On September 3, 2026, the U.S. Small Business Administration and CMS announced “CHOICE Arrangements,” a new name for Individual Coverage Health Reimbursement Arrangements, or ICHRAs.  These arrangements allow employers to provide an HRA to employees and family members who are enrolled in individual market coverage or Medicare.  This recent announcement is the first ICHRA-related announcement of the second Trump Administration and signals continued federal support for these arrangements.

The first Trump Administration created ICHRAs via regulations the tri-agencies issued in June 2019.  Uptake of ICHRAs by large employers has been slower than projected.  When the ICHRA regulations were finalized, the tri-agencies projected that, over the next 5 to 10 years, approximately 800,000 employers would offer ICHRAs covering over 11 million employees.  While a recent report shows that ICHRA adoption increased significantly in 2026, it remains below the original projections. 

The CHOICE Arrangement announcement appears to be a rebranding and outreach effort to highlight the potential benefits to employers of adopting these designs, rather than a new regulatory framework.  The core structure of ICHRAs remains the same, but the new name signals renewed federal attention to this type of employer-sponsored health benefit.

The CHOICE name comes from recent legislation.  A previous version of the One Big Beautiful Bill Act that passed the House on May 22, 2025, would have codified the ICHRA regulations and renamed ICHRAs a CHOICE Arrangement, but those provisions were not included in the final bill.  These provisions would have provided additional flexibilities and incentives for adopting employers, including a two-year employer credit for small employers.  Similar CHOICE Arrangement provisions were also included in the “Lower Health Care Premiums for All Americans Act,” which passed the House on December 17, 2025, but was not taken up by the Senate. 

We understand that the Administration is looking at ways to increase employer uptake of CHOICE Arrangements and that the tri-agencies plan to provide more flexibilities through additional rulemaking.  We are continuing to monitor policy updates relating to CHOICE Arrangements.  For more information, visit www.cms.gov/choicearrangements.