By Mokaru Team
You've just been handed a severance agreement and told you have a few days to sign it. The number on the page feels like a formality, something to accept so you can move on and start job hunting. But that first offer is rarely the final one, and signing too quickly can cost you weeks of pay or months of health coverage you never knew you could ask for.
The stakes are real. Workers who lost a job in the United States were unemployed for an average of 24.8 weeks in September 2026, with half still looking for work after 11.5 weeks, according to the Bureau of Labor Statistics. A severance package exists to bridge exactly that gap, which is one more reason to get it right before you sign anything away.
This guide covers what severance actually is, the legal deadlines already running in the background, what you can reasonably negotiate beyond the base number, the clauses worth catching before you sign, and how to put a counteroffer in writing that an employer takes seriously.
| Do | Don't |
|---|---|
| Read the entire agreement before signing anything | Sign the same day you receive the offer |
| Put your counteroffer in writing | Negotiate only in a phone call, with nothing in writing afterward |
| Ask about health coverage, equity, and references, not just pay | Assume the first number on the page is final |
| Use the full review period you're legally given | Let a short deadline rush you into a decision |
What a severance package actually is
Severance is compensation an employer chooses to offer when your job ends, typically through a layoff, a restructuring, or a role being eliminated rather than anything you did.
There is no requirement under the Fair Labor Standards Act for an employer to provide severance pay at all, according to the US Department of Labor. Whatever is in front of you is something your employer decided to offer, not a legal minimum, which is exactly why the first number is a starting point and not a verdict.
A typical package bundles a few things together: a payout tied to your salary and tenure, a limited continuation of benefits, and sometimes extras like a pro-rated bonus, accelerated equity, or job search support. Many employers lead with a bare-minimum version covering only base pay and the legal minimum on health coverage, and leave the rest for you to ask about.
The legal clock that's already running
Before you negotiate anything, it helps to know how much time you actually have, because several deadlines are running whether or not anyone mentions them.
If you're 40 or older, the Older Workers Benefit Protection Act gives you at least 21 days to consider an individual severance agreement, or at least 45 days if you're part of a larger group layoff, according to the US Equal Employment Opportunity Commission. After you sign, you still have 7 days to revoke your decision, and neither you nor your employer can shorten that window.
If your employer is part of a larger reduction in force, the federal WARN Act requires 60 days' advance written notice for a mass layoff or plant closing at companies with 100 or more employees, where at least 50 workers at a single site are affected, according to the Department of Labor. If you didn't get that notice and should have, it's worth raising with an employment attorney before you sign anything.
Your health coverage has its own clock. You have 60 days from the day your coverage ends, or from when you receive the COBRA election notice, whichever is later, to decide whether to elect COBRA, according to the Department of Labor's Employee Benefits Security Administration.
What you can actually negotiate beyond the base number
Base pay is the part everyone focuses on, but it's rarely the only thing on the table. A few other elements are often flexible, even when they aren't included in the initial offer.
- Extra weeks of pay or a lump sum: if your offer is based on a set number of weeks per year of service, a longer tenure or a senior role is a reasonable basis to ask for more.
- Health insurance continuation: ask your employer to cover some or all of your COBRA premium for a set number of months, rather than paying the full cost yourself from day one.
- Equity vesting: if you're close to a vesting date, ask whether any unvested shares or options can be accelerated or partially vested.
- Outplacement or career coaching: if it isn't already included, ask for it directly, or ask for a cash amount instead that you can put toward your own coaching or job search.
- Reference terms: ask who is authorized to give a reference and what they'll confirm at minimum, such as your dates of employment and job title.
- Equipment access: a short extension on laptop or file access to retrieve personal documents is a low-stakes ask most companies grant.
Health insurance is worth negotiating harder than most people realize. COBRA lets you keep your exact plan, but you take on the full premium yourself, and the average annual premium for an employer health plan was $9,325 for single coverage and $26,993 for family coverage in 2025, according to KFF's Employer Health Benefits Survey. Asking your employer to cover that premium for 30 to 90 days is a common and often granted request.
Health insurance options beyond COBRA
COBRA isn't your only option, and it isn't always the cheapest one. Losing job-based coverage opens a special enrollment window for a Marketplace plan, which can be less expensive once income-based subsidies are factored in.
If your income drops significantly after a layoff, Medicaid is also worth checking. In states that expanded Medicaid, adults can qualify with income up to 138% of the federal poverty guideline, which works out to about $22,025 for a single adult in the 48 contiguous states in 2026, based on the HHS poverty guidelines. Medicaid has no fixed enrollment deadline, unlike COBRA or a Marketplace plan.
COBRA coverage itself typically runs for up to 18 months after your job ends, and the plan can charge you up to 102% of the full premium, which is the employee share plus the portion your employer used to cover, plus a small administrative fee.
Red flags to catch before you sign
Reading the full agreement closely, not just the pay number, is where most of the real risk and the real leverage both live.
A non-compete clause that blocks you from working anywhere in your industry for 12 to 24 months can quietly cut off your fastest path back to work. Ask for a narrower scope, or confirm with an employment attorney whether non-competes are even enforceable where you live, since several states don't allow them.
A one-sided non-disparagement clause stops you from speaking negatively about the company but says nothing about what the company can say about you. Ask for mutual language that protects both sides equally.
Vague release language, phrases like a release of "any and all claims", can waive more than you realize, including claims you don't yet know you have. If the wording is unclear, ask for specifics or have it reviewed before you sign.
Silence on references is its own red flag. If the agreement doesn't say who will respond to reference checks or what they'll confirm, ask for that in writing rather than finding out the hard way during your next job search.
Pressure to sign the same day benefits your employer, not you. Taking the time you're legally entitled to, or simply asking for a reasonable extension, rarely damages the relationship and often reveals whether there was room to negotiate in the first place.
How to write your counteroffer
A good counteroffer follows a simple sequence, and sticking to it keeps the conversation professional on both sides.
- Read the full agreement once before reacting to any single number.
- List the specific items you want changed, not a general sense that the offer is too low.
- Send one written message, usually an email, that is short, specific, and tied to your tenure or situation rather than a grievance.
- Keep the tone collaborative. Thank them for the offer, note you're reviewing it carefully, and list your requests clearly.
- Get the final version in writing. A verbal agreement made during a call isn't enforceable until it's in the signed document.
If you were let go for cause rather than laid off, negotiating is harder but not impossible, especially if the reason given is vague or disputable. A short consultation with an employment attorney can help you assess whether you have leverage before deciding how hard to push.
Keep your job search moving while you negotiate
Negotiating severance can take days or sometimes weeks, and there's no reason to wait until it's resolved to start moving. Updating your resume now, while the specifics of your role are still fresh, puts you ahead once the agreement is settled. Our guide to the first 30 days after a layoff covers what to prioritize once the severance conversation wraps up.
A simple tracker for the roles you're watching also pays off here. It keeps your options visible without committing you to anything while negotiations are still open.
If negotiating pay feels unfamiliar, the same preparation that works for a job offer works here too: know your numbers, write them down, and ask for what you want in one clear sentence rather than hinting at it.
Frequently Asked Questions
A severance offer is the opening move in a conversation, not the final word. Knowing the review windows you're entitled to, what's actually negotiable beyond the base number, and the clauses worth pushing back on turns a few stressful days into a plan you can act on with confidence.
Take the time you're given, put your requests in writing, and remember that the number on the first page is rarely the number on the last one.
Mokaru Team
Mokaru Editorial Team
The team building Mokaru writes practical guides to resume writing, job applications, and using our job-search tools. Articles are drafted with the help of AI tools and edited by the team before publishing.
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