"I discussed this with my employer, and they called the HSA company who made an adjustment distribution this month (March) of $800.00 giving the money back to my employer. "
The employer is allowed to remove the money from your HSA if they should have known that you were not eligible when they made the contribution. It sounds like they did that.
Now, your employer should give you a corrected W-2, removing the code W in box 12 on your W-2.
Once you have that, TurboTax will have no reason to ask you any questions about an HSA that you did not have in 2020.
Now the question is whether or not the HSA custodian will suppress the 1099-SA reporting a distribution to you that you did not receive (your employer got it).
If they won't suppress the 1099-SA, ask them to issue a corrected 1099-SA showing that there was no distribution. This will cause a little problem for you because you can't enter a 1099-SA with no distribution into TurboTax (such a 1099-SA doesn't make sense). At that point, just don't enter the first 1099-SA.
Then make very sure you write this episode up and save it in your tax file at home. Your employer made a mistaken distribution, it was returned to your employer, but the 1099-SA was sent to you anyway. As a workaround, you did not enter a 1099-SA that didn't make sense for your return. You could not withdraw the excess contribution because it was no longer in the HSA to withdraw - your employer has the money.
See what your employer and the HSA custodian will do for you - it was your employer's mistake after all.
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