You can only take money out of one to reimburse you for a qualified medical expense.  The idea is that you put money into an HSA tax-free and then pay yourself back with that money to cover expenses under your deductible.  It's easy to instead get the money out years from now when you're ready to retire.

The important thing you need to know is that there is no requirement specifying when you need to take money out of an HSA to pay for medical expenses.  Because of this, you can save up receipts from normal purchases you make now (prescription medicine, band-aids, doctor/dentist visits, etc) and use them to make withdrawals from the HSA whenever you actually need the money.

By doing this you let the money in your HSA accrue interest tax-free until you're older and want to start putting that money to good use.  In this way, an HSA is a more effective retirement savings tool than an IRA.

If you're not quite sure how this works, I'll walk through an example.  Let's start by assuming that I contribute $500/year to an HSA.  Each year, I spend money on doctor visits, medicine, and various other medical expenses.  Each time I spend money on something medical-related, I save that receipt for later.

When it comes time for me to retire, my HSA has grown significantly because I didn't pay income tax on my contributions and I wasn't taxed on the interest (or investment returns).  I also won't be taxed when I withdraw the money.  Because I have decades of medical receipts saved up, I can effectively take money out whenever I want by "reimbursing" myself for things I bought decades earlier.

Below, I have excerpted the part of the bill that is pertinent to HRAs, FSAs and HSAs.

"17

FRAUD, WASTE, AND ABUSE

Fraud, waste, and abuse in Medicare and Medicaid would be reduced by a series of provisions to prevent and deter wasteful or fraudulent activity as well as assist in the identification and prosecution of such activity once it has occurred. These policies include: a new enrollment process for providers and suppliers, including an application fee; data matching and data sharing across federal health care programs; increased civil monetary penalties; increased authority to suspend payment during creditable investigations of fraud; and new procedures to disclose and repay overpayments.

REVENUE PROVISIONS

High Cost Insurance Excise Tax. An excise tax of 35% would be levied on insurance companies and insurance administrators for any health insurance plan that is above $8,000 for singles and $21,000 for family plans. The tax would apply to self-insured plans and plans sold in the group market, but not to plans sold in the individual market. The tax would apply to the amount of the premium in excess of the threshold. The threshold would be indexed for inflation, and a transition rule would raise the threshold by 20%, 10%, and 5% for the 17 highest cost states for the first three years.

Increasing Transparency in Employer W-2 Reporting of Value of Health Benefits. The proposal would require employers to disclose the value of the benefit provided by the employer for each employee¡¦s health insurance coverage on the employee¡¦s annual Form W-2.

Limit Health Flexible Savings Account Contributions. Contributions to health Flexible Savings Accounts (FSAs) would be limited to $2,000 per year under this proposal.

Eliminate Exclusion for Employer Part D Subsidy. The proposal would eliminate the exclusion from gross income for the subsidy for employers who maintain prescription drug plans for their Medicare Part D eligible retirees.

Standardize the Definition of Qualified Medical Expenses. The definition of qualified medical expenses for Health Savings Accounts (HSAs), Flexible Savings Accounts (FSAs), and Health Reimbursement Arrangements (HRAs) would be conformed to the definition used for the itemized deduction. An exception to this rule would be included so that amounts paid for over-the-counter medicine with a prescription still qualify as medical expenses.

Increase the Penalty for Use of Health Savings Account Funds for Non-qualified Medical Expenses. This proposal would increase the additional tax for Health Savings Account (HSA) withdrawals prior to age 65 that are not used for qualified medical expenses from 10% to 20%. "