What does CHOICE stand for?

Custom Health Option and Individual Care Expense Arrangement. It is the name CMS and the SBA adopted for the benefit previously known as an Individual Coverage HRA, or ICHRA.

What if we are growing quickly?

A CHOICE Arrangement can scale cleanly because you control the contribution strategy.

CHOICE ARRANGEMENT · FORMERLY ICHRA

Fixed Costs for You. Choice for Employees.

Q: Is a CHOICE Arrangement the same as an ICHRA?

Yes. On September 3, 2026, CMS and the SBA began calling the Individual Coverage Health Reimbursement Arrangement a CHOICE Arrangement, short for Custom Health Option and Individual Care Expense Arrangement. This was a rename, not a new product. Eligibility, classes, affordability and the underlying regulations are unchanged. The IRS still uses ICHRA, and existing plan documents keep their current wording until your administrator or counsel updates them.

Q: Is a CHOICE Arrangement complicated?

It can be if done poorly. We handle setup and keep it simple for employees.

Q: Do employees have to shop on their own?

We provide full guidance and resources so they do not feel abandoned.

Offer tax-advantaged health benefits without being trapped in a one-size-fits-all group plan.

See If CHOICE Works Talk to a Ninja

How a CHOICE Arrangement, formerly ICHRA, works for small businesses

WHAT IS A CHOICE ARRANGEMENT

What a CHOICE Arrangement Is

Previously known as an Individual Coverage HRA, or ICHRA, a CHOICE Arrangement lets employers fund employees' individual health coverage rather than purchasing one group plan. Reimbursement is tax-free when the arrangement is structured correctly, and it can cover individual health insurance premiums and eligible medical expenses.

CHOICE stands for Custom Health Option and Individual Care Expense Arrangement. CMS and the SBA adopted the name on September 3, 2026. The name changed. The rules did not.

You control the budget. Employees choose coverage.

WHY EMPLOYERS USE IT

Why Small Businesses Use a CHOICE Arrangement

✓Set a predictable employer contribution.

✓Offer benefits without sponsoring a traditional group plan.

✓Support diverse employee needs across family, age, and location.

✓Scale benefits as you grow.

Why small businesses use a CHOICE Arrangement, formerly ICHRA

HOW WE IMPLEMENT

How Benefits Ninja Implements a CHOICE Arrangement

1Set the structure
Determine eligible classes and contribution levels.

2Guide plan selection
Coordinate plan selection support for employees.

3Stand up administration
Set up administration and compliance workflows.

4Communicate and onboard
Employee communication and onboarding.

5Stay on it
Ongoing support throughout the year.

FAQS

CHOICE Arrangement FAQs

Is a CHOICE Arrangement the same as an ICHRA?

Is a CHOICE Arrangement complicated?

Do employees have to shop on their own?

What if we're growing quickly?

Control Costs Without Cutting Benefits

If group renewals are killing you, a CHOICE Arrangement, formerly known as ICHRA, might be your clean exit.

Evaluate a CHOICE Arrangement

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Benefits Ninja helps small businesses cut benefit costs, optimize payroll, and simplify HR with proactive, compliant strategies that deliver real savings.

Benefits Ninja provides insurance and benefits consulting. Everything on this site is general information for educational purposes only. It is not insurance, tax, legal, or medical advice, it is not a quote, and it is not an offer or binder of coverage. CHOICE Arrangement is the name adopted by CMS and the SBA on September 3, 2026 for what federal tax guidance still calls an Individual Coverage Health Reimbursement Arrangement (ICHRA); both terms refer to the same benefit and the renaming did not change the governing rules. Plan availability, eligibility, rates, contribution limits, and savings vary by state, carrier, group size, plan design, and employee census, and are subject to carrier underwriting and applicable law. Any figures, examples, or savings shown are illustrative only and your results will differ. Tax outcomes, including any FICA impact, depend on your specific facts; consult your own tax advisor and legal counsel before acting. Coverage is in force only when issued in writing by the carrier. Insurance offered through licensed agents in states where licensed.