No, you do need to make a distribution and really use it for a QUALIFING purchase, then report the amount as non-qualifying. If you didn't use the HSA for 2023, you'll need to purchase some aspirin or something to get the money out.
Because you use it for a qualifying purchase, but claim you used it for a non-qualifying purchase, you are taking the earnings out and claiming the penalty. If you take a nonqualifying distribution, you would owe a penalty for that and still owe the penalty for the earnings on the excess contribution.
I would claim the amount of the earnings as non-qualifying and show the plan administrator your Form 8889 line 17 which reports the distribution of the earnings and the 20% tax. That should be good enough to remove the earnings and adjust the balance of your HSA account.
If they won't adjust the earnings reported on your 1099-SA, tell them you are going to roll it over into a different HSA account.
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