Health Savings Account Distribution for Insurance Premium

My client used his HSA to pay his HDHP insurance premiums. He was completely unaware he could not do that. It amounts to about $7,000 and the checks were written out directly to the insurance company. He has at leaste that much paid out in "qualified medical expenses" from his personal checking account

Do you think he could just refund the HSA for the insurance premiums and request reimbursement from his HSA for the out of pocket pualified medical expenses he paid from his personal account....

I understand there should be a 10% penalty for distributions not used for qualified medical expenses, but this is a true misunderstanding on my client's part. I was hoping for some sort of way to reimburse the account.....I am advising the client to reimbuse the HSA an amount exactly equal to the insurance premiums paid out, and then write a check to himelf for the qualified expenses he paid out of his personal account, but not in excess of $5500....what do you think?

I worry the bank (trustee) will not know how to code the reimbursement, and we could open things up even more.

The client also over contributed to the account. He contributed about $5400. This is for an individual over the age of 55 but under the age of 65. I understand the contriburtion limit is $3650. I am advising the client to withdrawal this excess with it's earnings before April

Any thoughts and help is appreciated

Marie