If you happen to be heading into renewal season amidst high increases, you have most likely heard a variation of this question: is ICHRA/CHOICE a primary strategy for us or just an option of last resort?
To settle it, we sat down with Lisa Collins, a longtime benefits advisor who has spent years assisting brokers and employers with how CHOICE Arrangements (formerly ICHRA) fits for them. In this blog, we will uncover what she had to say about the myths and misconceptions surrounding CHOICE, along with the conversations she believes all brokers should be having right now.
Meet Lisa Collins
Lisa Collins is the Principal Advisor at ChoicePlus Benefits Advisors and co-founder of WCK Health Group, a specialty consulting firm. She brings over 30 years of experience in employee benefits, with a background that includes national carrier account management, compliance-focused benefits services, and work within brokerages. She has been introducing CHOICE through broker channels since 2020. Currently, she advises brokers and employers on plan design, contribution models, and implementation. She holds Certified Flexible Compensation and Advanced Chartered Benefit Consultant designations.
Myths she is tired of debunking.
Lisa had two myths in mind. First, she frequently hears that CHOICE only works for small groups, but the data already says the opposite. HRA Council’s latest report has shown that the large employer segment (over 1,000 employees) has the highest CHOICE growth rate of any segment.
Lisa also described how some still view CHOICE as a last-resort solution.
“When the group plan is failing, it’s ‘Ugh, I guess we have to go to CHOICE.’ Like there’s no other option. In my mind, CHOICE should be a very deliberate benefit strategy when it’s the right fit.”
The lack of conviction can have a real impact. If employers don’t consider CHOICE until after renewal rates land, often in October or November, they have limited time to create a working plan, communicate it thoroughly, and roll it out. When this happens, the end result is a rushed transition and not an accurate reflection of how beneficial CHOICE can be.
But what is really behind the hesitation from employers? Typically, it is change management. HR teams are very conscious about how new models will be received and also worry about losing control over benefit budgets. CFOs are often an easier conversation. They’re focused on the costs and budget, and as Lisa phrases it, “the numbers are the numbers.”
Fortunately, employees adapt much better than expected. Lisa points to how research shows that employees prefer CHOICE over a group plan with a large rate increase.
Indications of a strong CHOICE fit.
Lisa shared a few signals she hears from employers that tell her CHOICE could be the right fit:
- A workforce spanning multiple states. Group plans can struggle to offer plan parity across different states, or even regions within a state.
- Low group plan participation. When employee costs are high, it can make carrier participation requirements difficult to meet. CHOICE takes that off the table.
- Accelerated company growth. Lisa believes this is not discussed often enough. “When you’re moving from small group into large group because of growth—you’re no longer under 50, or in some markets under 100— it puts you in a completely different underwriting model.” CHOICE allows for rapidly growing companies to stay flexible.
- A need for cost control. Premium savings and cost control are not the same. With CHOICE, employers set a fixed allowance for each employee, so the budget remains predictable instead of succumbing to rising rates each renewal season. “Cost control is a budget mechanism. Premium savings is just that.
The most rewarding part of her job.
“It is so satisfying when a broker who has been against CHOICE sees the light, or sees a use case where CHOICE really fits.”
Lisa has spoken with many brokers who say they would never sell CHOICE. Seeing them convert from a CHOICE skeptic to advocate makes it worthwhile. She aims to make CHOICE a standard part of every renewal conversation, directly alongside self-funded, level-funded, and fully insured options.
The truth about PPO plans.
This was an easy question for Lisa. In her opinion, a PPO doesn’t automatically mean the best plan.
“In the individual market, if people see there are no PPO plans, they immediately assume the plans are bad. But CHOICE is a local plan selection.”
To cover everyone in a distributed workforce group plan, a broad PPO network may be needed. With CHOICE, employees have the ability to select a plan in their local market, based on whether their own providers are in network. This is important because there is no reason to pay extra for a network they’ll never use.
Individual carriers have introduced PPO plans in response to perceived demand. Yet ironically, enrollment in these plans has been low. Most people don’t choose plans based on plan type, but instead based on their providers, budgets, and needs. While there are some exceptions, like snowbirds or employees who live in one state but commute to work in another, for most people, the “PPO is best” belief is the ultimate myth. Even Lisa struggled with that for some time. “When I was first given a CHOICE plan, here I was selling it, and there was no PPO, and I was like, ‘Ugh.’ I had to get over that mindset we’ve all been taught.”
Every employer should be asking this question.
“When do we rip the Band-Aid off?”
Lisa witnesses a recurring pattern year after year. An employer will inquire about a CHOICE proposal, but hold off when it comes to renewal time. This repeats the following year, and the one after, and the one after that. In the meantime, the group plan price continues to increase, pushing the limits on what businesses can afford for their employee benefits.
“Say, ‘Our group plan is no longer working. What’s the alternative here?’ It may not be CHOICE, but what’s the alternative?”
Here's the good news: we’re seeing more employers bring up CHOICE with their brokers on their own. That mental adjustment often takes time, spanning more than one renewal cycle, but with CHOICE now being established for a few years, Lisa is hopeful this season will continue to build on the previous momentum.
Why this all matters for renewal season.
What CHOICE does best is offer financial flexibility, but that calls for a level of responsibility from all parties involved in the process. For employers, the ones who see the most success explore it early, ask the right questions to their brokers, and treat it as an intentional strategy rather than a backup plan. Does that mean that CHOICE ends up being the answer every time? No. However, every employer deserves to see their full range of options before deciding what to move forward with.
Are you curious if CHOICE is the right fit for your organization or clients? Book a demo to see how Zorro eases the transition for employers, brokers, and employees alike.