Unvested equity is typically forfeited on termination, and vested stock options commonly carry a post-termination exercise window of about 90 days after which they expire. Health coverage generally ends at the end of the month, with continuation available under COBRA at employers with 20 or more employees for up to 18 months — at the full premium plus an administrative charge, which is far more than you were paying.
The deadline that cannot be recovered
If you hold vested stock options, you typically have around 90 days after termination to exercise them. Miss it and they are gone — not reduced, not deferred, gone, however long you worked for them and however much they are worth.
Everything else in a layoff can be revisited, appealed, negotiated or fixed later. This one cannot. Diarize the date in the first week, before anything else on the list.
What exercising actually requires
Money, usually. The strike price on each share, plus a tax bill that can arrive in the same year even if you cannot sell anything — which is the trap that catches people at private companies where there is no market for the shares.
So the decision is not simply whether the options are valuable. It is whether you can fund the exercise and the tax while unemployed. That is a genuinely difficult call and it is worth taking advice on it rather than deciding under time pressure.
Vesting stops on your last day
Anything unvested is normally forfeited. If a significant tranche vests weeks after your separation date, moving that date is one of the highest-value things you can ask for in a severance conversation, and it sometimes costs the employer very little.
Some agreements provide acceleration on a layoff. Most do not, but the plan documents are worth reading rather than assuming, because the terms vary considerably between employers.
Health coverage: what COBRA is and is not
Employers with 20 or more employees must offer continuation of your existing plan, generally for up to 18 months. Same coverage, same doctors, same deductible progress.
What changes is the price. You pay the full premium — your share and the employer’s, plus an administrative charge — which is frequently three or four times what was coming out of your paycheck, and it is the number that shocks people most.
Why the marketplace usually beats it
Losing job-based coverage triggers a special enrollment period, and marketplace plans are subsidized based on your current income — which, if you are unemployed, is low.
Compare both before electing COBRA. The exceptions where COBRA wins: mid-treatment where changing plan disrupts care, a deductible you have largely met, or a specialist not covered elsewhere. Otherwise the subsidized plan is usually far cheaper for equivalent coverage.
Note the timing trap: electing COBRA can complicate marketplace enrollment later, and the special enrollment window is limited. Decide early rather than defaulting into COBRA because the paperwork arrived first.
Retirement money is yours, with conditions
Your own contributions are always yours. Employer contributions vest on a schedule — under federal rules for defined contribution plans, no slower than three-year cliff or six-year graded.
You can generally leave the balance where it is, roll it to an IRA or a new employer’s plan, or cash out. Cashing out triggers tax and usually a penalty, and it is the most expensive of the three by a wide margin at exactly the moment the money looks most useful.
The rest of the list
Accrued unused vacation, which several states require to be paid out. Any bonus already earned but unpaid, which is frequently omitted from a first draft and frequently added on request. Flexible spending account balances, which usually have a short deadline. And life or disability cover, which sometimes converts to an individual policy if you act quickly.
None of these are large individually. Together they routinely add up to more than the extra week of severance people spend their energy negotiating.
The first-week checklist
Download your pay records, benefits statements and equity documents before access is cut. Diarize the option exercise deadline. Compare COBRA against a marketplace plan. File for unemployment immediately rather than waiting for severance to run out.
This is general information rather than tax or legal advice, and equity decisions in particular turn on your specific plan documents and tax position.
Common questions
What happens to my unvested equity?
It is usually forfeited on termination, unless the plan or your agreement provides for acceleration in a layoff.
How long do I have to exercise vested options?
Commonly about 90 days after termination unless the plan says otherwise. Missing it forfeits them entirely.
When does my health coverage end?
Usually the last day of the month. COBRA can continue it up to 18 months at employers with 20 or more staff, at full premium plus an admin charge.
Is COBRA the best option?
Not always. Losing coverage opens a marketplace special enrollment period, and a subsidized plan is often cheaper.
What about my retirement account?
Your own contributions are always yours; unvested employer contributions are generally forfeited. Cashing out is the costliest choice.
How long do I have to exercise stock options?
Typically about 90 days after termination. Miss it and vested options are gone — it is the one deadline in a layoff that cannot be recovered.
Is COBRA worth taking?
Sometimes. You keep the same plan but pay the full premium plus admin, often three or four times your old contribution. A subsidized marketplace plan is usually cheaper.
What happens to my retirement money?
Your contributions are always yours; employer contributions vest on a schedule, no slower than 3-year cliff or 6-year graded. Cashing out is the most expensive option.