Here’s your comprehensive guide to understanding the differences between custom health option and individual care expense arrangements (CHOICE Arrangements) and other health providers.

To fully appreciate the unique position of CHOICE Arrangements, it’s helpful to compare them with other common health benefit arrangements. Each option has unique features and is suited for different employer and employee needs.

CHOICE Arrangements vs. Traditional Group Health Plans

This is the most direct comparison, as a CHOICE Arrangement often serves as an alternative to a traditional group health plan. Unlike group plans, a CHOICE Arrangement shifts plan selection to the employee, while the employer controls the contribution amount. Group plans offer a pre-selected benefit with shared risk.

CHOICE Arrangements vs. QSEHRA (Qualified Small Employer HRA)

QSEHRA is another type of HRA, specifically for small employers. These allow employers to reimburse employees for health expenses. However, these plans come with strict allowance limits and broad employee offering requirements. Unlike QSEHRA, a CHOICE Arrangement is available to employers of any size, offers greater flexibility in allowance amounts and employee classes and has different rules regarding premium tax credits.

CHOICE Arrangements vs. HRA (General Health Reimbursement Arrangement)

It’s important to clarify that a CHOICE Arrangement is a type of HRA and HRAs are a broad category of employer-funded accounts that reimburse employees for medical expenses. However, a CHOICE Arrangement has a primary focus on reimbursing individual health insurance premiums.

CHOICE Arrangements vs. HSA (Health Savings Account)

HSAs are employee-owned savings accounts for healthcare expenses, often paired with high-deductible health plans (HDHPs), offering long-term savings potential. Whereas a CHOICE Arrangement is an employer-funded reimbursement arrangement for premiums and expenses. It’s important to note that an employee with a CHOICE Arrangement can choose an HDHP and open an HSA, using the CHOICE Arrangement to cover premiums and the HSA for out-of-pocket costs, making them complementary.

For more information about CHOICE Arrangements or to walk through your health plan options, call us at (888) 535-4831 (TTY: 711) or visit the links below based on your needs.

Keep reading about CHOICE for Employers.