How it works

From census to CHOICE Arrangement proposal

Five steps, one consistent method, and a proposal you can put in front of an employer.

  1. Upload the employee census

    Start with the spreadsheet the employer gives you. For each employee you'll need age (or date of birth), home ZIP code, coverage tier, wage information, and employee class. Names and Social Security numbers aren't needed.

    The census is checked before anything is calculated: missing ages, unknown ZIP codes, and ZIP codes that cross county lines are flagged so you can fix them first.

  2. Match each employee to plans and premiums

    Each employee's home county places them in a marketplace rating area. Using CMS Marketplace public use files for that plan year, the tool finds the plans available there and identifies the lowest-cost silver plan, priced for the employee's age. (Coverage currently covers HealthCare.gov states.)

  3. Run the affordability test

    Choose the safe harbor the employer will rely on (rate of pay, Form W-2, or federal poverty line) and whether to use the location safe harbor. The tool tests each employee against the IRS affordability percentage for the plan year and shows who passes and by how much.

  4. Set allowances and compare cost

    For each employee class, the tool recommends the minimum monthly allowance that keeps the offer affordable. Adjust it if the employer wants to be more generous, then compare total employer cost with their current group plan.

  5. Deliver a branded proposal

    Generate a proposal with your agency's logo, colors, and contact details as a PDF, an editable PowerPoint file, or a shareable link. The assumptions and data sources are listed in the proposal.

Plain English

The CHOICE Arrangement (ICHRA) affordability test

A CHOICE Arrangement (the new name for an ICHRA) is affordable for an employee when the amount the employee would still pay for the cheapest silver plan, after the employer's allowance, is no more than a set percentage of their household income.

Lowest-cost silver plan premiumself-only, for the employee's age and location
Monthly allowanceself-only amount
Affordability % × monthly income9.96% (2026) or 10.22% (2027)

Safe harbors

Employers don't know their employees' household income, so IRS safe harbors let them use something they do know:

  • Rate of pay: for hourly employees, 130 hours × the hourly rate; for salaried employees, monthly salary.
  • Form W-2: the employee's Box 1 wages for the year from the employer.
  • Federal poverty line: the federal poverty guideline for a single person, which works regardless of wages.
  • Location safe harbor (ICHRA): the employer may use the lowest-cost silver plan where the employee works instead of where they live.

A worked example

Hypothetical numbers for illustration only.

Employee
Hourly, $20.00 per hour
Rate of pay income
130 hours × $20.00 = $2,600.00 per month
2026 affordability limit
9.96% × $2,600.00 = $258.96 per month
Lowest-cost silver premium
$520.00 per month (self-only, hypothetical)
Minimum affordable allowance
$520.00 − $258.96 = $261.04 per month

Repeat that for every employee. If everyone in a class gets the same allowance, the highest requirement in the class is the minimum allowance that keeps the whole class affordable. That's the calculation Choice Arrangement Deck automates.

Why it matters

An applicable large employer (generally 50 or more full-time employees, including full-time equivalents) may owe an employer mandate penalty if a full-time employee receives a premium tax credit because the offer wasn't affordable. For employers of any size, affordability also determines whether employees can turn down the arrangement and claim a premium tax credit instead.

This is a simplified summary, not tax or legal advice. Employers should confirm their approach with their own tax and legal advisors.

Where the numbers come from

Affordability and premium figures are built from public government data that anyone can check.

  • Plans & premiums: CMS Exchange Public Use Files (Plan Attributes, Rate, and Service Area files) for HealthCare.gov states.
  • Rating areas: CMS state geographic rating area definitions.
  • ZIP codes & counties: HUD USPS ZIP crosswalk and U.S. Census Bureau geographic files.
  • Affordability rules: IRS guidance (9.96% for 2026, 10.22% for 2027) and HHS federal poverty guidelines.

Refreshed each plan year when CMS publishes updates. Figures are estimates from public data, not tax or legal advice.

See all data sources

Let the tool do the math

Request early access and run your next prospect's census through it.

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