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December 27th, 2012
07:20 PM ET

Hobby Lobby faces millions in fines for bucking Obamacare

By Eric Marrapodi, CNN Belief Blog Co-Editor

Washington (CNN)– Craft store giant Hobby Lobby is bracing for a $1.3 million a day fine beginning January 1 for noncompliance with the Patient Protection and Affordable Care Act, dubbed Obamacare.

The company opposes providing some contraceptives to employees through its company health care plan on religious grounds, saying some contraceptive products, like the morning after pill, equate to abortion.

After failing to receive temporary relief from the fines from the Supreme Court, Hobby Lobby announced late Thursday through its attorneys that it "will continue to provide health insurance to all qualified employees. To remain true to their faith, it is not their intention, as a company, to pay for abortion-inducing drugs."

In September, Hobby Lobby and affiliate Mardel, a Christian bookstore chain, sued the federal government for violating their owners' religious freedom and ability to freely exercise their religion.

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"All they're asking for is a narrow exemption from the law that says they don't have to provide drugs they believe cause abortions," Hobby Lobby attorney Kyle Duncan, a general counsel for the Becket Fund for Religious Liberty, told CNN affiliate KFOR in November. "Our basic point is the government can't put a corporation in the position of choosing between its faith and following the law."

The lawsuit says the companies' religious beliefs prohibit them from providing insurance coverage for abortion inducing drugs. As of August 2012, the Patient Protection and Affordable Care Act requires employer-provided health care plans to provide "all Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity," according to the U.S. Department of Health and Human Services.

Churches and houses of worship are exempt from the regulation and a narrow exemption was added for nonprofit religious employers whose employees "primarily share its religious tenets" and who "primarily serve persons who share its religious tenets."

In the face of that opposition, the Department of Health and Human Services tweaked its original rule in February to require health insurers, not employers, to cover the cost of contraception coverage, reasoning that would prevent religious groups from having to finance such coverage. Critics have argued that exemption for nonprofits is far too narrow and a host of nonprofit religious groups have sued the administration over the regulations.

The Internal Revenue Service regulations now say that a group health care plan that "fails to comply" with the Affordable Care Act is subject to an "excise tax" of "$100 per day per individual for each day the plan does not comply with the requirement." It remains unclear how the IRS would implement and collect the excise tax.

The Oklahoma City, Oklahoma, based Hobby Lobby chain has more than 500 stores that employ 13,000 employees across 42 states, and takes in $2.6 billion in sales. The company's attorneys say January begins a new health care plan year for Hobby Lobby and that excise tax from the IRS would amount to $1.3 million a day.

Hobby Lobby is owned by CEO and founder David Green and members of his family. "The foundation of our business has been, and will continue to be strong values, and honoring the Lord in a manner consistent with biblical principles," a statement on the Hobby Lobby website reads, adding that one outgrowth of that is the store is closed on Sundays to give its employees a day of rest. Each year the company also takes out full-page ads in numerous newspapers proclaiming its faith at Christmastime and on Independence Day.

The store is not formally connected to any denomination, but the Green family supports numerous Christian ministries and is behind the Green Collection, one of the largest private collections of biblical antiquities in the world. The family plans to permanently house the collection in Washington at a museum set to open in 2016.

On Friday, attorneys for Hobby Lobby petitioned the Supreme Court to intervene and provide temporary relief from the the fines until the case was decided by the U.S. 10th Circuit Court of Appeals in Denver.

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Wednesday evening, Justice Sonia Sotomayor, who handles emergency appeals from the 10th Circuit Court, said the company failed to meet "the demanding standard for the extraordinary relief," and that it could continue to pursue its challenge in lower courts and return to the higher court, if necessary, after a final judgment.

"Hobby Lobby will continue their appeal before the 10th Circuit. The Supreme Court merely decided not to get involved in the case at this time," Duncan said in a statement.

A spokesperson for the Justice Department declined to comment on the high court's move.

White House officials have long said they believe they have struck an appropriate compromise between religious exemptions and women's health. The White House has not commented specifically on the Hobby Lobby case.

"It's just so sad that Hobby Lobby is facing this choice. What company, even a successful family owned business like Hobby Lobby, how can they afford the government $1.3 million in fines every day? It's just really absurd that government is not giving on this," said Maureen Ferguson, a senior policy adviser for the Catholic Association. Religious liberty groups like hers are watching the Hobby Lobby case closely.

"I am optimistic that these cases will eventually snake their way back up to the Supreme Court and given a full hearing on the merits of the case, I am confident that the Supreme Court will rule in favor of religious liberty," Ferguson said. "But in the meantime there is serious damage being done to businesses like Hobby Lobby and nonprofit charitable organizations."

The Hobby Lobby case is just one of many before the courts over the religious exemption aspects of the law. The case represents by far the biggest for-profit group challenging the health care mandate.

After this piece of the law went into effect in August, religious nonprofits were given "safe harbor" of one year from implementing the law. "In effect, the president is saying we have a year to figure out how to violate our consciences," Cardinal Timothy Dolan, the Archbishop of New York, said in January when the administration announced the move.

Dolan's New York Archdiocese won a victory this month in its legal battle against the administration and the mandate. In May it sued the government in federal court in Brooklyn over the mandate, saying it "unconstitutionally attempts to define the nature of the church's religious ministry and would force religious employers to violate their consciences."

The government moved to have the case dismissed. On December 4, Judge Brian M. Cogan denied the government's motion to dismiss the case, saying the government's promise of changes to how it will implement the law were not enough to merit dismissal. "There is no, 'Trust us, changes are coming' clause in the Constitution," Cogan wrote in in his decision to let the case proceed.

UPDATE: Hobby Lobby's $1.3 million Obamacare loophole

- CNN Belief Blog Co-Editor

Filed under: Belief • Christianity • Church and state • Faith Now

soundoff (5,627 Responses)
  1. Poltergeist

    I don't need to know every HHR regulation. NFP aren't the only type of corporation that can get or need government grants. But if you need specifics REG-120391-10 under Legal Guidance for Group Health Plan Requirements is what gives religious nfps their exemption. It a special exemption granted specifically so these organizations do not have to violate their stances, if paying for contraception is against them. If the IRS is willing to make an exemption that respects the stance of a nfp, it's not unreasonable for that exemption to be extended to a corporation with a regular stance. This arguement is starting to circle itself so have the last word if you'd like.

    December 27, 2012 at 10:30 pm |
    • Good/Bad

      Except on of the stipultions for that exemption is that a significant portion of their employees also follow that same belief.

      So do all 1300 employees believe they should not use contraception per their religious belief?

      December 27, 2012 at 10:40 pm |
  2. Jay Garriss

    This issue is now a moot point for large employers like Hobby Lobby. Regulations issued late last month clearly exempt self-insured employers from the requirement to provide Essential Health Benefits under ACA. The "women's health" benefits, including the various contraception requirements, are part of the defined Essential Health Benefits. The requirements still apply to employers who are not self-insured, typically companies with less than 200-300 employees.

    December 27, 2012 at 10:30 pm |
    • lol??

      Makes sense, bully the smaller companies

      December 27, 2012 at 10:50 pm |
  3. Apple Bush

    I suck. I suck so much that I care about my reputation on the internet. I have no real friends and no reason to live.

    December 27, 2012 at 10:29 pm |
    • God of the Bible

      Well done, good and faithful serv.ant. You are doing exactly as I wish by taking another person's name and lying and pretending to be them in order to make them look poorly. What would Jesus do? Lie and steal ident.ities, that's what.

      December 27, 2012 at 10:41 pm |
  4. Atheism is healthy for children and other living things

    Will HobyLoby pay an employee who is a Fundamentalist LDS all spousals' benefits ?

    December 27, 2012 at 10:28 pm |
  5. Mark Dye

    It figures that a Christian-right organization would fervently oppose healthcare for all. Man, what's up is down in this country.

    December 27, 2012 at 10:27 pm |
  6. Suzie

    Employers are not allowed to discriminate. Period. End of story. Pay the fine, provide the insurance and shut up, HL. You just ain't all that special.

    December 27, 2012 at 10:26 pm |
    • tony

      Unless they can show god exists, and know it, they are committing deliberate fraud.

      December 27, 2012 at 10:33 pm |
    • lol??

      What about WAIVER MANIA like the unions got?

      December 27, 2012 at 10:48 pm |
  7. JerryG1

    Cry freedom.

    December 27, 2012 at 10:25 pm |
  8. Stayxsie Johnson

    And yet another company I will never shop at again!!

    December 27, 2012 at 10:22 pm |
  9. m

    Hobby Lobby is such a dorky company and their stupid religious music is enough to make someone sick to their stomach! I hope they pay a huge fine...the idiots!

    December 27, 2012 at 10:17 pm |
    • paul

      I have to agree. Another problem with their argument not to provide the morning after pill is their characterization of it as an abortion. Maybe they need to read a pamphlet or something because the morning after pill is taken to avoid an abortion.

      December 27, 2012 at 10:32 pm |
  10. allenwoll

    .
    Exercise your faith freely but PRIVATELY ! ! !
    .
    Others do NOT wish to hear of it or see of it or feel of it ! !
    .

    December 27, 2012 at 10:15 pm |
    • DC1973

      Hobby Lobby is not a person.

      Hobby Lobby is not guaranteed the freedom of religion because Hobby Lobby has no religion.

      On account of Hobby Lobby not being a person.

      Jeeze, people. How hard is this to comprehend?

      December 27, 2012 at 10:18 pm |
    • Rational Humanist

      DC1973, you'd better tell that to all the corporations that think they are people with people-type rights. Oops!

      December 27, 2012 at 10:21 pm |
    • hz

      feminists want to force somebody else pay for their abortion/contraception bills?
      if they don't want baby, buy a box of condom

      December 27, 2012 at 10:21 pm |
    • Moby Schtick

      Yeah, it's those feminists again, how'd you guess. ::rolls eyes::

      December 27, 2012 at 10:23 pm |
  11. floridasboy

    They should just close up shop! Fire the 20,000 employees and liquidate the stock.... Hostees did it for other reasons, but no need to run a business against your own conscience when forced by a godless government to do things against your own beliefs!

    December 27, 2012 at 10:15 pm |
    • Akira

      Godless government?
      No, separation of church and state.

      December 27, 2012 at 10:32 pm |
    • 3vilmonkey

      Godless government? GODLESS GOVERNMENT?!? Are you really that clueless?? Since when is GOD supposed to BE in the US Government?? Do you know what other countries insist on having GOD in GOVERNMENT?? SHARIA-LAW, Muslim, Middle-Eastern dictatorships... so, if you really want God in government so badly.. MOVE TO AFGHANISTAN.

      December 27, 2012 at 11:00 pm |
  12. petemg

    We have all heard on how Muslims are exempt from Obama care because it is a form of gambling and that is against their religion. If that is the case then if contraceptives are against one's beliefs shouldn't that be okay.

    December 27, 2012 at 10:14 pm |
    • DC1973

      And those of us who know how to use the magical Google know it's not even true. So, yeah. There's that.

      Try again.

      December 27, 2012 at 10:17 pm |
  13. shrillharpy

    So, there's a lot of discussion regarding religious freedom. (Opposite of religious freedom being secular freedom, perhaps?) If Hobby Lobby were allowed to recuse themselves from providing access to birth control because of beliefs, should secular organizations prohibit access to viagra? 'Cuz....Freedom!!!! This could go on forever.

    December 27, 2012 at 10:13 pm |
    • Good/Bad

      The best is perhaps a scientologist, or one of the other religions that are against thinks such as blood infusion, or medical services.

      Should then those companies with CEOs who follow said religion then be able to deny lift saving measures to their employees because doing so and allowing a hospital to perform, or them to choose to have it performed on them violates the CEOs religion.

      December 27, 2012 at 10:18 pm |
    • jeepguy6

      Good/Bad, Transfusions are just the beginning. Some religions do not believe in Any medications. Some are against transplants. We already let religions dictate too much in our everyday lives.

      December 27, 2012 at 10:25 pm |
  14. LogicTrumps

    Companies should not be associated with religion, period. The main reason would be that there would be employees that are not part of the company's endorsed faith and subject to harassment. Any rules that are faith based, must be purged from corporate policy. Otherwise, it is a very slippery slope.

    December 27, 2012 at 10:11 pm |
    • allenwoll

      .
      Logic Trumps - IF ONLY ! ! ! . Reason, too ! ! !
      .

      December 27, 2012 at 10:19 pm |
    • jem4016

      You assume the employee has to work for the company. Hobby Lobbies religious beliefs are well known for example they are closed on Sunday. It is naive approach to say that a company should not have religious views simply because you disagree with their views. Perhaps, steakhouses should stop selling meat because it might offend a vegan employee.

      December 27, 2012 at 10:20 pm |
  15. Moby Schtick

    This needs to be restated from below:

    Thanks to DC1973:

    Because they don't provide anything. They don't provide the insurance and they don't pay for it. They're asking to be allowed to not do something they don't do in the first place.
    .
    .
    .

    Thanks to heartbroken25:

    Would you consider it a reasonable request if the owner of Hobby lobby were a Jehovah's witness, religiously didn't believe in blood transfusions, and wanted that coverage removed from an employees plan as well?

    An employer who provides health insurance can not pick and choose what that insurance provides medically for his employees. If he is against birth control, he does not have to purchase it, use it, or provide it. But he can not request another company (the insurance company) bow down to HIS religious beliefs. The insurance company covers BC. That is their right. His religious beliefs should not impede that.

    December 27, 2012 at 10:11 pm |
  16. Guest

    Liberal: "I want you to pay the cost of my choices and consequences."
    Citizen: "I shouldn't have to pay the cost of your choices and consequences."
    Liberal: "Don't you be imposing your religious ideology on me. You bigotted moron, idiot, no-brain @#$%, @^&*... ...Where's the governent?! I need it to force this guy pay up. No-good, rotten, *(&&^, @#$@....

    December 27, 2012 at 10:10 pm |
    • DC1973

      Guest: I'm so d-u-m-b that I think I pay other people's insurance premiums...

      December 27, 2012 at 10:12 pm |
    • Good/Bad

      Yet you do pay for other peoples choices. If some one is fat lazy slob who smokes your insurance premiums increase due to the risk in the insurance pool you are a part of goes up do to that individuals choices to not exercise, not smoke, not eat health.

      One way or the other due to how insurance works you are paying for some one elses poor choices in their own health.

      December 27, 2012 at 10:15 pm |
    • Moby Schtick

      So, if you work for a Jehovah's Witness owned company, you'd like your insurance to not provide you blood transfusions? Interesting.

      December 27, 2012 at 10:16 pm |
    • jeepguy6

      Do you smoke? Are you overweight? Do you eat a lot of fried foods? Do you like the types of sugary products that cause diabetes? Do you drink alcohol? I could keep going but hopefully you get the point that you are asking those who do not partake in such things as smoking and drinking to help pay for your benefits. You see, a companies benefits costs are based on the entire population. So skinnier people have higher costs because of fat people. Non drinkers of alcohol have higher costs because of drinkers. Non smokers pay more because of the people who work at the company who smoke. So stop acting high and mighty pretending you are being forced to pay for others decisions when my guess is you fall into multiple categories that contribute to the high cost of insurance.

      December 27, 2012 at 10:19 pm |
    • jeepguy6

      Or they are paying for his bad choices Good/Bad.

      December 27, 2012 at 10:20 pm |
    • Dave

      Regulating the behavior of companies, which is just part of the ACA, does not = begging for a handout.

      This is about restructuring our health insurance and health care industry to provide people with better access, and hopefully reduce healthcare costs.

      Your cute little fictional conversation is utter nonsense.

      December 27, 2012 at 10:22 pm |
    • Guest

      All: That's absolutely right. But just because "that's just the way it is" doesn't mean we should be perpetuating that fallacy if we can help it in a particular instance. My daughter's dentist said she "needed" braces. Whoops, my employer's insurance doesn't cover that. I had a friend whose doctor told him that his extra fat was contributing to his back problems and that along with improving his health habits, he should get some lipo/reconstructive surgery. But what, his employer's insurance doesn't cover that either. Should we get the government to force every employer to cover these and all other inumerable discretionary medical procedures for every choice we make?

      December 27, 2012 at 10:36 pm |
    • Guest

      I’m actually not against the ACA, but I do believe that coverage should be very scrupulous and, yes, people who make certain health and other additional cost incurring choices should not get the same ride as everybody else. Also, I don’t see why health insurance should be covered through an employer at all. Do I get my groceries through my employer? Do I get my gas through my employer? No, I pay and get those separately and independently from my employer. Even for non-discretionary expenses. Even for mandated expenses like real estate taxes, etc. My employer isn’t involved. If the government decides to implement universal health insurance and levy a tax for that, why involve my employer? That’s just an unnecessary residual tradition of the previous system.

      December 27, 2012 at 10:57 pm |
  17. Dearth Vanderbilt

    People are, just, so, dumb............

    Nail Hobby Lobby to the wall.....give your min wage workers the right to help prevent unwanted pregnancies that would lead to them losing their jobs, sliding into bankruptcy and bringing another undereducated, ill-fed, candidate for early an prison term person into the world.

    December 27, 2012 at 10:07 pm |
    • lol??

      Perchance the lad needs a helpmate?

      December 27, 2012 at 10:44 pm |
  18. Apple Bush

    Fake AB, is it your intention to ruin my fun and sever my friendships with the likes of Akira, MAD, sam, Tom Tom, GOPer, and many others? Why? What sadness do you harbor that creates suck a prick as you?

    December 27, 2012 at 10:05 pm |
    • Akira

      Apple, he does this on all of CNN, when he can get away with it.
      He goes in cycles.
      He'll tire eventually.
      He posts under many names, when he is not hijacking our names.
      He is a sad individual; schaedenfruede, anyone?

      December 27, 2012 at 10:24 pm |
    • Apple Bush

      The blog is enjoyable and for grown ups. There is a trust. You are a violator. A bad person. No one can tell another what to do. But to misrepresent is vile.

      December 27, 2012 at 10:26 pm |
    • Rational Humanist

      Welcome to the club. Same thing happens to everyone here. Blame CNN for not having a minimum of brains.
      But there is a workaround. You have to register with WordPress, since this is a WordPress blog, and then your name will appear a lovely blue and cannot be stolen...theoretically. I've never bothered to do that, myself. I just pick another name and move on. Give up any ideas of keeping friendships going here, though. The name-stealing trolls will gladly ruin any friendships you may have.

      December 27, 2012 at 10:27 pm |
    • Mohammad A Dar

      Welcome back AB!!

      December 27, 2012 at 10:32 pm |
    • I wonder

      Apple Bush,

      The WordPress name registering thing might be an option for you. I know that you like to sometimes use creative screen names to match your posts, but I think that you can still do that even if you have a registered one.
      – Akira, do you know if that is the case or not?

      (AB, if you chose "Apple Bush", you should make it a capital "L" in there, or else the miscreants will put in a capital "i" ("I") and try to get away with it...)

      December 27, 2012 at 10:45 pm |
  19. Reality

    The reality of se-x, abortion, contraception and STD/HIV control: – from an agnostic guy who enjoys intelligent se-x-

    Note: Some words hyphenated to defeat an obvious word filter. ...

    The Brutal Effects of Stupidity:

    : The failures of the widely used birth "control" methods i.e. the Pill (8.7% actual failure rate) and male con-dom (17.4% actual failure rate) have led to the large rate of abortions and S-TDs in the USA. Men and women must either recognize their responsibilities by using the Pill or co-ndoms properly and/or use safer methods in order to reduce the epidemics of abortion and S-TDs.- Failure rate statistics provided by the Gut-tmacher Inst-itute. Unfortunately they do not give the statistics for doubling up i.e. using a combination of the Pill and a condom.

    Added information before making your next move:

    from the CDC-2006

    "Se-xually transmitted diseases (STDs) remain a major public health challenge in the United States. While substantial progress has been made in preventing, diagnosing, and treating certain S-TDs in recent years, CDC estimates that approximately 19 million new infections occur each year, almost half of them among young people ages 15 to 24.1 In addition to the physical and psy-ch-ological consequences of S-TDs, these diseases also exact a tremendous economic toll. Direct medical costs as-sociated with STDs in the United States are estimated at up to $14.7 billion annually in 2006 dollars."

    And from:

    Consumer Reports, January, 2012

    "Yes, or-al se-x is se-x, and it can boost cancer risk-

    Here's a crucial message for teens (and all se-xually active "post-teeners": Or-al se-x carries many of the same risks as va-ginal se-x, including human papilloma virus, or HPV. And HPV may now be overtaking tobacco as the leading cause of or-al cancers in America in people under age 50.

    "Adolescents don’t think or-al se-x is something to worry about," said Bonnie Halpern-Felsher professor of pediatrics at the University of California, San Francisco. "They view it as a way to have intimacy without having 's-ex.'" (It should be called the Bill Clinton Syndrome !!)

    Obviously, political leaders in both parties, Planned Parenthood, parents, the "stupid part of the USA" and the educational system have failed miserably on many fronts.

    The most effective forms of contraception, ranked by "Perfect use":
    - (Abstinence, 0% failure rate)
    - (Masturbation, mono or mutual, 0% failure rate)
    Followed by:
    One-month injectable and Implant (both at 0.05 percent)
    Vasectomy and IUD (Mirena) (both at 0.1 percent)
    The Pill, Three-month injectable, and the Patch (all at 0.3 percent)
    Tubal sterilization (at 0.5 percent)
    IUD (Copper-T) (0.6 percent)
    Periodic abstinence (Post-ovulation) (1.0 percent)
    Periodic abstinence (Symptothermal) and Male condom (both at 2.0 percent)
    Periodic abstinence (Ovulation method) (3.0 percent)

    Every other method ranks below these, including Withdrawal (4.0), Female condom (5.0), Diaphragm (6.0), Periodic abstinence (calendar) (9.0), the Sponge (9.0-20.0, depending on whether the woman using it has had a child in the past), Cervical cap (9.0-26.0, with the same caveat as the Sponge), and Spermicides (18.0).

    December 27, 2012 at 10:03 pm |
    • Dave

      Wow.

      You are not concise when you provide inaccurate information. So, I guess what I'm saying is you produce large amounts of BS.

      December 27, 2012 at 10:26 pm |
    • Reality

      Please cite the references to show the Guttmacher Insti-tute data are in error.

      December 28, 2012 at 7:06 am |
  20. Reality

    Some nitty-gritty:

    "Twenty-one states offer exemptions from contraceptive coverage, usually for religious reasons, for insurers or employers in their policies: Arizona, Arkansas, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan (administrative rule), Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Texas and West Virginia."

    http://www.ncsl.org/issues-research/health/insurance-coverage-for-contraception-state-laws.aspx

    December 27, 2012 at 10:01 pm |
    • DC1973

      Those are all current state laws, right? And they're all trumped by the ACA a year from now?

      December 27, 2012 at 10:14 pm |
    • Daniel

      I am from Arizona and looked at the Arizona statute which exempts such coverage for a "religiously affiliated employer". However, Hobby Lobby, Chick-Fil-A, and Mardel would not qualify as a "religiously affiliated employer". The definition is similar to the APA definition.

      December 27, 2012 at 10:17 pm |
    • Reality

      The state coverage exemptions are reviewed in the cited reference i.e. http://www.ncsl.org/issues-research/health/insurance-coverage-for-contraception-state-laws.aspx

      December 28, 2012 at 7:20 am |
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The CNN Belief Blog covers the faith angles of the day's biggest stories, from breaking news to politics to entertainment, fostering a global conversation about the role of religion and belief in readers' lives. It's edited by CNN's Daniel Burke and Eric Marrapodi with daily contributions from CNN's worldwide newsgathering team.