MELISSA BLOCK, HOST:
We're going to try to break down now just what those penalties will be for those who don't buy health insurance. The Congressional Budget Office projects in the year 2016 four million people will pay the penalty. I'm joined now by Timothy Jost. He's law professor at Washington and Lee University in Lexington, Virginia, and he's been looking into these numbers. We should say, Professor Jost, first off, you are also a supporter of the Affordable Care Act, right?
TIMOTHY JOST: That's correct, yes.
BLOCK: Well, let's talk about these penalties. They're phasing in; they're going to be fully in place by 2016. So in that year, what's the penalty for an individual who does not but health insurance?
JOST: Well, it will be the greater of $695 or 2.5 percent of that person's income above the tax filing limit, which in that year will probably be something like $10,000 for an individual. Now, if the penalty is for a family, it will be twice that for a couple - or rather, twice the $695 amount - and then, again, half as much for each child, up to a total of three times that amount so that the largest penalty you could face would be three times $695 or 2.5 percent of income.
BLOCK: So there is a cap? There's an upper limit?
JOST: There's a cap, and actually beyond that there's another cap. You can never be charged more than a health insurance policy would cost you, so you always have the option of just buying a health insurance policy.
BLOCK: And that would be about how much? What are they figuring there?
JOST: You know, we're talking about several years hence, but I think that the family policy would probably be about $15,000. We're talking about a very basic, what's called a bronze level policy, a very basic, high deductible policy.
BLOCK: The penalties are going to be administered through the IRS. How is that going to work?
JOST: Well, you'll just file your return at the end of the year and there'll be a box saying, did you have qualifying health insurance? And, if you did, then you'll just breeze on from there. If you didn't, then you'll be asked to add the penalty onto your taxes.
BLOCK: And, if you were to say, I'm not going to pay the penalty, what happens? What's the enforcement mechanism?
JOST: Well, if you were expecting a refund, they will deduct it from your refund. If you were not expecting a refund, then there's not much they can do to you. The statute prohibits them from imposing criminal penalties. It prohibits them from levying against your property. It prohibits them from putting a lien on your property. It would just remain an outstanding obligation to the IRS.
BLOCK: But they could automatically take that money out of a refund if somebody were getting a refund?
JOST: There are no rules on this yet, but that's the expectation. It's an obligation that you owe to the IRS and, in that sense, it's treated like any other obligation.
BLOCK: We should say that there are a number of people who will not be buying health insurance who also will not be subjected to this penalty. Right?
JOST: That's correct. Basically, the most important exemption is that if you can not find a basic health insurance policy for less than eight percent of your income, you won't owe the penalty. And so, unless you're getting help from the government or unless you're getting help from your employer, if you're buying health insurance with your own money, you're going to have to have a significant income before you're going to owe the penalty and it's estimated that only one or two percent of the population is going to be subject to the penalty in that way.
BLOCK: Professor Jost, thanks so much for talking with us.
JOST: Thank you very much.
BLOCK: That's Timothy Jost, law professor at Washington and Lee University in Lexington, Virginia.
AUDIE CORNISH, HOST:
There's a lot to digest about the health care law, confusing numbers, confusing regulations, questions like what goes into effect when? How will the health insurance exchanges work? Will costs go up? Down?
BLOCK: Well, we want to hear your specific questions about the Patient Protection and Affordable Care Act and how it could affect your life going forward. To write to us, please go to NPR.org and click on Contact Us and put Health Care Question in the subject line. We'll get you some answers on the air next week. Transcript provided by NPR, Copyright NPR.