There’s a quiet storm brewing in the world of small business health benefits and, no surprise, hardly anyone’s talking about it. But we should be. Because buried in a piece of legislation with a name so aggressively cheerful it could only have come from Washington, “The One Big Beautiful Bill”, are a few proposed changes to ICHRA that could reshape how small businesses take care of their people.
Let me back up.
If you’ve never heard of ICHRA before (or if you have and still don’t know how to pronounce it—ICK-ruh, by the way), it’s basically a way for employers to give their people money, tax-free, to buy health insurance on their own. No wrangling group plans. No managing participation rates. No holding your breath every time open enrollment comes around surprised at how much your plan is going up this year. Just set your budget and let your employees pick what works for them.
That’s what we do at StretchDollar. We believe health benefits shouldn’t be a full-time job for a small business owner.
And ICHRA is one of the best tools we’ve got to make that belief a reality. There are also a lot others who think so too. Oscar Health and Ambetter are just a few of the carriers building robust individual plans to support ICHRA.
ICHRA’s not just staying, it’s evolving. Let’s break down what could change.
Wait, Are We Really Renaming ICHRA?
Yup. If this bill passes, we might have to retire the acronym I’ve spent the last two years patiently explaining, defending and pronouncing. Say hello to the Custom Health Option and Individual Care Expense Arrangement—or, mercifully, CHOICE.
Whatever you call it, the updates matter more than the acronym. And there are five big ones worth paying attention to.
1. ICHRA Gets Locked Into Law
Right now, ICHRA is alive and well thanks to a 2019 regulatory rule. But that means it could vanish just as easily with a new administration. The proposed legislation would cement it into law, making it permanent.
Why It Matters: For small business owners, predictability is everything. You don’t want to invest in setting up a benefit only to see it pulled out from under you because of a political shift.
2. A New Tax Credit for Small Businesses
If you’ve got fewer than 50 employees and you’re offering ICHRA for the first time, this bill would give you a $100/month credit per employee in Year 1 and $50/month in Year 2. That’s real money.
Why It Matters: Health benefits are one of the top three expenses for small employers, right up there with payroll. This is a big ol’ nudge in the direction of offering coverage without breaking your budget.
3. Pre-Tax Premiums Through Cafeteria Plans
This one’s a sleeper hit. Right now, if an employee’s ICHRA allowance doesn’t fully cover their plan, they pay the difference post-tax. Under the new bill, they’d be able to pay the rest pre-tax, through a cafeteria plan.
Why It Matters: This lowers out-of-pocket costs for employees and lets them stretch those dollars further. See what I did there?
4. Shorter Notice Periods
Currently, you have to give employees 90 days’ notice before renewing your ICHRA. The new bill cuts that down to 60.
Why It Matters: Planning benefits is already a headache. Shorter timelines mean more flexibility when things change.
5. Offer ICHRA and a Group Plan to the Same Class
Today, you have to choose one or the other. But if the bill passes, you’d be able to offer both ICHRA and group coverage to the same employee class.
Why It Matters: That’s huge. Not every employee wants—or needs—the same kind of coverage. Hybrid models let you meet people where they are without going all-in on a one-size-fits-all solution.
So, Why Should You Care?
Because this is a peek into the future of health benefits.
Right now, most Americans get their health insurance through work. That system is...flawed. It’s rigid, expensive, and often falls apart the moment you change jobs.
If you’re a small business owner and haven’t looked into ICHRA (potentially CHOICE), now’s the time.
Because if this bill passes, offering your team flexible, affordable health benefits could be easier and cheaper than ever before. Just as we’re seeing small group plans fade away, or become more out of reach than ever. (Check out my article here: The Hidden Cost of Group Health Insurance — Discontinuity of Care.) And if it doesn’t pass? Well, the writing’s still on the wall. The future of health insurance is simpler, personal, and portable.
Let’s stop tying our healthcare to outdated systems and start giving people real options.
We’ll keep watching the legislation, so you don’t have to. But in the meantime, we’ll be here—helping small businesses stretch their dollars and take care of their teams.
