For the first 10 months of the year, my HSA was with HSAbank. As of 11/1/2016, my company went with a different provider, so I did a cash-out, and bulk transfer of my HSAbank assets to the new provider. Now that everything has settled, and is invested in VTSAX and other Vanguard funds (yea!) the new provider shows my contributions this year as $189 - ignoring the previous 10 months of contributions to the other HSA provider.
In essence, the new HSA provider is allowing me to contribute the FULL ANNUAL AMOUNT for 2016 into the NEW HSA account.
I've looked into the effects of this situation, and on IRS form 5329 (Part VI - lines 34-41) there is an out for this situation: pay 6% tax on the excess contribution to the HSA. Last year I had an excess contribution to my Roth IRA that was similarly taxed at 6%, so I'm familiar with that.
The issue is: it seems to be worthwhile to me to contribute as much to my new HSA account as I can up to the amount of the total HSA balance on Dec. 31, 2015. I will have to pay 6% tax on that amount, but that's far less than my standard 25% tax rate.
Assume: Balance in Dec 2015 was $9,000. I contributed ~$3,000 into the OLD HSA account for 2016. In the new account I contribute the full $6,500 for the year - leaving me with ~$3,000 excess contributions for 2016. That amount is taxed at 6% or $180. If taxed as regular income, that amount would be taxed at 25% or $750.
It appears that I'm better off contributing as much as I can toward the HSA to the amount they'll let me, and pay the 6% 'oops' tax.
Am I missing something here?