A CHOICE Arrangement, known until September 2026 as an Individual Coverage HRA or ICHRA, turns the traditional group plan around. You set a monthly allowance. Your employees choose the individual health plan that fits their doctors and their family. The business reimburses them tax-free up to the allowance. FIG Benefits helps you decide whether it fits, designs it with you, and helps your employees choose.
ICHRA Has a New Name: CHOICE
On September 3, 2026, CMS and the Small Business Administration announced that the Individual Coverage Health Reimbursement Arrangement is now called the CHOICE Arrangement. Nothing about how it works changed. Employers still set a defined contribution, employees still buy qualifying individual coverage, and reimbursements are still tax-free when the requirements are met.
The SBA is now promoting the arrangement directly to small businesses as a way to offer health benefits with predictable costs and employee choice, without sponsoring a traditional group plan. If you have heard about it recently, that is probably why.
How a CHOICE Arrangement Works
- You set a monthly allowance for each class of employee, such as full-time and part-time or salaried and hourly.
- Each participating employee enrolls in qualifying individual health insurance (or Medicare) that they choose.
- Employees submit proof of their premium, and the business reimburses them tax-free up to the allowance.
- Employees receive a written notice before the plan year, generally at least 90 days ahead, so they can plan.
- Any unused allowance stays with the business.
Where It Fits, and Where It Doesn't
A CHOICE Arrangement tends to fit employers who want to control their benefits budget, offer benefits for the first time, or cover employees whose needs vary widely. It tends not to fit a group that is happy with a strong group plan at a price the owner can live with. A fixed allowance controls what the business contributes; it does not guarantee that premiums, employee costs, or the allowance needed to stay affordable will stay the same, and we show you those trade-offs side by side.
Industries We Work With
Hospitality, home health, staffing, and contracting employers each bring different questions: seasonal and part-time mixes, caregivers who live in different counties, who employs a placed worker, and who is truly an employee. Start with the page for your industry below.
- Hospitality
Budget control for restaurants, hotels, and venues with a staff that changes by the season.
- Home Health
A defined health allowance for caregivers who work where their clients live.
- Staffing
Benefits that follow a workforce placed at client sites.
- Contractors and Trades
A predictable benefits line for construction and trades employers.
See If CHOICE Fits Your Business
Request a fit check and a licensed FIG agent will follow up. We will ask about your headcount, renewal date, and current coverage. No census or employee health information is needed to start.