ICHRA Has a New Name: Meet the CHOICE Arrangement

Key takeaways

What employers need to know

• CHOICE Arrangement is the new public-facing name for ICHRA.

• The naming announcement does not change the underlying benefit or its requirements.

• Employers may see both terms in use. Coordinate with your advisor and administrator before updating employee communications.

Individual Coverage Health Reimbursement Arrangements, commonly known as ICHRAs, have a new public-facing name: CHOICE Arrangements. In September 2026, the Centers for Medicare & Medicaid Services (CMS), U.S. Department of Health and Human Services (HHS), and the U.S. Small Business Administration (SBA) introduced the new branding, along with educational resources for employers.

The name has changed. The announcement does not change how the benefit works or require employers to replace an existing ICHRA or CHOICE under the new branding.

If your company offers an ICHRA, the main consideration is keeping communications clear as employees begin seeing both terms. If you’re exploring one, CHOICE Arrangement refers to the same benefits option you may already be evaluating.

What Is a CHOICE Arrangement?

CHOICE stands for Custom Health Option and Individual Care Expense Arrangement. It is the new public-facing name for the existing ICHRA model, which has been available since 2020.

Under this approach, an employer establishes a reimbursement arrangement, and employees select qualifying individual health insurance. Depending on the employer’s plan design, the arrangement reimburses premiums and other eligible medical expenses, subject to applicable requirements.

The CHOICE Arrangement provides employer-funded reimbursements, while the individual health insurance policy provides the actual health coverage.

Does the New Name Change the Rules?

The branding announcement does not change the underlying ICHRA requirements. Rules governing eligibility, employee classes, affordability, notices, and reimbursement administration continue to apply.

It also does not change your company’s contribution, the expenses your plan reimburses, or the insurance policies employees have selected. Those would require separate plan or coverage changes.

Employers may continue to see “ICHRA” in regulatory references, plan documents, and administrator materials while “CHOICE Arrangement” appears in newer communications. Both terms refer to the same type of arrangement.

Why Was the Name Introduced?

Federal agencies introduced the CHOICE branding to raise awareness of this benefits option, particularly among small businesses. The rollout includes resources explaining costs, employer contributions, and administration. The rebranding is part of a broader effort to increase awareness of the arrangement and provide employers with resources to better understand how it works.

For employers considering this approach, the new name does not change the evaluation. Available coverage, employee costs, compliance requirements, and enrollment support still determine whether it fits your organization.

Does Your Company Need to Do Anything?

The naming announcement alone does not require employers to redesign their benefit or employees to select new coverage.

If your company already offers an ICHRA, consider consulting your benefits advisor or administrator before changing terminology in employee materials. There is no need to replace every reference to ICHRA simply because the new name has been introduced.

As materials are updated, using both names together — for example, “ICHRA, now also known as a CHOICE Arrangement” — can help employees connect the new term with the benefit they already know. For a fuller introduction in employee communications, you could write: “Your Individual Coverage Health Reimbursement Arrangement (ICHRA), now also known as a CHOICE Arrangement…”

If you announce the naming update, explain that it does not change the current benefit and that no enrollment action is required because of the name change. Continue communicating any actual plan changes and enrollment requirements separately.

Where Can You Learn More?

If you’re exploring this benefits approach, our article, Is an ICHRA Right for Your Organization?, explains how it works and the considerations employers should evaluate.

If your company already offers an ICHRA, your McClone Advisor can guide you through questions about the terminology and how to explain it in employee communications.