ICHRA Has a New Name: The CHOICE Arrangement
ICHRA has a new name. On September 3, 2026, the Centers for Medicare & Medicaid Services (CMS) and the Small Business Administration (SBA) changed the ICHRA name to the CHOICE Arrangement.
ICHRA has a new name. On September 3, 2026, the Centers for Medicare & Medicaid Services (CMS) and the Small Business Administration (SBA) changed the ICHRA name to the CHOICE Arrangement.
If your employer gives you money to buy your own health insurance, this will now be called a CHOICE Arrangement. Nothing about how it works has changed though, only the name.
What CHOICE stands for
CHOICE means Custom Health Option and Individual Care Expense Arrangement. The previous name was Individual Coverage Health Reimbursement Arrangement, also known as ICHRA. Both names point to the same benefit.
Why the name change
ICHRA has been a difficult acronym for employers and employees to understand. While the benefits have grown in popularity over the years, the name itself often required explanation before people could understand how it worked. The new name is more obvious making it easier for people to understand. Employers contribute toward coverage and an employee chooses the health plan that fits their needs.
What stayed the same
Everything except the name. The federal rules behind the benefit did not change.
That means:
- Employers can still provide a monthly allowance for health insurance expenses.
- Reimbursements remain tax-free for eligible employees.
- Employees continue to purchase their own individual health insurance coverage.
- Employers must continue to follow existing notice, reporting, and plan design requirements.
If you currently receive benefits through an ICHRA, you do not need to take any action because of the name change.
If your employer offers you one
You get a set amount of money each month toward a health plan you pick yourself. The plan is yours, not your employer's, so it goes with you when you leave.
Three things worth knowing:
- The offer can open a Special Enrollment Period, and you generally get 60 days to choose a plan.
- Whatever you pick has to be qualifying individual coverage.
- If the offer counts as affordable under federal rules, you won't be able to claim a premium tax credit on the Marketplace, even if you turn the offer down.
Your employer or benefits contact can tell you your allowance amount and your deadline.
If you're the employer
Right now, there are a few operational changes you could make. Existing program requirements and plan administration stay the same. However, you may want to do the following:
- Decide which term you'll use in employee materials, then tell your benefits administrator and your broker so everyone matches.
- Expect questions from employees who see CHOICE in a federal notice and ICHRA in your enrollment packet.
- Monitor future CMS guidance. CMS has rebuilt its guidance around the new name. Eligibility, employee classes, and contribution rules are covered on its employer initiatives page.
Will people still say ICHRA?
Most likely, yes. Contracts, plan documents, older federal guidance, and many in the industry may still say ICHRA for a while. Expect both names to be used in conversations.
The bills in Congress should be watched
Congress has tried more than once to write ICHRA into federal law under the CHOICE name with several changes, including tax credits for small employers. Some of it passed the House, but none of it has become law. This announcement changes the name and nothing else.
Bottom line
A CHOICE Arrangement is an ICHRA. The rules, the tax treatment, and the money all work the way they have been. What changed is the name we use to refer to it.
