CMS Administrator Mehmet Oz, MD, is urging employers to consider an alternative to traditional group health plans that allows workers to select their own individual insurance coverage.
Speaking Sept. 30 at an event in Austin, Texas, Dr. Oz promoted CHOICE Arrangements, the new federal branding for individual coverage health reimbursement arrangements, as an option for employers facing rising healthcare costs.
Under CHOICE, employers provide workers with a fixed, tax-free contribution that can be used to purchase qualifying individual health insurance rather than selecting a traditional group plan for the workforce, according to CMS. Employees can use the arrangement to purchase individual coverage on or off the ACA marketplace, Medicare Parts A and B or Medicare Advantage coverage.
“These are mechanisms for employers to give their employees choice in how they want to get their insurance,” Dr. Oz said at the event.
CMS rebranded ICHRAs as Custom Health Option and Individual Care Expense, or CHOICE, Arrangements in September. The model was created during President Donald Trump’s first administration and took effect in 2020. The rebrand to CHOICE was announced Sept. 3.
The model has been gaining traction. More than 500,000 people were covered through ICHRAs at the start of 2026, according to an HRA Council report cited by Becker’s.
During the Austin event, Dr. Oz focused much of his pitch on small businesses, arguing that CHOICE can give employers greater control over their healthcare spending while expanding the number of plans available to employees.
“We’re not telling you to do it, but we’re telling you you need to look into it,” Dr. Oz said.
He said employers at the event reported lowering their healthcare spending after moving away from traditional group coverage. Dr. Oz said some businesses could potentially reduce healthcare costs by 20% to 30% by exploring alternatives, though the amount of savings would depend on the employer, workforce and available individual-market plans.
CMS has similarly promoted CHOICE as a way for employers to set predictable contribution amounts instead of absorbing changes in group premiums. The agency has rolled out new educational resources for employers as part of the rebranding effort.
Dr. Oz also characterized the model as a potential coverage option for businesses that currently do not provide health benefits. He said CMS is working on regulatory changes to make the arrangements easier for businesses to use, while other potential changes would require congressional action.
“For too long, employers and workers have been stuck with a one-size-fits-all approach to health benefits,” Dr. Oz said in a news release. “CHOICE changes that by giving businesses greater flexibility and giving employees more control over the coverage that works for them.”
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