The screen in the California return that displays Income Exempted by U.S. Treaties and Health Savings Account Contributions is there specifically to allow you to make any needed changes to your California income for items that are treated differently in California than they are on the Federal return.
Click the Learn More links next to each item, then click the Edit box next to each item and answer the questions. It appears that TurboTax found something on your W-2 or in your answers in the Federal W-2 interview that could have indicated that "income subject to treaties" could be an issue that should be addressed.
California law has no provisions comparable to the federal HSA provisions. As a result, a taxpayer must reverse the federal treatment of deductions, interest, and contributions related to their HSA on their California income tax return. See this Franchise Tax Board document for more information. Several bills have been introduced in the state legislature in an attempt to change the law.
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