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Suze Orman has a warning for anyone about to click through open enrollment without reading the fine print.
“Employers expect the cost of providing health benefits to rise an average of 8.2% in 2027,” she wrote in an Oct. 1 blog post. Of all the benefits you’ll review this fall, she added, “health insurance is the one I really insist you review.” (1)
She notes that among workers with a general deductible, the average deductible for single coverage hit $1,886 in 2025, up 17% in five years, and averaged more than $2,600 at smaller employers. (1)
I’ve been a CPA since 1981, and Suze is right. Her advice is aimed at workers in general. But nearly 1 in 5 Americans 65 and older are still in the labor force, according to the Bureau of Labor Statistics (2), and for them, open enrollment comes with a trap she didn’t mention.
If you’re 65 or older and still contribute to a health savings account, signing up for Medicare or Social Security at the wrong time can turn your HSA contributions into “excess” contributions in the eyes of the IRS. (3) That can mean a 6% penalty every year until you fix it. (4)
Here are six moves to make before your enrollment deadline.
1. Do what Suze says: check three numbers
Suze tells readers to look at the premium, the deductible and the maximum out-of-pocket. She says the typical out-of-pocket max runs around $3,000, and can top $5,000 at small businesses. (1)
“Don’t guess. And don’t just shrug that there’s nothing you can do,” she writes. (1) I couldn’t agree more. The cheapest premium can be the most expensive plan if you actually get sick.
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2. Fill your HSA while you’re still allowed to
Suze suggests considering a health savings account if you’re eligible. (1) I’d go further: If you’re on a high-deductible plan, an HSA is the best tax deal in the code.
Contributions cut your taxable income, the money grows tax-free, and withdrawals for qualified medical bills are tax-free, too. (3) For 2026, the limits are $4,400 for self-only coverage and $8,750 for family coverage, plus $1,000 more once you’re 55. (5) In 2027, they rise to $4,500 and $9,000. (5)
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3. The 65 trap: Medicare can reach back six months
Here’s the part that catches people. “Beginning with the first month you are enrolled in Medicare, your (HSA) contribution limit is zero,” the IRS says. (3)
And Medicare can be retroactive. If you sign up for Medicare after 65, Part A coverage generally reaches back up to six months, though never before the month you turned 65. (4) Any HSA contributions made during that retroactive period count as excess, the IRS says. (3)
Worse, if you’re 65 or older, applying for Social Security automatically enrolls you in Part A. (4) So a worker who claims Social Security at 67 while still contributing to an HSA can blow the rule without realizing it.
The fix: Stop HSA contributions, including your employer’s, six months before you apply for Medicare or Social Security. Excess contributions left in the account face a 6% excise tax for every year they stay there. (4)
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4. Know who pays first: your employer or Medicare
Working past 65 doesn’t automatically mean you can skip Medicare. It depends on the size of your employer.
If your employer has 20 or more employees, its group plan pays first and Medicare pays second. If it has fewer than 20, “Medicare pays first,” according to Medicare. (6)
That matters. At a small company, skipping Part B can leave you with big holes. The plan that pays second “only pays if there are costs the primary insurance didn’t cover,” Medicare says. (6) Ask your benefits office in writing which applies to you.
5. Don’t trip the Part B penalty
If you delay Part B without qualifying coverage, “you’ll pay an extra 10% for each year you could have signed up,” Medicare says, and that penalty generally lasts as long as you have Part B. (7)
Coverage from a current job usually protects you. COBRA or retiree coverage doesn’t: Medicare lists “Your COBRA coverage or retiree coverage ends” among situations that don’t qualify for a special enrollment period. (8)
When you stop working or lose job-based coverage, you get an 8-month window to sign up, so mark that deadline the same week. (8)
6. Your HSA still works after you stop contributing
Here’s the good news. Once you’re on Medicare, you can’t add money to your HSA, but you can still spend what’s there tax-free on qualified medical costs.
After 65, the IRS lets you use HSA money for Medicare premiums and other health coverage, though not for a Medigap policy. (3) That makes a fat HSA one of the best ways to pay health costs in retirement.
And Medicare’s own open enrollment runs Oct. 15 to Dec. 7, so once you’re on it, you’ll get a fresh chance to shop every fall. (9)
The bottom line
Suze’s advice is sound: Don’t sleepwalk through open enrollment. Health insurance is likely the biggest benefit you’ll choose this year, and the cost is going up again.
But if you’re 65 or close to it and still working, the bigger risk isn’t the premium. It’s the timing. Medicare, Social Security and your HSA all have to line up, and one wrong date can cost you penalties for years.
Get the dates on paper before you sign anything.
In health insurance, the cheapest mistake is the one you catch before December.
Sources: 1. Suze Orman; 2. Bureau of Labor Statistics; 3. IRS; 4. SHRM; 5. Fidelity Investments; 6. Medicare.gov; 7. Medicare.gov; 8. Medicare.gov; 9. Medicare Rights Center
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