A new name for a better way to buy health insurance

Federal officials just gave one of the most promising innovations in health insurance a badly needed name change.The new name gets at what makes these arrangements so valuable. Instead of choosing coverage for workers, an employer can give them tax-free money and let them pick the individual-market plan that best fits their needs. That puts employees, rather than employers, in control of their health insurance.Most workers don’t have anything approaching that level of choice today. According to KFF, 66% of employers offering health benefits in 2025 offered only one type of plan. By contrast, Manhattan Institute scholar Chris Pope found that the typical consumer shopping in the individual market had 88 plans to choose from in 2023.A CHOICE Arrangement opens that menu to more people. One employee might prefer lower premiums and a higher deductible. Another might value a broader doctor network. A third might want richer benefits. Each can choose accordingly.The model can be especially valuable for small businesses. A traditional group plan can expose employers to unpredictable premium increases and force them to manage a complex benefit far outside their core competency. With a CHOICE Arrangement, an employer can decide in advance how much it can afford to contribute — and let workers shop for coverage themselves.For some small businesses, that flexibility can make the difference between contributing toward employees’ coverage and offering no health benefit at all.CHOICE Arrangements can also strengthen the individual market by bringing more people into it. A larger market can give insurers more reason to compete for their business.And they give workers a reason to pay attention to value. Someone who finds a better deal can choose it. Someone who wants more expensive coverage can pay the difference.Employers are beginning to catch on. More than half a million Americans were covered through ICHRAs at the beginning of 2026 — twice as many as a year earlier. READ THE WASHINGTON EXAMINER’S COVERAGE OF THE 25TH ANNIVERSARY OF 9/11But according to Peterson-KFF‘s Health System Tracker, many employers and workers still don’t know the option exists. The acronym surely hasn’t helped.So the rebrand is welcome. But the name is the least interesting thing about it. CHOICE Arrangements offer employers an easier way to help finance coverage and give workers something too few have today — control over their own health insurance.Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The World’s Medicine Chest: How America Achieved Pharmaceutical Supremacy—and How to Keep It (Encounter 2025). Follow her on X @sallypipes.