Dr. Mehmet Oz stood before Austin business leaders this week to make the case for a health insurance alternative that lets employers hand employees tax-free cash to shop for their own coverage instead of signing everyone up for one group plan. The federal official pitched the arrangement, known as CHOICE, as a fix for a state where insurance costs keep climbing and marketplace options keep shrinking.
Oz, administrator of the Centers for Medicare and Medicaid Services, and Kelly Loeffler, administrator of the U.S. Small Business Administration, met with local business leaders in Austin and pitched the arrangement as an alternative to traditional employer-sponsored health insurance, according to the Austin American-Statesman. Oz spoke at Arena Hall in Austin on Wednesday, per the same report. The Custom Health Option and Individual Care Expense Arrangement, or CHOICE, was previously known as an Individual Coverage Health Reimbursement Arrangement, or ICHRA — a name federal officials dropped during a September 3 press conference at Hancock Health's Hancock Wellness Center in New Palestine, Indiana, according to Remodel Health. The Austin stop followed that national rollout by less than a month.
Under CHOICE, employers give workers tax-free money to buy their own health insurance, either through the Affordable Care Act marketplace or by comparing off-marketplace plans through an insurance broker, the Statesman's report notes. There is no maximum or minimum employer contribution, and companies can offer funds to employees flat or based on the number of dependents, though federal regulations require employers to contribute enough to meet an affordability threshold to claim a tax benefit. Employers must offer CHOICE to at least 10 to 20 employees depending on company size, and employees can make tax-free payroll deductions to cover any remaining insurance costs — though workers using CHOICE cannot receive federal marketplace subsidies, which are otherwise available to people making less than 400% of the federal poverty level.
A Decades-Old Idea With a Fresh Name
Individual Coverage Health Reimbursement Arrangements were originally established under federal regulations issued by the Trump administration in June 2019, following a 2017 executive order, and became available to employers on January 1, 2020, according to Healthinsurance.org. Oz said the COVID-19 pandemic and prior administrative disinterest halted momentum on the programs, per the Statesman. While CHOICE does not alter the underlying tax or legal framework of the older ICHRA rules, federal officials and plan administrators are leaning on the simpler name to accelerate adoption among employers facing double-digit group plan rate hikes, according to DataPath.
That technical limitation matters because federal tax law strictly prohibits pre-tax payroll deductions for plans bought through the public ACA Marketplace — pre-tax deductions for remaining premium balances are legally restricted to off-exchange plans paired with a Section 125 cafeteria plan, per Summit Health Benefits. It is a nuance that could trip up workers trying to stretch employer CHOICE dollars as far as possible.
Local Employers Describe Their Experience
Brand Newland, CEO of Austin-based Goldfinch Health, has used CHOICE-style plans for 40 employees since 2021, increasing the employer contribution each year to offset rising healthcare costs, the Statesman reported. Rick Valdez, CEO of Corsair USA, which has three employees, said CHOICE enabled him to provide insurance for his family and now serves as his Medicare supplementary insurance.
Peter Nelson, deputy administrator and director of the Center for Consumer Information and Insurance Oversight at CMS, said CHOICE could help employers meet their needs while expanding health insurance coverage, and he expects the arrangement could reach 20 million people with health insurance within five years, according to the Statesman's account. Nationally, insurance rates depend partly on the number of people in a plan and their health, and large risk pools can offset the costs of covering people who need more care — a dynamic that shapes how well CHOICE performs as it scales.
Texas's Uninsured Rate Looms Over the Pitch
Texas has the highest share of uninsured people in the country, with 19.2% of residents under age 65 lacking health insurance and 13.7% of Texas children uninsured, according to a KFF report cited by the Statesman. Census Bureau statistics reported in August 2026 similarly showed Texas adults aged 19 to 64 facing a 21.6% uninsured rate compared to a national average of 11.3%, a gap Hoodline detailed in earlier coverage of Texas's healthcare monopolies.
Texas ACA marketplace enrollment fell 4% from 2025, even as average marketplace premiums jumped 35% in 2026 and are expected to climb another 13.1% on average in 2027, per the Statesman's reporting. Employers are expected to pay 8% more for employee health insurance in 2027, according to the Business Group on Health figures cited in the same article. The instability echoes what Hoodline reported in April, when Baylor Scott and White pulled out of the marketplace, forcing roughly 225,000 Texas policyholders to find new plans.
The Administration's Broader Pitch
Oz called CHOICE a practical method for improving affordability and access to insurance, and described the Trump administration's broader efforts to reduce healthcare costs — through lower prescription drug prices and reduced Medicare and Medicaid fraud — as seismic, according to the Statesman. He said CHOICE and other CMS provisions aim to put more money into people's paychecks.
Loeffler noted that 98% of U.S. companies are small businesses with fewer than 50 employees, and estimated that many small businesses currently cannot afford health insurance for their workers, per the same report. That framing lines up with broader market data: an August 2026 industry report by the HRA Council found that employer adoption of individual coverage HRAs roughly doubled year-over-year, covering more than 500,000 employees and dependents across more than 20,000 U.S. businesses, according to Becker's Payer Issues. The same report found large employers with 1,000 or more workers were the fastest-growing adoption segment, surging 178% year-over-year — countering the idea that these arrangements appeal only to small businesses, as Insurance Business reported. A separate 2026 market analysis by healthcare platform SureCo estimated overall participation across all individual coverage HRAs reached approximately 1 million covered lives nationwide this year.
Texas's Hometown Administrator
Take Command Health, the Dallas-based platform administering CHOICE plans across Texas, checks monthly whether employees remain enrolled in their chosen plan, collects employer contributions and employee payroll deductions, and pays plan premiums on behalf of its clients, per the Statesman. The company, founded in 2014 at the Wharton School, was the sole HRA platform provider invited to participate in the White House's original 2019 rollout of ICHRA regulations, according to Take Command Health. It now administers CHOICE arrangements for 10,000 employers and serves 100,000 employees in Texas, with about 80% of its clients being small businesses, the Statesman reported.
Data from the HRA Council's August 2026 report found that 56% of employees purchasing individual ACA marketplace coverage through an ICHRA or CHOICE plan this year were under age 45 — a younger demographic that could help stabilize risk pools in the broader individual marketplace, per Becker's Payer Issues. Whether that holds true in Texas may depend on how many stable, affordable plan choices remain on a marketplace that has already seen major carriers like Baylor Scott and White head for the exits.
