Research from EBRI and Georgetown highlights different patterns in employer interest and adoption, with practical implications for employers and brokers evaluating their options for 2027.
Research from EBRI and Georgetown highlights different patterns in employer interest and adoption, with practical implications for employers and brokers evaluating their options for 2027.
For most of their history, Individual Coverage Health Reimbursement Arrangements have been associated with small employers looking for an alternative to traditional group health insurance. Measured by actual adoption, that is still largely the case. New employer research also points to substantial interest among larger employers.
The Centers for Medicare & Medicaid Services (CMS) now refers to ICHRAs as CHOICE Arrangements. Two recent studies give a useful picture of where the market stands heading into 2027, especially when read side by side: one from the Employee Benefit Research Institute (EBRI) and Morgan Health, and one from Georgetown University's Center on Health Insurance Reforms (CHIR).
Georgetown reports that uptake remains limited and concentrated primarily among small employers. EBRI finds substantial interest among employers with 100 or more employees. Read together, they show interest and adoption concentrated in different parts of the market. Understanding why may be one of the most important questions for employers and brokers evaluating CHOICE Arrangements for 2027.
Georgetown's multi-stakeholder study, published in September 2026, offers an important reality check. Drawing on the perspectives of 32 stakeholders across the ICHRA ecosystem, the researchers found that the business infrastructure supporting the model is growing, with more organizations helping employers design, implement and administer these arrangements. Actual employer uptake, however, remains limited and is occurring primarily among small employers.
Georgetown also identifies forces that could constrain future adoption. Recent federal policy changes have made individual-market coverage more expensive, undercutting one of the main reasons employers consider these arrangements in the first place. Administrative barriers and recent spikes in individual-market premiums may also limit adoption.
These findings matter because a CHOICE Arrangement ultimately depends on the individual insurance market available to employees. Employer budget predictability is important. So are the premiums, provider networks, plan choices and out-of-pocket costs employees encounter where they live.
The 2026 EBRI-Morgan Health Employer ICHRA Survey, fielded in spring 2026 and published in July, shows the other side of the picture. Among employers with 100 or more employees, 62% reported being somewhat or very likely to offer an ICHRA within the next two years after reviewing a description of the arrangement. EBRI reported the highest interest among businesses with 500 to 9,999 employees.
EBRI cautions that interest is not the same as implementation. Respondents answered after reviewing a description of ICHRAs, so the findings capture receptivity to the model, including among employers still learning about it.
That distinction may matter more heading into 2027 than the headline figure. Many larger employers appear willing to examine the model, but evaluating a CHOICE Arrangement and actually moving a workforce into one remain very different decisions.
A larger employer considering a CHOICE Arrangement faces operational questions that become more consequential as workforce size and geographic complexity increase.
A multi-state employer may need to evaluate individual-market coverage across many rating areas. Different employee classes may call for different eligibility rules or allowance structures. Applicable Large Employers also have to consider ACA affordability and employer shared responsibility requirements.
Census management matters more when hundreds or thousands of employee records are involved. Eligibility changes have to stay synchronized with HR and payroll systems. Enrollment may happen across many individual insurance markets at once, while coverage verification, premium administration, employee changes and reporting continue throughout the year.
CMS's employer guidance names workforces spread across multiple states as one reason employers may explore CHOICE Arrangements, and it lists employees working in the same rating area among the permitted employee classes. The larger the workforce, the more it matters whether the administrative infrastructure can support the benefit strategy consistently.
CMS's guidance lists functions that third-party administrators may help employers with:
Employee onboarding for a CHOICE Arrangement
Enrollment verification
Reimbursement processing
Documentation collection and storage
Compliance, including tax reporting
Employee communications
Reporting and tracking tools
Integration with enrollment platforms
Ongoing employee support
CMS notes that some administrators also provide decision support tools, mobile applications, premium payment integrations, Marketplace enrollment support, broker portals and payroll integrations.
We look at how these functions connect in CHOICE Arrangements Are Changing Employer Health Benefits. Administration Is What Comes Next. For employers evaluating larger implementations, the practical question is whether those processes keep working reliably as employee count, locations and administrative complexity grow.
EBRI's findings also underline the role of brokers. Of employers surveyed, 77% said a broker or benefits consultant recommendation would make them more likely to adopt an ICHRA. And 85% said they would be more likely to adopt if they could get the same quality of network and choice as a group plan.
Read together, those two findings describe what an employer is actually deciding: whether moving employees into the individual market can still deliver an acceptable benefits experience. Brokers are well positioned to evaluate that tradeoff because they already know the employer's workforce, renewal history and existing benefits strategy.
For some employers, traditional group coverage will continue to make more sense. For others, a CHOICE Arrangement may deserve serious evaluation — particularly for employers dealing with geographic complexity, difficult renewals or a need for tighter control over health-benefit spending. Having both options gives brokers another strategy to bring into client conversations.
Georgetown found cost to be the primary consideration for employers offering ICHRAs. The structure lets an employer lock in a level of spending and plan future increases more predictably. Employer predictability alone, though, cannot tell you whether an arrangement works.
Employees buy coverage in the individual market, where premiums and plan availability vary by geography. Provider networks, prescription coverage, deductibles and other out-of-pocket costs all affect how much value employees get from an employer's allowance. When employees choose a plan, CMS points them to:
Monthly premiums
Prescription drug coverage
Deductibles and out-of-pocket costs
Preferred doctors and hospitals
Their family's anticipated healthcare needs
For employers operating across several states, those differences make allowance design and local market analysis especially important.
CHOICE Arrangements open the individual market to employees, where a group plan typically offers a handful of options the employer selected. That can substantially widen the range of choices, and it also changes the enrollment experience.
Employees may need to compare premiums, networks, prescriptions, deductibles and family coverage across plans they have never evaluated before. Employers therefore need a plan for how employees will get education and enrollment help during the transition and after coverage begins. CMS's list of administrator services reflects this need: it names employee communications, ongoing employee support and enrollment-platform integration, with Marketplace enrollment support offered by some administrators. For a larger workforce, the quality of that support can become a significant implementation factor.
Employers considering a CHOICE Arrangement for 2027 should start with the workforce: where employees live, what individual-market coverage is available in those locations, how current employer costs compare with potential allowance strategies, and how a change would affect different employee populations.
Operational questions matter as well:
How will census data be imported and validated?
How will employee classes and eligibility be managed?
How will ACA affordability be evaluated?
What enrollment options and licensed assistance are available?
How will coverage be verified?
How will premium activity and reimbursements be administered?
How will payroll and eligibility changes be coordinated?
How will monthly reconciliation and reporting work?
How will employees receive ongoing support?
Can the administration model support multiple states and a growing workforce?
The answers become more consequential as workforce size increases.
Federal agencies have given CHOICE Arrangements considerably more visibility this year. In September 2026, CMS and the Small Business Administration began promoting the CHOICE Arrangement name and related resources. CMS has expanded its employer-facing guidance on how the arrangements work and how employers can evaluate them.
The newest independent research is a useful counterweight to the enthusiasm around the category. Georgetown shows that actual uptake remains limited and identifies economic and administrative barriers that could constrain growth. EBRI shows substantial employer interest, particularly among organizations with 100 or more employees, while cautioning that interest is not the same as implementation.
Those findings do not tell us that larger employers are already moving to CHOICE Arrangements in significant numbers. They tell us that many of them appear willing to consider the question.
For employers, brokers and administrators, 2027 should offer real evidence of how often that interest turns into implementation, and what operational capabilities are required when it does.
Lirvion provides CHOICE Arrangement administration for employers, brokers and benefits organizations. Our focus is the operational work required to support an arrangement over time: eligibility, enrollment support, coverage verification, premium visibility, reconciliation, reporting and ongoing administration.
CHOICE will not fit every employer. Where it does fit, the administration needs to work for both the organization and its employees.
Talk with a Lirvion expert about your workforce, benefits strategy and approach to CHOICE Arrangement administration.
