If you are using this distribution to cut off the carryover of excess contributions, you must take a distribution of the entire excess amount and pay tax on it and the 20% penalty. If you try to say that you use some of it for medical expenses, then the carryover will not be cut off.
However, since you still have an HSA (I don't now how much cash is in it), you can still take distributions to pay for qualified medical expenses tax-free, even after you no longer have HDHP coverage. You just can't do it to cut off the carryover of excess contributions.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
