@RJG0307
If you made HSA contributions during 2021 but you are not eligible, because you have other health coverage that disqualifies you, Those are considered “excess contributions.” If you leave the excess contributions in the account, you will not be allowed a tax deduction and you will pay a 6% penalty. You need to contact the HSA bank and request a return of excess contributions. This is not a normal distribution, and probably requires you to file a separate form with the bank.
You can continue to spend money in an HSA for medical expenses for yourself, your spouse, and your dependents, no matter what kind of insurance coverage you have. But you can’t make new contributions when you are disqualified.
