Small Business Health Insurance in North Carolina
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General & Strategy
Give Employees Choice. Keep Costs Predictable.
In September 2026, CMS and the SBA renamed the ICHRA the CHOICE Arrangement. The rules haven't changed, so you'll still see both names used.
A CHOICE Arrangement empowers North Carolina employers to offer personalized health benefits without the unpredictability of traditional group plans. Instead of selecting one plan for everyone, you set a monthly allowance and let each employee choose coverage that fits their needs—while you control your budget.
In today's fast-changing world, employers need more innovative, more affordable ways to provide health insurance. CHOICE Arrangements offer a flexible, cost-effective solution for businesses of any size, combining the tax advantages of employer-sponsored coverage with the flexibility employees want.
Predictable Costs Set your monthly allowance and budget with confidence: no surprise renewal increases or claims-based adjustments. You decide what you spend—period.
Employee Choice Every employee chooses their own plan based on their doctors, prescriptions, and family needs—not a one-size-fits-all group policy.
ACA Compliance A CHOICE Arrangement satisfies the employer mandate for applicable large employers (50+ FTEs) when structured to meet affordability requirements.
Tax Advantages Employer contributions are tax-deductible. Employee reimbursements are tax-free. Everyone saves compared to after-tax premium payments.
Simpler Administration No more managing renewals, negotiating with carriers, or worrying about participation rates. No carrier restrictions for remote workers. Offer different allowances by employee class. Set allowances and let employees handle the rest.
With a CHOICE Arrangement, your employer gives you a monthly allowance, and you choose the individual health plan that fits you and your family. Health Plans of NC helps you compare plans and get the most from your allowance.
Flexibility Select plans based on your preferred doctors, prescriptions, and family needs—not a one-size-fits-all group policy.
Tax Advantages Employee reimbursements are tax-free, so employers and employees both save compared with paying premiums after tax.
Portable Coverage Employees own their individual plans. If you leave your job, you can keep your plan by paying the full premium yourself, without COBRA.
Premium Tax Credits If you accept a CHOICE Arrangement, you can't also get marketplace premium tax credits. If your employer's CHOICE Arrangement isn't affordable under ACA rules, you can decline it and use tax credits instead. We'll help you compare.
Feature | CHOICE Arrangement | Group Plan |
Predictable employer costs | ✓ | ✗ |
Employee plan choice | ✓ | ✗ |
No participation minimums | ✓ | ✗ |
Available to any employer size | ✓ | ✓ |
No annual renewal negotiations | ✓ | ✗ |
Coverage is portable if the employee leaves | ✓ | ✗ |
Tax-advantaged for employers | ✓ | ✓ |
Satisfies the ACA employer mandate | ✓ | ✓ |
Group plan premiums can change at each annual renewal. With a CHOICE Arrangement, your allowance stays at the amount you set.
A CHOICE Arrangement flips the traditional model—you fund, they choose.
Decide how much to contribute monthly. You can set different amounts by employee class (such as full-time, part-time or location) and, within a class, by age or family size.
Each employee enrolls in an individual health plan through the marketplace or directly with a carrier. Employees who accept the CHOICE Arrangement can't also get marketplace premium tax credits. If it isn't affordable under ACA rules, an employee can decline it and use tax credits instead.
Our agents help each employee compare plans and enroll, so they get the most from their allowance. Our agents and our administration partners, Mutual Group Benefits and zizzl health, handle the plan paperwork.
Employees submit proof of coverage and receive tax-free reimbursements, typically through payroll.
CHOICE Arrangement adoption is growing across employer sizes
More than 20,000 U.S. businesses now offer a CHOICE Arrangement or QSEHRA, and lives covered by CHOICE Arrangements passed 500,000 at the start of 2026. Adoption among large employers (50 or more full-time-equivalent employees) more than doubled on average from 2025. Notably, more than two-thirds of small businesses offering a CHOICE Arrangement previously offered no health coverage, suggesting CHOICE Arrangements are expanding coverage rather than simply replacing group plans. 1
Customize by Employee Class
Employee Groups
Full-time employees: $500/month
Part-time employees: $250/month
Higher allowance to support employees in states with expensive premiums
Different amounts for employee only versus family coverage
Allowed Employee Classes
Classes allowed under the federal CHOICE Arrangement rules include:
Full-time vs. part-time
Salaried vs. hourly
Geographic location
Seasonal vs. non-seasonal
Employees under 25
Union vs. non-union
Employees in a waiting period
Non-resident aliens with no U.S. income
Staffing-firm employees working at your business
Minimum class sizes apply if you offer a traditional group plan to some classes and a CHOICE Arrangement to others.
CHOICE Arrangements work for businesses of all sizes. Here's who benefits most:
You've wanted to offer benefits but couldn't meet participation requirements or afford group premiums. A CHOICE Arrangement changes that.
No minimum participation—even if only one employee enrolls
Compete with larger employers for talent
Simple to set up and maintain
Group plan renewals are eating into your budget and limiting your flexibility. A CHOICE Arrangement lets you control costs as you scale.
Meets ACA employer mandate requirements
Offer different allowances by employee class
Escape the renewal increase cycle
Employees in different locations need access to local doctors and networks. With a CHOICE Arrangement, each employee chooses an individual plan available where they live, and we'll help your North Carolina employees compare their options.
Employees choose plans with their preferred doctors
No group network limitations
Vary allowances by geography if needed
Part-time and seasonal employees have been tough to cover. The flexibility of a CHOICE Arrangement changes the equation.
Different classes for FT, PT, and seasonal workers
Coverage starts when you say—no waiting periods required
Employees can keep their individual plan after seasonal work ends, though the allowance stops
If you're facing a difficult renewal, or just want to understand your options, we can help.
Custom cost comparison: current plan vs. a CHOICE Arrangement
Analysis by employee age, location, and family status
Employee class structure recommendations
ACA affordability compliance review
Implementation and employee communication support
1. HRA Council. "Strong ICHRA Growth Among Large Employers Strengthens ACA Marketplace and Risk Pool, HRA Council Report Finds." PR Newswire, August 12, 2026. Growth Trends for ICHRA & QSEHRA, Vol. 5. hracouncil.org/report
