SBA Recognizes Innovative CHOICE Arrangements as Major Win for Small Businesses

WASHINGTON - Today, the U.S. Small Business Administration (SBA) joined the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) to announce CHOICE Arrangements. Formerly known as Individual Coverage Health Reimbursement Arrangements (ICHRAs), they are a proven tool that enables small employers to offer health benefits at a fraction of the cost of traditional group insurance. CHOICE Arrangements allow businesses to set a predictable monthly budget for health benefits instead of absorbing the rising, unpredictable premiums of group insurance plans.

At an event in Indiana today, SBA Administrator Kelly Loeffler and CMS Administrator Dr. Mehmet Oz unveiled the rebranded program and new resources to help employers understand the cost savings and how to get started.

"The strong leadership of President Trump, Secretary Kennedy, and Dr. Oz has resulted in more affordable health insurance alternatives for America's small businesses through CHOICE Arrangements," said SBA Administrator Kelly Loeffler. "For too long, small employers, which are also America's most effective job creators, have been priced out of a health insurance market where prices only go up and coverage goes down. These plans can change that. Employers set a monthly contribution level, and employees pick the plan that suits their families; it's a win-win. This new, flexible model offers employers greater control over their healthcare costs and offers American workers more freedom to choose coverage that works for them and their families. The SBA is proud to partner with CMS to connect small businesses across the country with this powerful cost-saving tool."

"CHOICE Arrangements let workers choose coverage that meets their unique health care needs which can often offer better options than traditional employer plans," said CMS Administrator Dr. Oz. "I'm excited to partner with Administrator Loeffler to promote this underused option that combines the tax benefits of traditional group plans with the flexibility of purchasing coverage independently. And I urge small business owners across the country to take advantage of the resources we're unveiling today to determine whether a CHOICE Arrangement is the right fit for their workforce."

Established under President Trump's first Administration, ICHRAs created a new alternative to the traditional group health insurance model by allowing employers to provide tax-favored contributions that employees can use to purchase qualified health coverage. Employees have the freedom to select the coverage that fits their family's needs and doctors, rather than being locked into a one-size-fits-all plan.

Under the new CHOICE Arrangements branding, CMS is providing employers with new educational resources and tools designed to make them easier to evaluate and implement, including information to help small businesses understand costs, contribution structures, and third-party administration options.

For small businesses, the benefits of CHOICE Arrangements include:

• Predictable costs. The plans offer a more flexible and predictable approach to providing health benefits by allowing employers to determine their contribution while employees select individual coverage that meets their needs.
• Tax advantages. Employer contributions to CHOICE Arrangements are generally deductible as a business expense, while reimbursements for qualified medical expenses are generally tax-free to employees.
• Lower administrative burden. The model can be especially valuable for small employers seeking an alternative to traditional and complex group coverage, including those seeking to offer benefits for the first time while remaining competitive with larger employers.
• Scalability. Employers of any size with at least one W-2 employee can establish CHOICE Arrangements.

The Administration is pairing greater coverage choice with concrete action to lower healthcare costs and expand access. President Trump's Great Healthcare Plan advances lower prescription-drug prices, reduces insurance premiums, provides stronger insurer accountability, and enhanced price transparency. TrumpRx.gov has delivered savings on more than $700 million in medications, while the Working Families Tax Cuts Act created the historic $50 billion Rural Health Transformation Program through CMS to strengthen rural health systems and expand access to care nationwide. Together, these policies are giving America's small businesses, workers, and families more choice, lower costs, and better access to care.

The SBA encourages small business owners to visit our CHOICE Arrangements website or www.cms.gov/choicearrangements to learn more.

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About the U.S. Small Business Administration

The U.S. Small Business Administration helps power the American dream of entrepreneurship. As the leading voice for small businesses within the federal government, the SBA empowers job creators with the resources and support they need to start, grow, and expand their businesses or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.

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