Broker Cheat Sheet
Updated
A useful CHOICE comparison starts with the funding model. Under a traditional group plan, the employer selects the coverage offered to participating employees. Under a CHOICE Arrangement, formerly ICHRA, the employer sets a contribution and eligible employees obtain their own qualifying individual coverage.
CMS’s employer guide identifies ten basic employee classes, with combinations of two or more also permitted. The classes include full-time, part-time, seasonal, salaried, non-salaried, certain staffing-firm employees, collectively bargained employees, certain nonresident aliens, employees in a waiting period, and employees working in the same rating area. Class design must follow the rules; it is not a way to select individual workers informally.
Coverage can be purchased on or off an ACA Marketplace. Medicare Parts A and B together or Medicare Advantage can also qualify. Short-term, indemnity, faith-based sharing, and supplemental products are not equivalent substitutes for qualifying major-medical insurance.
The allowance is employer-funded. Employers can use a consistent amount or permitted variations for employee classes, age, and covered dependents. Within a class, age-based contribution variation cannot exceed a three-to-one ratio. The arrangement must also specify which eligible expenses it reimburses, such as premiums alone or premiums plus permitted medical expenses.
For Applicable Large Employers, establishing an allowance is not the entire compliance analysis. Affordability and employer shared-responsibility rules still apply. Enrollment verification, substantiation, notices, and tax reporting also need an owner and a reliable process.
Agent Takeaway: Build the comparison around five questions: who is eligible, which coverage qualifies, what the employer contributes, what employees still pay, and who administers the arrangement. Confirm those answers before presenting a price comparison.
This is an educational overview, not a replacement for employer-specific legal, tax, or compliance advice. Confirm the current requirements with qualified advisers before implementing an arrangement.
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