If you’ve been looking into health insurance for your Colorado business, you may have come across ICHRA. Now there’s another name to know: CHOICE Arrangement.
The Centers for Medicare & Medicaid Services (CMS) is using CHOICE as the new name for the benefit previously called an Individual Coverage Health Reimbursement Arrangement, or ICHRA. You may still see both names as employers, insurers, and benefit administrators update their materials.
How does a CHOICE Arrangement work?
Instead of choosing a group health insurance plan for your employees, you set an amount your business will reimburse toward their individual health insurance. Employees choose their own coverage, and your business reimburses eligible premiums tax-free, up to the amount you’ve established. Depending on how you set up the arrangement, it can also reimburse other qualified medical expenses.
For example, an employer might offer $500 a month toward coverage. An employee who chooses a more expensive plan would pay the remaining premium. For the employer, the appeal is having a defined contribution to budget around. For employees, it’s the ability to choose their own insurance.
Is it a good fit for your Colorado business?
That takes a closer look. A predictable employer budget matters, but so does what employees can actually buy with that contribution. Before making a change, we’d want to compare the individual plans available where your employees live, check their doctors and prescriptions, and look at what they would pay themselves. Employees will also need help understanding enrollment and reimbursement.
A CHOICE Arrangement deserves consideration alongside traditional group coverage. The right choice depends on the numbers and your employees’ needs. We can help you compare those options and decide which approach makes sense for your business. If you’re considering a CHOICE Arrangement, or still searching for “ICHRA in Colorado,” contact us to start the conversation.
