CHOICE Arrangement & ICHRA
for Insurance Agents

A Different Way to Approach Employer Health Benefits

The employer health benefits market is changing, and that creates another opportunity for insurance agents.CHOICE Arrangements, formerly known as Individual Coverage Health Reimbursement Arrangements (ICHRAs), allow employers to provide eligible employees with tax-free funds that can be used toward qualifying individual health insurance coverage instead of relying solely on a traditional group health plan.

A CHOICE Arrangement is an employer-funded Health Reimbursement Arrangement that allows employers to reimburse eligible employees for qualifying individual health insurance premiums and, depending on the arrangement, certain eligible medical expenses.

Employers determine how much they will contribute and establish eligibility according to applicable employee-class rules. Employees then obtain qualifying individual coverage that meets the requirements of the arrangement.Instead of every employee being placed into the same traditional group health plan, eligible employees can select individual coverage available to them.

For agents already working in the ACA individual market, that's an important opportunity.

What Is a CHOICE Arrangement (ICHRA)?

CHOICE Arrangements can create new conversations with both employers and individual consumers.

An employer struggling with rising group premiums may be looking for another way to provide health benefits. A small business that has never offered traditional group coverage may be looking for a manageable way to start. And employees receiving a CHOICE Arrangement may need help understanding and selecting individual coverage.

Benefits & Opportunities for Agents

Why CHOICE Arrangements Matter for Insurance Agents

• Expand beyond individual ACA sales
• Bring your individual-market expertise into employer benefit conversations.Create new employer relationships
• Approach businesses looking for alternatives to traditional group health insurance.Reach multiple employees through one employer
• One employer relationship can introduce you to an entire eligible workforce needing individual coverage.Generate recurring enrollment opportunities
• New hires, employee eligibility changes, and annual coverage decisions can create ongoing opportunities.Help employers manage benefit costs
• Employers establish defined contribution amounts, creating greater predictability around their health benefit spending.Give employees more coverage choice
• Employees can select qualifying individual coverage based on their own healthcare and household needs.Serve geographically distributed employers
• Individual-market coverage can be especially useful for organizations with employees living across different markets.Strengthen client retention
• Helping business clients solve another benefits challenge can deepen the agent-client relationship.Build a more diversified book of business
• CHOICE Arrangements can complement ACA, Medicare, life, ancillary, and other products already in an agent's portfolio.

How CHOICE Arrangements Work

(1)
The Employer Sets a Contribution

The employer establishes the amount it will make available to eligible employees through the CHOICE Arrangement.

Eligible employees select qualifying individual health insurance based on the coverage available where they live.

(2)
Employees Shop for Individual Coverage

Employees receive tax-free reimbursement for eligible expenses up to the amount made available under the employer's arrangement.

Employees enroll in qualifying coverage and follow the employer's CHOICE Arrangement requirements.

(3)
Employees Enroll

(4)
The Employer Reimburses Eligible Expenses

Frequently Asked Questions About CHOICE Arrangements & ICHRA

1. What is a CHOICE Arrangement?

A CHOICE Arrangement, formerly known as an Individual Coverage Health Reimbursement Arrangement (ICHRA), allows employers to provide eligible employees with tax-free funds to reimburse qualifying individual health insurance premiums and, depending on the arrangement, other eligible medical expenses. Employees purchase qualifying individual coverage rather than participating in a traditional employer group health plan.

2. Is a CHOICE Arrangement the same thing as an ICHRA?

Yes. CHOICE Arrangement is the newer terminology for what agents have traditionally known as ICHRA. Agents should become familiar with the new name while continuing to recognize ICHRA terminology as employers, employees, carriers, and consumers transition to it.

3. Why should insurance agents consider selling CHOICE Arrangements?

CHOICE Arrangements can help agents expand beyond traditional individual ACA sales and start conversations with employers. One employer relationship may create opportunities to assist multiple eligible employees with individual health coverage while helping the business explore an alternative approach to employee health benefits.

4. What types of employers may be good CHOICE Arrangement prospects?

Potential prospects can include small and midsize businesses, employers facing rising group health insurance costs, companies with employees in multiple geographic areas, growing businesses, and employers that want to offer health benefits but may not want a traditional group health plan.

5. How can Agility help agents with CHOICE Arrangements?

Agility Insurance Services can help independent agents better understand the CHOICE Arrangement opportunity and the individual health insurance market behind it. Agents can access training, carrier and product opportunities, quoting and enrollment resources, sales and marketing support, compliance resources, and experienced Producer Support to help them confidently pursue new business opportunities.