clevey, what you propose would eliminate the excess. To do so you would need to file 2018 Form 8889 for each of you with the changes along with Form 1040-X where you can provide explanation of the change and show that nothing else changes on your 2018 tax return. If your wife is under age 65, this seems to be the only reasonable alternative since making a regular taxable distribution of the remaining balance to eliminate the excess would result in a 20% early-distribution penalty on the amount distributed.
If you wife is over age 65 at which age the 20% early-distribution penalty no longer applies, withdrawing the balance of the account remainder of the account and having the remainder of the excess remain on the books forever would not necessarily be a bad way to handle it. You could then make a personal, deductible contribution to your own HSA by July 15, offsetting the income resulting from the taxable distribution from your wife's HSA to bring you up to the maximum permissible contribution for 2019. Still, if you have sufficient qualified medical expenses within the near future to which to apply the balance of your wife's HSA, that might make more sense and just leave a larger excess on the books forever.
