Medicare enrollment starting January 1, 2016 makes you ineligible for all 2016 HSA contributions.
If any of those contributions were made pretax (through employer), they will become taxable as ordinary income. Any contributions that were made after tax will not be deductible on your tax return. To avoid a 6% penalty on the $6,699, you must request, from your HSA bank, an excess contribution withdrawal of the $6,699. If there is less than that amount available in your account, you should withdraw the complete balance.
