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.

What is a good deductible for health insurance?

There isn't one deductible that's best for everyone. A good deductible depends on your healthcare needs, budget, and how much you can comfortably afford to pay out of pocket.

Is it better to have a lower deductible or lower premium?

Plans with lower deductibles generally have higher monthly premiums, while plans with higher deductibles typically have lower monthly premiums. If you expect frequent medical care, paying more each month for a lower deductible may make sense. If you rarely need care, a lower premium and higher deductible could save you money overall.

Does my deductible reset every year?

Generally, yes. Most health insurance deductibles reset at the beginning of each new plan year. Once the new plan year begins, you'll typically need to meet your deductible again before your plan starts paying its share of covered services. However, the exact reset date and rules can vary by plan, so check your plan documents to confirm.

What happens if I don't meet my health insurance deductible?

If you don't meet your deductible during the plan year, you'll generally pay the full cost of covered services that are subject to the deductible.

Do copays count toward my deductible?

Usually, no. Copayments generally don't count toward your deductible, although they may count toward your out-of-pocket maximum.

Can an HRA reimburse my health insurance deductible?

Yes. An employer-sponsored health reimbursement arrangement (HRA) can reimburse eligible deductible expenses if the employer includes them in the HRA's plan design.

Which states have their own health insurance marketplaces?

States with their own health insurance marketplaces include California, Colorado, Connecticut, Georgia, Idaho, Illinois, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington. Oklahoma will be introducing a state-based exchange starting in 2027 for 2028 coverage.

What is the difference between a state and federal marketplace?

With a state-based exchange, the state controls plan eligibility, enrollment, customer support, enrollment assistance, verifying premium tax credit eligibility, marketing efforts, and creating any state-specific subsidies. They also work directly with carriers to determine which plans are listed on the exchange and any rate increases or decreases. With the federal exchange, the federal government handles this on behalf of the states.

Can I use HealthCare.gov if my state has its own exchange?

You can only use HealthCare.gov if your state has no exchange or if your state hosts its exchange on the federal platform. For 2026 Open Enrollment for 2027 coverage, only Oklahoma and Arkansas have state-based exchanges on the federal platform. Otherwise, if your state has an exchange, you must use your state exchange to shop for coverage. HealthCare.gov will prompt you to visit your state exchange website after you input your ZIP code, so you can always start there.

Can I pay the PCORI fee electronically?

Yes, you can pay the PCORI fee electronically. You can use the Electronic Federal Tax Payment System (EFTPS).

Do I owe a PCORI fee if I offer both an ICHRA and a group health plan?

Yes, you need to pay a PCORI fee if you offer an ICHRA. The PCORI fee for ICHRA is separate if the group plan is a fully-insured plan, as PCORI only applies to self-funded models. If you offer a self-funded plan alongside an ICHRA to different employees, and they share the same plan year, you can combine them for PCORI fee reporting purposes. Count the average number of participating employees and dependents for the self-funded plan plus the average number of participating ICHRA employees.

How can employers reduce employee benefit costs without cutting benefits?

Employers can reduce benefit costs by offering more cost-controlled options, such as health reimbursement arrangements (HRAs), evaluating underutilized benefits, and consolidating multiple perks into flexible stipend programs. These strategies can help lower expenses while maintaining employee satisfaction.

How can an HRA help during a recession?

An HRA can help employers manage healthcare spending during economic uncertainty by providing predictable monthly costs and eliminating unexpected group health insurance renewal increases. This allows organizations to maintain valuable health benefits while protecting their budgets.

Is an HRA cheaper than traditional group health insurance?

For many employers, an HRA can be more affordable than traditional group health insurance because there are no minimum contribution requirements or participation requirements, and employers have complete control over their benefit budget by using a defined contribution model. Actual savings depend on company size, employee demographics, and benefit design.

Can an HRA replace group health insurance?

Yes. A qualified small employer HRA (QSEHRA) or individual coverage HRA (ICHRA) can serve as an alternative to traditional group health insurance. Employees use the benefit to purchase their own qualifying individual health coverage and receive tax-free reimbursements from their employer for premiums and out-of-pocket medical costs.

What employee benefits do workers value most during economic uncertainty?

Health insurance, healthcare benefits, retirement savings programs, paid time off, flexible work arrangements, and long-term disability insurance are consistently among the most valued employee benefits. During periods of economic uncertainty, benefits that help employees manage healthcare, living, and household expenses become even more important.

Chase Charaba

Chase Charaba is the Director of Content & Brand at Remodel Health and PeopleKeep, where he brings four years of expertise in writing about HRAs and health benefits. Having personally used both QSEHRA and ICHRA as an employee, Chase offers a unique perspective on how these solutions empower small employers and their teams. With experience in both digital marketing agencies and in-house teams, Chase combines strategic SEO insight with creative storytelling. Outside of work, he’s an aspiring fiction author and landscape photographer.

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