Small businesses in the United States are showing signs of resilience in 2026, but the cost and structure of employee health coverage remain a significant policy challenge. A recent survey by the Small Business & Entrepreneurship Council found that 81% of small-business employers were meeting their financial goals for the year, while 88% described their businesses as either stable or growing.
The findings were highlighted by SBE Council president and chief executive Karen Kerrigan during an interview with the Broadcast Retirement Network. Kerrigan also promoted CHOICE Arrangements, formerly known as individual coverage health reimbursement arrangements, or ICHRAs, as one possible way for smaller employers to offer health benefits without taking on the same level of cost and administrative responsibility associated with traditional arrangements.
A different approach to employer health benefits
Under the model described by Kerrigan, employers contribute towards health coverage while giving workers greater discretion over the plan that suits their circumstances. Employees can use that support to select cover for themselves or their families, rather than being limited to a single option selected by the employer.
The arrangement is intended to address two competing pressures. Employers want to attract and retain staff, but smaller companies often have less purchasing power and fewer administrative resources than large corporations. Workers, meanwhile, may have different medical needs, household structures and preferences. A contribution-based system can therefore shift some decision-making from the business to the individual employee.
| Indicator | Reported figure |
|---|---|
| Employers meeting 2026 financial goals | 81% |
| Businesses stable or growing | 88% |
| Employers offering CHOICE Arrangements | 20,000 |
| New adopters that previously offered no cover | 70% |
Adoption points to an unmet need
About 20,000 employers now offer these arrangements, according to the information presented by the council. Of those adopting the model, 70% previously provided no health coverage. That figure is important because it suggests the arrangements may be reaching businesses that had not been able to offer a benefit at all, rather than simply replacing one established type of cover with another.
For employees, the practical benefit is the possibility of choosing a plan that reflects their own needs. For employers, the attraction is greater control over the amount allocated to benefits. The model does not remove the underlying challenge of affordability, but it is presented as a way to make the employer’s financial commitment more predictable while widening access to cover.
Policy certainty remains central
Kerrigan said further policy changes would be needed to expand access, improve certainty and make coverage more affordable. That emphasis reflects a broader concern for smaller businesses: a benefit model can only gain traction if employers understand the rules, workers can use it effectively and companies have confidence that the framework will remain workable.
- Employers: CHOICE Arrangements may provide more control over benefit spending and reduce the need to manage one standard plan.
- Employees: Workers may gain a wider choice of health cover for themselves and their families.
- Policymakers: The model’s expansion depends on rules that offer affordability, clarity and stability.
The survey results also place the debate in a more nuanced economic context. Small businesses are not being portrayed as uniformly distressed: most respondents reported stability or growth, and a substantial majority said they were meeting their financial objectives. Yet financial health does not eliminate pressure over employment costs. For businesses that have previously offered no cover, the reported adoption figures indicate that flexibility may be a decisive factor in whether health benefits become possible.
CHOICE Arrangements are therefore emerging as part of the US small-business policy discussion rather than as a universal solution. Their progress will depend on whether employers find the costs manageable, whether employees value the additional choice and whether future reforms provide the certainty that advocates say is needed. For now, the available figures show both a relatively positive picture of small-business performance and a continuing search for more workable ways to provide employee benefits.
