Hello TurboTaxBillMc ,
Thank you very much for your time to answer our question. Appreciated.
Actually, this HDHP was opened 6 years back. Initially, myself, wife and kids were on the HSA plan. Then got my full time employment and myself, kids were joined the employers health plan. Due to the employers restriction, my wife was unable to join my employers plan so she stayed with the HSA. As of 2016, she was not on the last month rule. She was enrolled in the HSA from year 2012.
I am not sure why do we need to pay the penalty.
