Open enrollment begins Nov. 1, and there is a lot to know about the current landscape of health care and ICHRA. In this brief, we’ll dive into the impacts of healthcare changes and the hope that the CHOICE Arrangement offers.
If ACA subsidies expire, insurance premiums will increase
Last year, 24 million people used the Health Insurance Marketplace for health benefits, and 93% received a premium tax credit(1). The ACA insurance tax credits that were created in 2021 as part of a COVID relief measure are scheduled to expire in December.
A direct cause and effect of that expiration is that without those ACA subsidies being extended, insurance premium payments have risen significantly for this open enrollment season. While some of the numbers are still shaking out, one estimate shows that expiration of the enhanced premium tax credits will more than double what subsidized enrollees pay annually for premiums(2). Most carriers have announced their 2026 rate increases at this time (we are watching this on a daily basis!).
Some lawmakers are pushing for tax credits to be extended and have made that a condition of reopening the government.
Since states have already filed their rates for 2026, even if Congress votes to extend the tax credits, there isn’t enough time to change the already high premiums for this year. This year will be a year of high healthcare costs, but we see these hikes as a year of adjustment rather than the “new normal.”
But there is some good news…
ICHRA remains steady amidst uncertainty
Uncertainty about the future of healthcare can be hard. But those uncertainties make ICHRA even more important.
In this environment, ICHRA rises to the top as a stable health plan solution that offers budget predictability for employers and protects them from the volatility of traditional group plan renewals. It also allows employers to take advantage of the variability and choice inherent to the individual market, including less expensive off-exchange plans with more price stability this year.
ICHRA also benefits employees since they can use their allowance to help offset any increased out-of-pocket costs they might face when purchasing individual plans. Now that bronze plans are HSA eligible, this is a financial boon for employees looking to reduce their tax burden.
As always, Take Command is here to help employers and employees understand the health care landscape and succeed with ICHRA.
CHOICE Arrangement Act offers permanency and hope
The CHOICE Arrangement Act (Custom Health Option and Individual Care Expense) is legislation that seeks to codify and enhance the existing ICHRA framework. The bill was originally introduced in 2023 and revived by Representative Kevin Hern (OK-01) in September.
If CHOICE passes, ICHRA benefits would be written into law
If passed, CHOICE would make ICHRA offerings official. That means the same amazing benefits that ICHRA has provided for years would become law. Employers would have a budget-friendly way to offer health benefits, and employees could choose the plan that works best for them.
CHOICE would keep foundational ICHRA elements
- Budget control and predictability
- Personalized plan choices for employees
- Simple, flexible plan designs
- No employer responsibility for health risks
- No participation concerns
New with CHOICE: Employees could use pre-taxed income to pay for premiums
One of the proposed changes in CHOICE is that employees could use pre-taxed income to pay their health plan premiums. That change could increase Marketplace plan affordability for employees, offsetting the premium increases if ACA subsidies expire.
Take Command remains an ICHRA champion and trusted advisor
Take Command was one of the first ICHRA champions, and we still love it to this day. We take pride in our long-term ICHRA expertise that sets us apart from other ICHRA administrators. It also makes us uniquely qualified to act as a trusted advisor.
If you have questions about the implications of tax credits, CHOICE possibilities or just ICHRA questions in general, we can guide you through what to consider. In fact, talking through complex health care scenarios is one of our specialties!
CHOICE Arrangement timeline
June 2023: The original CHOICE Arrangement Act (H.R. 3799) is introduced. The bill proposes giving businesses more flexibility in offering employees health benefits through enhanced Health Reimbursement Arrangements (HRAs). It also rebrands the Individual Coverage HRA (ICHRA) into the Custom Health Option and Individual Care Expense (CHOICE) Arrangement.
June 2023: H.R. 3799 passes the House of Representatives.
Late 2023: The bill stalls in the Senate and is not passed into law.
May 2025: The One Big Beautiful Bill is introduced in Congress and revives key components of the original CHOICE Act.
May 2025: The One Big Beautiful Bill passes the House of Representatives. The bill includes the provisions related to CHOICE Arrangement.
July 2025: Senate removes CHOICE provisions.
July 2025: The One Big Beautiful Bill passes and is signed into law, excluding CHOICE. The final, enacted legislation does not include any of the proposed changes related to CHOICE Arrangements.
Sept. 2025: Representative Kevin Hern revives CHOICE Arrangement efforts and introduces H.R. 5463: CHOICE Arrangement; it is referred to the House Committee on Ways and Means.
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