ICHRA is now CHOICE: what Tri-Cities employers need to know

On September 3, 2026, the Centers for Medicare & Medicaid Services and the U.S. Small Business Administration announced a new name for the Individual Coverage Health Reimbursement Arrangement. The ICHRA is now the CHOICE Arrangement, short for Custom Health Option and Individual Care Expense Arrangement. If you are a Tri-Cities employer who has heard the term for the first time this month, here is what changed, what did not, and how to tell whether it is worth a conversation.

What changed: the name

That is the whole list. CHOICE is a rebrand, not a new benefit. The federal rules that have governed the arrangement since 2020 still apply, and the regulations themselves still use the ICHRA name, so you will see both terms for a while. Administration platforms, carriers, and agencies are writing "CHOICE Arrangement (formerly ICHRA)" during the transition, and so are we.

What did not change: how it works

• You set the budget. The employer chooses a monthly allowance for each class of employee, such as full-time and part-time, or salaried and hourly.
• Employees choose their coverage. Each participating employee enrolls in qualifying individual health insurance, or Medicare, that fits their doctors and their family.
• Reimbursements are tax-free when the arrangement is set up and administered correctly. Employees submit proof of premium; the business reimburses up to the allowance.
• Notice comes first. Employees generally receive a written notice at least 90 days before the plan year.
• Affordability still matters. An affordable offer affects whether an employee can also claim a Marketplace premium tax credit, and for employers with 50 or more full-time-equivalent employees it determines whether the arrangement satisfies the employer coverage requirement.

Why the SBA is involved

The SBA's part in the announcement is the real news for small businesses. The agency is now promoting CHOICE Arrangements directly to small employers as a way to offer health benefits with predictable costs, easier administration, and employee choice, without sponsoring a traditional group plan. Expect to hear about it from your bank, your chamber of commerce, and your CPA, not just from benefits people.

Who it tends to fit

In our experience across Johnson City, Kingsport, and Bristol, a CHOICE Arrangement is worth a look for:

• Small businesses offering health benefits for the first time on a budget they set
• Employers whose group renewals have become hard to plan around
• Companies with employees spread across counties or with very different needs
• Larger employers who want a compliant option for certain classes of workers

Some industries bring their own questions. We wrote short pages for hospitality, home health, staffing, and contractors and trades.

It tends not to fit a group whose employees are happy with a strong group plan at a price the owner can live with. If that is you, we will tell you to keep it.

What a fixed allowance does, and does not, do

A CHOICE Arrangement gives you control over what the business contributes. It does not freeze individual-market premiums, guarantee that employees pay less, or promise that the allowance needed to stay affordable will never rise. A good fit check puts the employer's numbers and the employees' side of the ledger next to each other so you can decide with both in view.

How FIG runs the process

We start with a fit check: your headcount, renewal date, current coverage, and what your employees would find on the individual market in Northeast Tennessee. If it makes sense, we design the classes and allowances with you and put them in a plain-language summary for your approval. Then we meet with employees and help each one choose. A dedicated administration platform handles notices, proof of coverage, and reimbursements, and we stay your local contact all year.

If you want to know whether it fits your business, ask us to take a look. The fit check costs nothing.