Can I keep reimbursing an employee after they leave (severance)?

We don't recommend offering an ICHRA to your employee after they leave your company. The employee can transfer to a subsidized health insurance policy.

However, when an employee leaves, you need to decide and to take action on when their ICHRA benefit ends.

It depends on when you remove them from your Employees tab in the application on their last day, or later if their severance package includes more StretchDollar reimbursements.

Here's how to set that up and make sure they get every reimbursement they're owed. You are responsible for timely removal of your employee from the StretchDollar platform.

It's your decision when the benefit ends

As the business owner, you choose the date you stop offering the benefit to a departing employee. Whatever date you choose, use it as the Deactivation Date when you deactivate them. Until that date, the employee stays active and keeps receiving reimbursements.

• Ending the benefit on their last day: use their last day as the Deactivation Date.
• Continuing it as part of severance: use the last day of the severance period as the Deactivation Date. You can set it up now. The employee shows as Scheduled to deactivate until then, and you can choose Cancel deactivation if plans change.

Once the Deactivation Date has passed, only our support team can reactivate someone. If you've already deactivated an employee and now want to continue their benefit, email support@stretchdollar.com as soon as possible.

Cancel their Auto-Reimbursement ahead of time

Auto-Reimbursements are sent on the 25th for the following month. If the benefit should end before then, cancel the employee's Auto-Reimbursement before the 25th, so next month's payment doesn't go out:

• In the Employer Portal, go to Auto Reimbursements.
• Find the employee's approved Auto-Reimbursement and click Cancel, then confirm.

Deactivating an employee also stops their Auto-Reimbursements, but a payment that already went out on the 25th can't be reversed. Example: if an employee's benefit ends on October 31, cancel their Auto-Reimbursement before October 25, or a November payment is sent.

Catching up on missing reimbursements

If the employee paid premiums for months they weren't reimbursed, for example a month before their Auto-Reimbursement started, they can submit a one-time reimbursement for each of those months.

• Best: ask them to submit any missing one-time reimbursements before their Deactivation Date, and approve them before that date. See How do I approve or reject a one-time reimbursement claim?
• After deactivation: the employee has 30 days to submit one-time reimbursements for months they were covered.
• Already have a request sitting in Pending? Approve it before the Deactivation Date. See What happens to a pending reimbursement when an employee is terminated?

Best practices for terminating an employee

For the full steps, including the deactivation form, personal email and what we send the employee about their health plan, see How to terminate an employee. Paying a partial last month instead? See Can Employers Prorate an Employee's Reimbursement After Termination?