What Is the CHOICE Arrangement Act?

Originally introduced in June 2023, the CHOICE Arrangement Act (H.R. 3799) was a proposed bill designed to give employers, especially small businesses, more flexibility in how they offer health benefits to their employees. The bill aimed to expand access to tax-advantaged health reimbursement arrangements (HRAs) and make it easier for businesses to provide affordable, customizable coverage options.

Although the CHOICE Arrangement Act passed the House in 2023, it never advanced in the Senate and ultimately did not become law. However, in 2025, key provisions from the bill were revived and improved under the One Big Beautiful Bill, which passed the House on May 22, 2025, but has yet to be reviewed by the Senate.

In this article, we’ll break down what the original CHOICE Arrangement Act proposed, why it stalled, and how its core ideas are being given new life and potentially a broader impact through the One Big Beautiful Bill (OBBB).

What Is the CHOICE Arrangement Act (H.R. 3799)?

The CHOICE Arrangement Act (H.R. 3799) is a healthcare-focused bill introduced in the U.S. House of Representatives in 2023. It was composed of six distinct sections—or “Titles”—that aimed to expand access to health benefits, especially for small businesses, by improving flexibility, simplifying processes, and strengthening existing reimbursement models like Individual Coverage Health Reimbursement Arrangements (ICHRAs) and Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs).

Here’s a simplified breakdown of what each title included:

Title I – Association Health Plans Act

This section provides the legal authority for Association Health Plans (AHPs) to be treated as a single, large employer under the Employee Retirement Income Security Act (ERISA). This would allow small businesses to band together across state lines to purchase group health insurance, giving them access to better rates and broader plan options. While AHPs have existed under previous DOL rules, this title sought to cement those rules in law and reduce ongoing legal uncertainty.

Title II – CHOICE Arrangement Act

This was the core of the bill. It provided statutory authority to Individual Coverage HRAs (ICHRAs), a model that allows employers to reimburse employees tax-free for their individual health insurance premiums and qualified out-of-pocket medical costs. It aimed to reinforce rules issued in 2019 by federal agencies and aimed to rename these arrangements as Custom Health Option and Individual Care Expense (CHOICE) arrangements.

Title III – Self-Insurance Protection Act

Title III aimed to clarify that stop-loss insurance, used by self-insured employers to protect against high-cost claims, is not considered traditional health insurance under ERISA, and that federal law preempts state laws that would prevent employers from securing it.

Title IV – Small Business Flexibility Act

This section directed the IRS to proactively notify small businesses, especially those in rural areas, about affordable coverage options like ICHRAs, QSEHRAs, and the Small Business Health Care Tax Credit. The goal was to increase awareness and access to flexible, tax-advantaged health benefits.

Title V – Rescissions

Title V aimed to reduce funding from the Prevention and Public Health Fund for fiscal year 2024. This was a cost-saving measure to offset the bill’s proposals.

Title VI – Sense of Congress on Healthcare Freedom

Title VI expressed a general policy statement that Americans should have access to healthcare freedom and free-market choices, reinforcing the bill’s emphasis on employer and individual flexibility in health benefits.

However, none of these were enacted into law, as the original CHOICE Arrangement Act did not pass the Senate.

Is The CHOICE Arrangement Act the same as the “Choice Act”?

It’s important to note that the CHOICE Arrangement Act is often mistaken for “The Choice Act” (Veterans Access, Choice, and Accountability Act of 2014), which relates to education benefits for veterans and their families. Despite similar names, these are entirely different bills with unrelated objectives.

The CHOICE Arrangement Act was solely focused on healthcare reform, specifically, giving employers and employees more flexibility and autonomy in how health benefits are provided and received.

Why Didn’t the CHOICE Arrangement Act Pass?

Although the CHOICE Arrangement Act (H.R. 3799) passed the House of Representatives in June 2023, it never became law because it stalled in the Senate and was never brought to a vote. While the bill generated interest, especially among lawmakers looking to expand healthcare options for small businesses and promote market-driven solutions, it faced several obstacles. The Senate was preoccupied with broader legislative priorities, and healthcare proposals that challenge or shift away from traditional ACA structures often face political resistance. Additionally, with a packed legislative agenda and limited bipartisan momentum, the bill simply didn’t make it onto the Senate floor. Despite this, the core concepts behind the CHOICE Arrangement Act, such as expanding access to ICHRAs, association health plans, and simplified health reimbursement models, continued to gain traction and were later revived as part of the more comprehensive One Big Beautiful Bill in 2025.