In your original question you said "he called the old HSA provider to double-check what amount they'll be reporting as gross distribution and they said it will be the amount before the closing fee."
But in your last post you said "we won't know what the old HSA provider will declare on the 1099-SA as distribution until next year."
If the HSA provider told your husband that they will report the gross distribution, without subtracting the fee, why do you say that you don't know what they will report?
Your husband can use his HSA to pay medical expenses for himself, his spouse (you), and his dependents. So yes, he can apply the $25 to your medical expense if that's the way he wants to handle it.
