Key Takeaways
- The federal government renamed ICHRA to “CHOICE Arrangement” on September 3, 2026, when the Centers for Medicare & Medicaid Services (CMS) and the Small Business Administration (SBA) jointly announced the change.
- CHOICE stands for Custom Health Option and Individual Care Expense, a new label for the same benefit employers have been able to offer since 2020.
- Every rule that governed ICHRA still governs CHOICE Arrangement, including the employee classes an employer can use, the age-based contribution limits, and the option to pair the arrangement with a Section 125 cafeteria plan.
- If your business already offers ICHRA, your plan design and compliance obligations don’t change. Only the name showing up on federal resources and, over time, your broker’s and TPA’s materials will look different.
- CMS and the SBA frame the new name around what employees get from the benefit, choice over their own coverage, rather than the tax mechanics the old acronym described.
The Federal Government Renamed ICHRA to CHOICE Arrangement
On September 3, 2026, CMS and the SBA announced that the Individual Coverage Health Reimbursement Arrangement (ICHRA) has a new name. Now the program is called “CHOICE Arrangement,” with CHOICE standing for Custom Health Option and Individual Care Expense.
The benefit itself is the one employers have been able to offer since 2020. An employer sets a fixed monthly budget instead of buying one group health plan for the whole team, and each employee uses that budget to choose the individual health plan that fits their own doctors, prescriptions, and family situation. It’s the same arrangement your business may already offer, just carrying a new name.
What’s Changing (and What Isn’t)
The name is the only thing that changed. CMS’s guidance describes CHOICE Arrangement with the same rules that have applied to ICHRA all along. If your business already has ICHRA in place, there’s nothing to redesign. Your current plan, your contribution amounts, and your compliance obligations carry over exactly as they are. The practical adjustment is watching for the new terminology to show up in federal resources, tax forms, and eventually your broker’s or TPA’s communications, since the industry will spend the next stretch of time using both names while the shift settles in.
Why CMS and the SBA Renamed ICHRA to CHOICE Arrangement
The old acronym described what the benefit does on paper, a health reimbursement arrangement tied to individual coverage, but said nothing about what an employee gets from it. The SBA frames CHOICE Arrangement as flexibility and an affordable option for small businesses, open to employers of any size with at least one W-2 employee, language built around what the benefit accomplishes rather than how it’s taxed.
The timing lines up with a benefit that was already growing fast under its old name. The HRA Council’s 2026 report found more than 500,000 employees covered by ICHRA at the start of the year, spread across more than 20,000 businesses, with adoption among large employers more than doubling year over year. A benefit reaching that many employers is also one where a name that’s easier to explain to a first-time buyer starts to matter more.
What This Means for Your Business
If you’re already offering ICHRA, this is a naming update, not a to-do list. Your plan keeps running the way it always has, and no filing, election, or renewal step changes because the federal government picked a new name for the framework.
If you haven’t looked at ICHRA, now CHOICE Arrangement, for your team yet, the decision in front of you hasn’t changed either. It still comes down to your team’s size, budget, and how much variation exists in what your employees need, weighed against a group health plan. The rename doesn’t tip that call in any one direction. It just gives the option a name that’s easier to explain when you’re bringing it up with your team.
Getting Started
Decisely’s licensed, US-based benefits team works across group health plans and CHOICE Arrangement so the recommendation you get starts from your business rather than a single product. That’s also true for the terminology: expect us to use “CHOICE Arrangement” and “ICHRA” together for a while, since your team, your accountant, and plenty of other resources will still recognize the older name.
Reach out to Decisely to make sure your plan documents, employee communications, and broker relationship stay current as CHOICE Arrangement rolls out, or to talk through whether a CHOICE Arrangement or group plan fits your business best.
FAQs
Do I need to update my plan documents or employee communications now that ICHRA is called CHOICE Arrangement?
Not right away. Your existing plan documents remain valid, and there’s no federal deadline forcing an update. It’s still worth refreshing your open enrollment materials and employee-facing language over time so your team recognizes the new name when it shows up on federal resources or tax forms.
Should we stop using the term “ICHRA”?
No, CMS and the SBA expect both names to circulate for a while, since many employers, accountants, and brokers still know the benefit as ICHRA. Decisely will keep using both terms together during this transition so nothing gets lost in the switch.
Does the rename affect employees who are already enrolled?
No, employees who are already enrolled keep their current elections, reimbursements, and coverage without any change. Nothing about an employee’s individual health plan or their employer’s contribution shifts because the benefit has a new name.
Is a CHOICE Arrangement the same thing as Decisely’s CoreChoice program?
No, and the similar names make this worth clarifying. A CHOICE Arrangement is the federal government’s new name for ICHRA, the defined-contribution benefit that lets employees buy their own individual coverage. CoreChoice is a separate Decisely offering that connects eligible business owners to national health plan coverage. The names sound alike, but they’re different products built for different needs.
Does this change anything about ACA reporting for large employers?
No, the rename doesn’t touch how Applicable Large Employers evaluate affordability or satisfy employer shared responsibility requirements. Those calculations work the same way under a CHOICE Arrangement as they did under ICHRA, since the eligibility rules and contribution structure didn’t change, only the name did.
About the Author — Jess Southwell
Jess Southwell is the SVP, GM of Amazon and CHOICE Arrangement at Decisely. With over 15 years of experience, she is a healthcare and technology leader focused on building and scaling client-centered teams and solutions in complex, highly regulated environments. Her background spans product, operations, and client experience, with expertise in health tech, benefits strategy, and consulting. At Decisely, Jess leads the Amazon client partnership, and the CHOICE Arrangement (formerly ICHRA) platform strategy, aligning product development, client success, and service delivery to create seamless, scalable solutions. Her work focuses on improving processes, integrating systems, and helping organizations deliver clearer, more accessible benefits experiences.
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