Church benefit plans

CHOICE Arrangement (formerly ICHRA)

Reimburse employees tax-free for individual health insurance and qualified medical expenses, with no group health plan required.

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CHOICE Arrangement plan package: cover and plan document pages

A modern alternative to group health insurance

The CHOICE Arrangement is the new name for the Individual Coverage HRA (ICHRA). The rules haven’t changed. Instead of sponsoring a traditional group plan, your church reimburses employees tax-free for the individual health insurance they choose, along with qualified medical expenses. Employees get coverage that fits their needs, and the church controls what it spends.

  • Any size churchNo employee limit
  • Church sets the amountsPredictable, controllable costs
  • Employee choiceEach employee picks their own coverage
  • Plan documents includedPrepared for your church
Quick check

Is this the right plan for your church?

  1. Are you covering just one employee, such as your pastor?Yes: the One-Person HRA is built for that. No: go to question 2.
  2. Do you offer a group health plan to any employees?Yes: a QSEHRA isn’t allowed, but a CHOICE Arrangement can cover employee classes that aren’t on the group plan. No: go to question 3.
  3. Do you have fewer than 50 full-time employees?Yes: a QSEHRA (IRS limits, same terms for everyone) or a CHOICE Arrangement (you set the amounts by employee class). No: a CHOICE Arrangement.

Still unsure? Our guide Health Benefits for Churches walks through the decision, or book a Pro Advisor HRA session.

Why churches choose it

Flexibility for employees, control for the church

No group plan neededReimburse individual health insurance coverage and qualified medical expenses instead.
Employee choiceEach employee selects the coverage that best fits their situation.
Cost controlThe church sets the reimbursement amounts, so benefit costs are predictable.
Classes of employeesAmounts can be set differently for defined classes, such as full-time and part-time staff.
What can be reimbursed

Premiums and qualified medical expenses

  • Individual health insurance premiums
  • Co-pays and deductibles
  • Prescription medications
  • Vision care, exams, glasses and contacts
  • Dental care
  • Chiropractic and other eligible treatments
  • Long-term care services
  • Certain over-the-counter medications (based on plan design)
Good to know

Plan requirements

  • Employees must be enrolled in individual health insurance (or Medicare) to receive reimbursements.
  • The same class of employees can’t be offered both a group plan and a CHOICE Arrangement.
  • Employees receive a written notice at least 90 days before the plan year begins.
  • The church keeps records showing employees’ coverage.
Example in numbers

What tax-free reimbursement is worth

Suppose the church sets $400 a month for its full-time class, and an employee uses it for individual health insurance premiums: $4,800 for the year.

Through the CHOICE Arrangement

  • Reimbursed to the employee$4,800
  • Federal income tax$0
  • Employee Social Security & Medicare$0
  • Church Social Security & Medicare$0
  • Employee keeps$4,800

Paid as extra salary instead

  • Added to pay$4,800
  • Federal income tax (12% bracket)$576
  • Employee Social Security & Medicare (7.65%)$367
  • Church Social Security & Medicare (7.65%)$367
  • Employee keeps$3,857

Illustration only, for a non-minister employee in the 12% federal bracket; state income tax not included. Ministers pay self-employment tax instead of Social Security and Medicare withholding, so their savings differ. Our team can run the numbers for your church.

Plan ahead

When to get started

  1. 1Order your planAllow time for the enrollment form and benefits advisor review.
  2. 2Give employees noticeEmployees receive a written notice at least 90 days before the plan year begins. For a January 1 plan year, that’s by early October.
  3. 3Plan year beginsEmployees can be reimbursed for eligible expenses.

The plan year doesn’t have to follow the calendar year. Ask us about other start dates.

How it works

Three simple steps

  1. 1Order in our storeAdd the plan to your cart and complete the enrollment form about your church.
  2. 2Benefits advisor reviewAn advisor checks your submission for accuracy, completeness and IRS compliance.
  3. 3Receive your plan packageYour plan document, SPD and forms arrive with easy signing instructions.

Order your plan

What you receive

Your plan package

Prepared for your church and kept on file for compliance.

Resolution to adoptMeeting minutes recording the church’s decision to establish the plan as an employee benefit.
Customized plan documentThe rules, benefits and terms of your plan, prepared for your church and kept on file for IRS review.
Summary Plan DescriptionAn easy-to-read guide for employees with the federally required disclosures.
Election and claim formsPersonalized forms for employees to join the plan and submit expenses for reimbursement.

HRA Support Plan for Churches

Setting up the plan is the first step. Keeping it compliant takes ongoing attention. Add year-round help with eligibility questions, reimbursement rules, required plan updates, employee documentation and payroll reporting.

See the HRA Support Plan

Compare HRA plans

Which HRA fits your church?

CHOICE Arrangement
(formerly ICHRA)		 QSEHRA One-Person HRA
Best for Churches of any size that want to reimburse individual health coverage Churches with fewer than 50 full-time employees and no group health plan Churches reimbursing one employee, often the pastor
Contribution limits The church sets the amounts IRS annual limits apply The church sets the amounts
Employee groups Can vary by class of employee Same terms for all eligible employees One employee
Learn more You are here QSEHRA One-Person HRA

Not sure which one fits? Our guide Health Benefits for Churches compares all three with a decision flowchart, church examples and a cost comparison workbook.

Related resources

Helpful next steps

Health Benefits for Churches guideCompares the QSEHRA, CHOICE Arrangement and One-Person HRA, with a decision flowchart, church examples and a cost comparison workbook.Pro Advisor HRA sessionA 30-minute one-on-one session with our team to talk through your church’s situation.HRA Support PlanYear-round help keeping your plan compliant after it’s set up.All church benefit plansPremium Only Plan, Health FSA, Dependent Care Assistance Plan and more.
FAQ

Common questions

What is a CHOICE Arrangement?
CHOICE Arrangement is the new name, announced by CMS and the SBA in September 2026, for the Individual Coverage HRA (ICHRA). The rules haven’t changed. It lets a church reimburse employees tax-free for individual health insurance and qualified medical expenses instead of offering a traditional group plan.
Is there a limit on how much the church can reimburse?
The church decides the amounts. Unlike a QSEHRA, there’s no IRS annual maximum.
How is this different from a QSEHRA?
A QSEHRA is limited to churches with fewer than 50 full-time employees, has IRS annual limits and offers the same terms to everyone. A CHOICE Arrangement works for any size church and can vary by class of employee. See the comparison above.
Do I need the HRA Support Plan?
It’s optional. Maintaining an HRA takes ongoing attention to compliance, documentation and administration. The annual HRA Support Plan gives you year-round help.
I already ordered. Where do I find my order?
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Ready to set up your CHOICE Arrangement?

Order in our store, or schedule a conversation with our team. Questions? Call (888) 421-0101.

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