What Happens to Billing and Reimbursements When an Employee Is Terminated?

For agents: Here’s what happens on StretchDollar when a client deactivates/terminates an employee in the Company Portal.

Billing (PEPM / admin fee)

Terminated/deactivated employees are removed from the billable enrolled-employee count used for PEPM-style administration fees. The employer should not keep paying an ongoing admin fee for someone who is no longer active/enrolled.

Auto-Reimbursement

Approved/pending Auto-Reimbursement configurations for that employee are typically canceled as part of deactivation. Recurring monthly AR will not keep running.

Grace period for one-time reimbursements

Deactivated employees generally enter an about 30-day grace period. During grace, they may still submit one-time reimbursements (subject to eligibility/documentation and Admin approval). After grace ends, portal access becomes much more limited (documents-focused), and reimbursement features stop.

Employee outreach

During deactivation, the Admin is prompted for a personal email when needed so StretchDollar can contact the employee about next steps for their individual coverage (keep/cancel/shop Marketplace options). Their individual policy remains between them and the carrier — StretchDollar does not cancel carrier coverage. For COBRA questions about the ICHRA itself, see Can COBRA apply to Employee ICHRA benefits?

If a reimbursement is mid-flight

Timing matters (Pending vs already Processed; inside vs outside grace). Don’t guess — escalate to support@stretchdollar.com with employer, employee, and reimbursement date if money is stranded mid-transfer or a client disputes a final payment.