Five Ways States Can Lead the Way on CHOICE (formerly ICHRA)
Here's how state policymakers can catalyze a consumer-driven insurance marketplace, and how you can help push these ideas forward.
CHOICE Arrangements (formerly ICHRAs) empowers states, employers and employees — together.
Consider a CHOICE Arrangement (formerly ICHRA) for State Employees and/or Retirees
States can offer CHOICE Arrangements (formerly ICHRAs) or a similar type of individual Health Reimbursement Account (HRA) for state and/or municipal employees. This provides cost control for the state budget.
In 2022, Ohio's Public Employees Retirement System (OPERS) funded a stand-alone retiree HRA account for Pre-Medicare retirees that, like CHOICE Arrangements (formerly ICHRAs), provides tax-free reimbursement for plan premiums and qualified medical expenses. After switching to this HRA model along with other investment changes, OPERS predicts the trust fund is expected to last approximately 25 years, an improvement over the prior year's solvency period of 21 years.
Monongalia County, West Virginia also switched to CHOICE Arrangements (formerly ICHRAs) for their county employees, saving $700,000 and lowering employee premiums from about 7% to 4%.
Create State Tax Credit Incentives for Employers to Adopt CHOICE Arrangements (formerly ICHRAs)
State legislatures can introduce bills to provide employers a tax credit for offering CHOICE Arrangements (formerly ICHRAs) to their employees. Bills can include additional incentives for small businesses that offer health insurance for the first time through CHOICE Arrangements (formerly ICHRAs).
In 2023, Indiana was the first state to pass legislation creating a tax credit for CHOICE (formerly ICHRA) adoption. Connecticut and Mississippi have adopted similar tax credits for small employers, and in April 2026 the bipartisan National Council of Insurance Legislators (NCOIL) adopted model legislation for states to pursue their own adoption of CHOICE (formerly ICHRA) tax credits.
Similar legislation has been considered in Arizona, Florida, Georgia, Illinois, New Hampshire, Ohio, Pennsylvania, Texas, and Wisconsin.
In Texas, the introduction of CHOICE (formerly ICHRA) tax credit legislation helped lead to an interim study on affordability, including these types of plans.
Educate Employers on the Value of CHOICE (formerly ICHRA)
State Departments of Insurance or Governor's Offices can direct state agencies to educate employers and brokers on the benefits of CHOICE (formerly ICHRA), partnering with groups like the NFIB.
The Small Business Health Options Act (H.R. 5498) is a federal bill that would establish a Small Business Administration–led initiative to educate small businesses about how CHOICE (formerly ICHRA) can help them provide affordable coverage.
Leverage a State Based Exchange (SBE) to Promote CHOICE (formerly ICHRA)
SBEs provide more flexibility and control for states to set policy. SBEs can launch platforms and educational materials to educate more employers of the option and benefits of CHOICE (formerly ICHRA).
Georgia's SBE, Georgia Access, has launched a new platform for 2027, Georgia Access For Business. The platform will streamline the purchase of insurance through CHOICE (formerly ICHRA) and ease the shopping experience for employees and the administrative experience for employers.
A new tax credit for small business will be offered through Access Health CT's Business Plus platform this year.
Create a State CHOICE (formerly ICHRA) Platform
For states without an SBE, state legislatures can champion legislation to create a state platform to offer CHOICE (formerly ICHRA) and streamline employer adoption.
Florida considered legislation in 2026 that would have established a board to oversee the creation of a CHOICE (formerly ICHRA) platform by 2028.