"I will still enter the amount listed on my W2, even though it would be the overfunded amount"
Yes.
"that is how they would know I removed the excess? "
Yes.
"And the 0.08 would be reported next year just on the 1099-SA form?"
No, the 1099-SA should have the excess in box 1 and the earnings in box 2. But because the distribution code will be '2', the amount in box 1 will be ignored and only the box 2 amount will be added to your Other Income next year.
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