The landscape of health coverage is constantly changing, and understanding your options as an employer is the key to finding the best solution for you and your business. For employers looking for an alternative to traditional group plans, a CHOICE Arrangement could be a great fit. Below, you’ll find a breakdown of benefits, guidelines and key considerations of CHOICE Arrangements.

How are CHOICE Arrangements different from other employer plans?

Custom health option and individual care expense arrangements (CHOICE Arrangements), previously known as individual coverage health reimbursement arrangements (ICHRA), are an employer-funded health benefit that addresses the “one-size-fits-all” challenge often associated with healthcare plans. Instead of purchasing and managing a group policy, employers define a budget, and employees use that budget to select their own health coverage.

What are the key benefits for employers?

• Predictable cost control: Employers set a defined monthly allowance for each employee. This eliminates unpredictable annual premium hikes, which are common with traditional group health plans.
• Unmatched flexibility and customization: Employers can offer different contribution amounts for each employee class. These customization options help employers manage their budget while meeting the diverse needs of their workforce.
• Reduced administrative burden: Employers can streamline daily plan maintenance by partnering with an end-to-end platform solution. By reducing administrative work, HR team members can focus on other business tasks and initiatives.
• Attraction and retention of talent: Employers can offer competitive health benefits by giving employees the ability to choose their own health insurance plan and provider network. In today’s job market, this level of flexibility can be a powerful differentiator and help you find – and keep – your best employees.

Is my business eligible?

Any employer can offer a CHOICE Arrangement, regardless of size or industry. There are no federal minimum or maximum limits on the number of employees. For both small businesses and large corporations, a CHOICE Arrangement can provide a flexible health benefits solution.

How does a business establish a CHOICE Arrangement?

CHOICE Arrangement setup is designed to be straightforward. Employers can follow these five steps to get started:

Step 1. Define the allowance

Determine the monthly reimbursement allowance for each eligible employee. This is the maximum amount the employer will contribute toward an employee’s individual health insurance premiums and other qualifying medical expenses.

Step 2. Establish employee classes

Employers can define employee classes (such as full-time, part-time, salaried, hourly, seasonal and by location) and offer different benefits to each class, provided nondiscrimination rules are followed.

Step 3. Set reimbursement rules

The employer, often with the help of a third-party administrator, establishes the rules for eligible reimbursement expenses, including premiums, deductibles, copayments and prescriptions. The employer also establishes a process for submitting claims.

Step 4. Choose an administrative platform partner

Many employers opt to work with a platform partner to help manage their CHOICE Arrangement. This administrator processes requests, verifies individual coverage, maintains compliance and ensures regulation adherence, significantly reducing the administrative burden of the employer and employees.

Step 5. Communicate with your employees

A comprehensive communication plan can help employees learn about the benefits of a CHOICE Arrangement and how to select a plan that best fits their needs.

Learn more about CHOICE for employers. To walk through options for your business, contact your local Sanford Health Plan representative or call (888) 535-4831 (TTY: 711).