Why HR leaders should pay attention to CHOICE arrangements

A few weeks ago, Hooper met with Dr. Mehmet Oz and senior officials at the Centers for Medicare & Medicaid Services (CMS) to discuss the future of what the administration is now calling “CHOICE arrangements,” its rebrand of the ICHRA model.

“I’m very convinced that at some point we’ll look back in America and say it all flipped over to this model,” he told HRD America. “If it takes three years, five years, 10 years – I don’t know – but it’ll get there.”

The cost pressure driving interest

The timing matters for HR decision-makers. As HRD has reported, 42 percent of employers reported health plan premium increases of 10 percent or more at their most recent renewal, according to Gallagher’s 2026 Benefits Benchmarks Report, with pharmacy costs emerging as the most significant and least controllable driver. Under a traditional group plan, those cost increases land on the employer’s balance sheet year after year.

Under an ICHRA model, the employer’s liability is fixed. The organization contributes a defined monthly amount per employee – differentiated by role, employment status, or geography if needed – and employees use that allowance to purchase individual coverage on the Affordable Care Act (ACA) marketplace. If premiums rise in the individual market, the employer’s contribution stays the same unless they choose to adjust it.

“They don’t want to be managing a health plan,” Hooper said of the employers he works with. “And it’s odd that in the US, that’s how we’ve evolved our system. If they can get out of it but still take care of their employees and provide a benefit, they’ll jump out right away.”