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As employer health costs spiral, a growing number of companies are ditching traditional group plans in favor of giving workers tax-free cash to buy their own coverage. Known as CHOICE arrangements (formerly ICHRAs), the model is backed by the Trump administration and JPMorgan Chase — but its success hinges on a shaky individual insurance market facing double-digit premium hikes.
As health insurance costs crush small businesses, a new model is gaining traction: instead of offering a traditional group plan, employers hand workers tax-free cash to shop for their own individual coverage. Called CHOICE arrangements (rebranded from Individual Coverage Health Reimbursement Arrangements, or ICHRAs), the approach gives employers more predictable costs while — in theory — letting employees pick plans tailored to their needs.
The Trump administration and JPMorgan Chase executives are among the loudest supporters. A new policy paper from Morgan Health and JPMC calls on Congress to codify CHOICE arrangements into law and urges states to offer employer tax credits and bolster reinsurance programs to stabilize the individual market.
But enthusiasm is running ahead of adoption. Critics warn that ACA marketplace instability and expiring subsidies make individual plans a tough sell for workers — and that without stronger products on the exchanges, the model's growth will remain limited.
By the Numbers:
Why it matters: With small group insurance markets described as "imploding," CHOICE arrangements could reshape how millions of Americans get health coverage — but only if policymakers stabilize the individual market first.
