If you paid for the health insurance with after-tax money (and did not claim a deduction for the health insurance premiums), this money would probably just be considered to be a nontaxable return of premium. However, if the health insurance was paid for with before-tax money or you claimed a deduction for this amount, I think it would be taxable income. Getting money back that you never paid tax on and then claiming a deduction for putting this money into an HSA would be double dipping.
