Deductions & credits

Your HSA custodian cannot convert a health savings account into a traditional savings account. This is not a thing. So long as the account has funds in it, a yearly tax form will generate showing the value, plus any contributions made for the corresponding tax year of the form. 
The fix depends on whether it is corrected within the deadline of the tax year the contribution was made, or if that time has passed. 

Within deadline: If your employer sponsors the account and contributes pre-tax out of payroll, hit them up first. Your custodian can provide them a form to return the funds back to payroll to be taxed.  Most employers will not bother with the hassle, but I see many do it each year and the worst thing that can happen is being told no. If they are not willing to do this, you will need to do a Return of Excess Contribution form. 

Outside of deadline:  Anything outside of the deadline for the corresponding tax year will have to be corrected by a Mistaken Contribution form. If there are more than one tax year involved, I suggest doing a separate form for each tax year, even if the custodian’s form allows for more than one tax year on the same form. I won’t deep dive into why the extra hassle is worth it, but I’ll sum it up by saying it involves a higher potential for human error that can take things from level nuisance to outright maddening. 

 How corrections are reported: This ultimately depends on the method of correction. 
Employer: If corrected within deadline and before original Form W2’s are sent, no reporting necessary. They will simply put the correct info on your Form W2. (Most unlikely scenario, unfortunately.) If corrected within deadline, but after original W2’s have been sent, they will need to do a corrected Form W2, in addition to the correction with the custodian.

Return of Excess Contribution Form: This will generate two Form 5498’s, the original and the corrected. 
Mistaken Contribution Form: This  will generate a corrected form for each tax year applicable.

Callouts: 

• Corrected Form 5498 will look almost exactly like the original. Look closely for the checked “Corrected” box. 
• Adjust your expectations, this is a hassle no matter how you go about it.
• Expect the possibility of having to do the same form twice. (Depending on the form.) Round 1 informs the amount and the tax year to the custodian. Round 2 includes any applicable interest that cannot be calculated without the information from round 1, resulting in a slightly different (but correct and official) dollar amount. Since your John Hancock is required to both inform the custodian, and for your custodian to make it official, just go in with the expectation that you might be told to repeat the same form with the new dollar amount from calculated interest.
• If you spent the funds that should have never been contributed in the first place, pull up your drawers and take a deep breath—you just leveled up to more forms, time, hassle, and parting with money for some time. You will need to do a Mistaken Distribution form and repay your HSA before the correction process  can even begin. There is no way around it.
•  Lastly, it’s important to know that HSA’s are owned by you and regulated by the government. Your employer, broker, or even your HSA custodian hold no legal responsibility for any consequences resulting from money moving in or out of the account in a way that violates regulation. HSA’s are the only triple tax advantaged accounts that exist. Their long-term benefits and flexibility of use put a 401k to shame and send FSA’s hiding under their blankets of custodian-required receipts—but they are still governed by the IRS and should be opened and used only after one does their homework. 

I hope this helps!