If you had your HDHP
for all of 2016, then the last month rule will not apply to you. You would answer no.
The question is referring to the 2015 tax year. If you contributed in
2015 under last month rule, then you would have to maintain HDHP coverage for
all of 2016 to not incur a penalty.
'The Last Month Rule
states that if you are covered by an HSA eligible health plan on the first day
of the last month of a given year, you are considered an eligible individual
for the entire year. This gives you the option to contribute the entire year’s
contribution limit to your HSA, which is more than you would be allowed
otherwise (pro rata by month). You are allowed the deduction if you remain
an eligible individual (covered by HDHP) for the next 12 months.'
See below link.
http://www.hsaedge.com/2014/03/25/hsa-last-month-rule-and-testing-period-explained/
https://www.irs.gov/pub/irs-pdf/p969.pdf
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"