Being covered by Medi-Cal (Medicaid) the entire year makes you ineligible to contribute to an HSA for 2021. You should contact the HSA custodian and obtain an explicit return of the excess contributions made for 2021 (not a regular distribution). If your are still covered by Medi-Cal and you've also made HSA contributions for 2022, you'll need to have those returned too. Failing to do so will expose you to recurring 6% penalties each year that the excess remains in the HSA. Taking a regular taxable distribution in future years to correct the excess can expose you to a 20% early-distribution penalty that you would not have had had you corrected the excess by a return of excess contribution.
