employers?

A CHOICE Arrangement is a tax-advantaged, personalized health benefit. Rather than choosing a single group health plan, employers give employees a fixed amount of tax-free money, or defined contribution, that they can use to pay for individual health insurance premiums.

Employers can design their CHOICE Arrangement to vary contributions by legitimate employee classes, including geographic location, age, and family status. This gives employers greater control over their budget while giving employees more flexibility and choice over their coverage.

Employees must enroll in a qualifying individual health plan that provides minimum essential coverage (MEC). In Pennsylvania, employees can use Pennie, the state's official health insurance Marketplace, or a private exchange to shop for an eligible plan that includes their preferred doctors, facilities, prescriptions, and covered services3.

By working with Remodel Health, employees can enroll in coverage through their Remodel Health accounts. Those with complex medical situations also have access to licensed Benefit Advisors who can walk them through their options.

Once employees enroll in qualified plans, they can apply their CHOICE Arrangement contributions toward their monthly health insurance premiums. For Pennsylvania employers with employees of different ages, health needs, and locations, the flexibility a CHOICE Arrangement provides helps them offer a comprehensive benefit that works for everyone, regardless of budget.

   
Chapter 2

Why does the CHOICE Arrangement support Pennsylvania employers and employees?

Pennsylvania has several characteristics that make it well-suited for a CHOICE Arrangement, which is why the employee benefit is becoming increasingly attractive within the state. With the right benefit design, employers can use the CHOICE Arrangement to better meet their employees' unique needs without blowing their budget. 

A diverse insurance carrier landscape

Pennsylvania’s healthcare market is regionally based, so where you live matters. The Pennsylvania Insurance Department's 2027 coverage area shows how individual insurance plans are spread across the state4. For example, Highmark's individual plans are available in most of Pennsylvania, while UPMC, Geisinger, Oscar, and Ambetter policies vary by location.

These regional differences can be beneficial for those offering a CHOICE Arrangement, as each employee can shop for individual coverage available in their local market, which may be better tailored to their specific needs and provide access to their preferred providers.

A cost-controlled benefit

According to Remodel Health's 2026 National ICHRA Report, Pennsylvania employers contribute an average of:

Self-only comptab-infoalt7-icon
Married employees comptab-infoalt7-icon
Married employees comptab-infoalt7-icon
Married employees with dependents comptab-infoalt7-icon
Average monthly ICHRA contribution
$632 per month
$913 per month
$1,127 per month
$1,283 per month

Nine rating areas create opportunities for more precise contributions

Pennsylvania is divided into nine ACA geographic rating areas, covering everything from Erie to Philadelphia5. Premiums can vary by rating area, and the plans available to employees can vary significantly from one region to another.

Employers can customize their CHOICE Arrangement to account for these geographic differences. They can use the geographic employee class to establish different allowances for employees in different locations, ensuring each employee has a sufficient contribution amount to buy affordable coverage where they actually live. This strategy is especially useful for business owners with remote employees or distributed workforces across the state.

Pennsylvania is divided into nine ACA geographic rating areas, covering everything from Erie to Philadelphia5. Premiums can vary by rating area, and the plans available to employees can vary significantly from one region to another.

Employers can customize their CHOICE Arrangement to account for these geographic differences. They can use the geographic employee class to establish different allowances for employees in different locations, ensuring each employee has a sufficient contribution amount to buy affordable coverage where they actually live. This strategy is especially useful for business owners with remote employees or distributed workforces across the state.

Strong competition and meaningful plan choice

Pennsylvania's individual market is highly competitive. Individual insurance carriers include Capital Advantage, Independence Blue Cross, Highmark, Keystone Health Plan East, and others. While this seems daunting, it’s actually a good thing.

Carrier competition gives employees more opportunities to find coverage in their area at an affordable price. It also makes Pennsylvania more attractive to employers looking to switch from limited group insurance coverage, which often offers only one or two plan options. 

  
Chapter 3

Pennsylvania individual market carriers and health plans for 2027

If you want to implement a CHOICE Arrangement at your company, your first step is understanding your state’s individual market. Pennsylvania’s individual market operates regionally, with prices varying widely, so knowing which carriers and plans are available where employees live is crucial when designing your CHOICE Arrangement and choosing a contribution strategy.

The following list highlights the carriers and individual plans available across Pennsylvania in 2027:

Insurance Company
On- or off-exchange
Ambetter Health of Pennsylvania
On- and off-exchange plans
Capital Blue Cross
On- and off-exchange plans
Geisinger Health Plan
On- and off-exchange plans
Geisinger Quality Options
On- and off-exchange plans
Health Partners of Philadelphia Inc.
On- and off-exchange plans
Highmark BlueCross BlueShield
On- and off-exchange plans
Independence Blue Cross (QCC Ins. Co.)
On- and off-exchange plans
Keystone Health Plan Central
Off-exchange plans
Keystone Health Plan East, Inc.
On- and off-exchange plans
Oscar Health Plan of Pennsylvania, Inc.
On- and off-exchange plans
Partners Insurance Company Inc.
On- and off-exchange plans
UPMC
On- and off-exchange plans

All table data from HealthCare.gov’s rate review6 

“Pennsylvania is a unique state in the ICHRA market because it was such an early adopter. Rich individual networks, recognizable carriers, and competitive costs all contribute to the success ICHRA has seen in PA.”
Nick Waskom_Remodel

Nick Waskom

Account Executive, Remodel Health

  
Chapter 4

ICHRA growth in Pennsylvania

CHOICE Pennsylvania 2

CHOICE Arrangement adoption continues to rise in popularity across the U.S. as employers look for alternatives to expensive traditional group health insurance coverage — and Pennsylvania is no exception.

The data below highlights the growth of CHOICE Arrangements, formerly known as ICHRA, in the Keystone State7:

  • 39% year-over-year growth among large employers from 2025 to 2026.
  • ICHRA adoption experienced 108% aggregate growth among large employers from January 2025 to January 2026.
  • ICHRA is up 99% in total aggregated growth from 2025 to 2026, with an increase of 6,382 employers.
  • As of January 2026, at least 261,000 employees participated in an ICHRA, with a total of 402,000 covered lives.
  • 124.9% year-over-year growth in ICHRA quoting in Pennsylvania via Ideon from 2024 to 20258.
  • According to our 2026 National ICHRA Report, Pennsylvania is a top-ten state for companies, members enrolled, and ICHRA quotes.
  
Chapter 5

Why Pennsylvania employers partner with Remodel Health

If you’re set on offering a CHOICE Arrangement, the last step is to find the right vendor to help you implement and manage your benefit. A successful CHOICE Arrangement requires proper plan design, employee education, enrollment support, and continuous administration — and you don’t want to make a mistake along the way.

Remodel Health is the nation's largest and most trusted CHOICE Arrangement/ICHRA administrator, which means Pennsylvania employers and brokers will have access to a team with deep knowledge of CHOICE Arrangements and the state’s individual insurance market.

With Remodel Health, employers get the following:

  • Plan design and implementation. We’ll help you develop a contribution strategy that aligns with your budget, workforce, and local market conditions. You’ll also receive a dedicated launch coordinator to guide you through implementation from start to finish.
  • Employee education and shopping assistance. Employees receive virtual or in-person education to help them understand their benefit and prepare for enrollment. They can shop for an eligible plan directly from their Remodel Health platform, and our team is available to help them compare plans based on their provider network, prescriptions, premiums, and out-of-pocket costs. Employees with challenging health needs can reach out to a licensed Benefits Advisor to help them choose the right plan.
  • ClearChoice. Every CHOICE Arrangement program includes ClearChoice, our premier benefits transformation and full-service model. Our licensed and dedicated team supports your entire organization through the full benefits cycle — not just the initial transition to the CHOICE Arrangement — with guidance and support throughout the plan year.
  • Compliance, administration, and technology. Simplify day-to-day benefits management with our employer-focused technology, which provides enrollment tracking, utilization data, and premium payment systems. To keep you compliant with federal regulations, we’ll also generate required notices and plan documents, provide ACA reporting support, and track other compliance requirements.
  • Payroll and HRIS system integrations. Remodel Health’s flagship CHOICE Arrangement administration platform connects directly with ADP, UKG, Paylocity, Workday, and Dayforce, with more than 200 additional connections available through Finch.
  • Employer and broker assistance. We provide ongoing account management for employers and give brokers the knowledge, support, and resources they need to design and properly maintain their clients’ CHOICE Arrangements.

For smaller Pennsylvania employers, Remodel Health’s PeopleKeep product line offers a simpler, tech-focused way to administer CHOICE Arrangements. The platform combines easy-to-use HRA administration software with plan documentation, claims and reimbursement support, and compliance tools.

With PeopleKeep, small employers have an easy, affordable way to offer competitive health benefits without the hassle.

“A big advantage of administering ICHRA in Pennsylvania for Remodel Health is the depth of carrier relationships throughout the state. The solution works on paper as a result of the competitive individual market, but in practice there are more nuances to navigate, such as application processing times and premium payments. Remodel Health has developed strong and trustworthy carrier relationships over the last 10 years, which ultimately improves the broker, employer, and member experience with ICHRA.”
Nick Waskom_Remodel

Nick Waskom

Account Executive, Remodel Health

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Chapter 6

See how Pennsylvanians are successfully using the CHOICE Arrangement

Pennsylvania employers and brokers are already using CHOICE Arrangements to rethink how they provide health benefits and manage rising group plan costs. Remodel Health helps employers navigate the transition from traditional coverage to a personalized CHOICE Arrangement, from contribution strategy to employee education to year-round administration.

Check out the case studies below to learn how Pennsylvania employers have implemented a CHOICE Arrangement with Remodel Health and the results they’ve seen since making the switch.

Remodel-Health-Staff-2025

Let’s talk through your ICHRA questions.

Navigating the health benefits landscape doesn’t have to be complicated. We’re here to guide you and your business every step of the way.

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Contributors:

Elizabeth W staff photo

Elizabeth Walker

Content Marketing Specialist

Sources:

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