Is ICHRA a law or a regulation?

Today ICHRA exists under a 2019 federal regulation issued by the Departments of HHS, Labor, and Treasury. The CHOICE Act would move it into statute. Either way, ICHRA is currently valid and usable.

There is no indication it will. Adoption is growing rapidly and support is bipartisan; the CHOICE Act would actually make ICHRA more permanent by codifying it. Regulations can change, which is part of why codification is being pursued.

Does the CHOICE Act change how ICHRA works?

The core mechanics — a tax-free employer allowance for individual coverage — are expected to remain the foundation. Codification is mainly about permanence and legal footing, though details can evolve as the bill moves.

Is the CHOICE Act bipartisan?

ICHRA and its predecessor QSEHRA have bipartisan roots, and the codification effort has drawn interest across the aisle. As with any bill, though, passage is not guaranteed.

Should I wait for the CHOICE Act before setting up an ICHRA?

No. ICHRA is already fully valid under current law, and most employers who adopt it renew year after year. The CHOICE Act would strengthen an option you can use today.

Policy

The CHOICE Act & the Future of ICHRA

Q: Where can I follow the CHOICE Act?

We track ICHRA policy and update our guides as things change. For how current or proposed policy affects your specific situation, reach out and we''ll give you a plain-English update.

ICHRA exists today because of a 2019 federal regulation. As of mid-2025, Congress is considering making it permanent in statute through the CHOICE Act — the Custom Health Option and Individual Care Expense arrangement (HRA Council, 2024–2025). Here''s what that means, and why it doesn''t change the fact that ICHRA is fully valid and usable right now. This is general information, not legal advice.

By Joe Rosenblatt · Founder & ICHRA Broker, The ICHRA Broker

Key facts

CHOICE stands for: Custom Health Option and Individual Care Expense
ICHRA''s current basis: 2019 tri-agency federal rule
Status: Under congressional consideration (2025)
Main effect: Would codify ICHRA in statute
Support: Bipartisan
Do you need to wait: No — ICHRA is valid today

What is the CHOICE Act?

The CHOICE Act — short for Custom Health Option and Individual Care Expense — is proposed federal legislation that would write ICHRA into statute rather than leaving it solely to regulation. In practice, it would give the arrangement a firmer, more permanent legal foundation and a formal name in the law (HRA Council, 2024–2025).

Why codify ICHRA?

ICHRA was created by a 2019 rule issued by the Departments of Health and Human Services, Labor, and Treasury. Regulations can be revised by future administrations, so codifying ICHRA in statute would make it more durable and predictable — reassuring employers who want confidence that the benefit they build on will remain available long term.

What could change under the CHOICE Act

Because the bill is still evolving, specifics can shift, but codification generally aims to lock in ICHRA''s framework and could pave the way for additional enhancements or incentives over time. The core mechanics employers rely on today — a tax-free allowance for individual coverage — are expected to remain the foundation.

How ICHRA became law: a short timeline

ICHRA''s path helps explain the current push to codify it.

2016: QSEHRA created in the 21st Century Cures Act.
2019: The tri-agencies finalize the ICHRA rule.
2020: ICHRA becomes available to employers of all sizes.
2025: Congress considers codifying ICHRA via the CHOICE Act.

Bipartisan support

ICHRA has drawn interest from both parties. QSEHRA was enacted under a Republican Congress and signed by a Democratic president; ICHRA was finalized under a Republican administration. That bipartisan lineage is part of why codification is being taken seriously.

What it means for employers considering ICHRA now

The most important takeaway: you do not need to wait. ICHRA is already fully valid under current federal law, and more than nine in ten employers who adopt an HRA renew it year after year (HRA Council, 2024–2025). Codification would strengthen an option you can already use today, not create one you are missing.

What it means for employees

For employees, codification would mostly mean added stability. The day-to-day experience — choosing an individual plan and being reimbursed tax-free — stays the same, with the reassurance that the benefit rests on firmer legal ground.

The uncertainty to keep in mind

Legislation is unpredictable. Bills can be amended, delayed, or fail to advance, and timelines are hard to forecast. It is wise to follow the CHOICE Act as a positive signal for ICHRA''s future without treating any particular outcome as guaranteed.

How to stay informed

We track ICHRA policy developments and reflect meaningful changes in our guides. If you want to understand how current or proposed policy affects your specific plans, the simplest path is to ask us directly for a plain-English read on where things stand.

About this information

This page summarizes proposed legislation as reported for 2024–2025; details may have changed since. It is general educational information, not legal advice. For decisions about your benefits, consult qualified advisors.

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Frequently asked questions

It is proposed federal legislation — the Custom Health Option and Individual Care Expense arrangement — that would codify ICHRA in statute rather than leaving it to regulation alone, giving it a more permanent legal foundation.

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