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January 11th, 2013
03:40 PM ET

Hobby Lobby finds way around $1.3-million-a-day Obamacare hit - for now

By Eric Marrapodi, CNN Belief Blog Editor

Washington (CNN) - By Friday, Hobby Lobby would have racked up $14.3 million in fines from the Internal Revenue Service for bucking Obamacare. But in keeping with the great American tax tradition, they may have found a loophole.

The company is facing $1.3 million a day in fines for each day it chooses not to comply with a piece of the Affordable Care Act that was set to trigger for them on January 1. The craft store chain announced in December that, because of religious objections, they would face the fines for not providing certain types of birth control through their company health insurance.

The penalty was set to go into effect on the day the company's new health care plan went into effect for the year.

Peter M. Dobelbower, general counsel for Hobby Lobby Stores, Inc. said in a statement released through the Becket Fund that, "Hobby Lobby discovered a way to shift the plan year for its employee health insurance, thus postponing the effective date of the mandate for several months."

The statement continued that "Hobby Lobby does not provide coverage for abortion-inducing drugs in its health care plan. Hobby Lobby will continue to vigorously defend its religious liberty and oppose the mandate and any penalties."

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Last month Supreme Court Justice Sonia Sotomayor rejected the company's appeal for a temporary relief from the steep fines while their case made its way through the lower courts.

Hobby Lobby announced a day after the ruling 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.

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, dubbed Obamacare, 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."

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.

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

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.

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The Oklahoma City-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. It is still privately held 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.

MORE BACKGROUND: Hobby Lobby faces millions in fines for bucking Obamacare

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.

Part of the reason Sotomayor rejected their appeal to the Supreme Court she wrote was because their case is still pending in the 10th Circuit Court of Appeals in Denver.

A spokesperson for the Becket Fund said on Friday a date has yet to be set for the case to be heard in the 10th Circuit.

- CNN Belief Blog Co-Editor

Filed under: Belief • Church and state • Courts

soundoff (4,609 Responses)
  1. Name*penguin

    I hope Hobby Lobby continues its errant ways. Our treasury can use the money gathered in fines. Of course I won't purchase anything from it, so I won't be contributing to its cophers.
    If it wins its case, I should be able to reduce my tax bill proportionally to the amount of defense spending to total spending because I object to defense spending on religious grounds.

    January 12, 2013 at 7:19 pm |
  2. Steve

    This is a battle worth fighting. Abortion is wrong. There are other methods of birth control available – use those instead. The progressive immorality of this nation is sickening. Time to use the "civil disobedience' lessons learned from MLK for all those who have faith in God and submit to His laws over man's.

    January 12, 2013 at 7:19 pm |
    • Rational Libertarian

      Who are you to decide what is right and wrong?

      January 12, 2013 at 7:21 pm |
    • Trinka

      Uh, except nobody said anything about abortions...and this isn't what HL is trying to avoid...

      January 12, 2013 at 7:39 pm |
  3. Matthew

    Good for them! This used to be a free country. These kind of decisions should be left up to the employer. If the employees doesn't like the healthcare provided, they can go work somewhere else. After all, no one is forcing these people to work there.

    January 12, 2013 at 7:18 pm |
    • djc84

      Funny. But now in Right to Work states you can get all the benefits of being in a union without having to pay for it. The union has to treat you like anyone else but you're "free" not to pay. Funny how that's freedom. Curious. Are you "free" to go over the speed limit? How much Sudafed are you allowed to buy? You're just another fool. Most likely a con. Garbage like this is typical of cons.

      January 12, 2013 at 7:21 pm |
    • Matt

      "Religious Objections"?!! LMAO what are they Satanists?

      January 12, 2013 at 7:22 pm |
    • Rozznittz

      For profit companies do not have the right to decide how their employees live their lives. Your interpretation of history in this country is questionable. And I have a Master's in it.

      January 12, 2013 at 7:24 pm |
    • Wesley

      I can't believe how stiff the penalties would have been on this business because of Obamacare.

      $1.3 million a day in fines? Talk about govermnet forcing companies out of business and people loosing their job. Disgusting.

      January 12, 2013 at 7:25 pm |
    • Sane Person

      Well, they cant put "Hobby Lobby" in jail. Do you suggest they simply take away thier lunch money? Its $100 per employee, per day. Easily avoidable by following the law like most other companies. They already cheat most of thier employees by not giving them "full time permanent" status anyhow to avoid giving them any insurance whatsoever.

      January 12, 2013 at 7:56 pm |
  4. djc84

    Lol! I swear people are so stupid. This is what this world is coming to. "Hobby Lobby will defend its religious liberty." That's the best line ever. Hobby Lobby is a STORE. It is a COMPANY. It is NOT a PERSON. What church does Hobby Lobby attend exactly and can I go with it to service? Will Hobby Lobby ever marry? Will it be "fruitful and multiply?" Has it ever broken one of the 10 Commandments and if there's any question about that is it to the law of the land or the law of the Bible. You have to have the IQ of a mountain goat to fall for this crap.

    January 12, 2013 at 7:18 pm |
    • mcjny

      religion is so useful for making money. I mean one of the biggest land holders in America for years was the tax catholic church. Its comedy. dark, sick comedy.

      January 12, 2013 at 7:21 pm |
    • Rational Libertarian

      I have an IQ of 130 (who puts any stock in IQ scores anyway?) and I believe companies should have the same rights as citizens.

      January 12, 2013 at 7:23 pm |
    • Dapple

      To be fair... there are multiple Hobby Lobbies... so it has multiplied in a way... and it can always marry Joann... lmao.

      January 12, 2013 at 7:32 pm |
    • pookergirl

      Kudos to you and your comment! Completely agree, 100%. I would never have an abortion (personal choice) but believe strongly in things like contraception and the morning after pill, etc. I'm disgusted with Hobby Lobby.

      January 12, 2013 at 7:35 pm |
    • pookergirl

      I work for a Catholic company that does nothing but slash our benefits year after year, now they have chosen to contribute NOTHING to our retirement anymore, all the while going out and acquiring more and more smaller hospitals in takeovers. Will they cover my birth control pills? Nope. They don't have to. They are as greedy as all get out but I'm supposed to swallow what they dish out.

      January 12, 2013 at 7:37 pm |
  5. AgonyF

    I wonder if they sells supplies for the Abortion Hobbyist?

    January 12, 2013 at 7:18 pm |
  6. SherryF

    How does Hobby Lobby's religious beliefs explain away the numerous 'pagan' items that are for sale at their stores?

    They're a for-profit business; suck it up.

    January 12, 2013 at 7:18 pm |
    • Oliver Cowderey

      You've just loophole'd them. Excellent!

      January 12, 2013 at 7:26 pm |
    • pookergirl

      AMEN SISTER!

      January 12, 2013 at 8:34 pm |
  7. eric

    "obamacare" isnt forcing anyone to pay for abortions, its forcing you to cover a womans healthcare completely, regardless of what she chooses it for. theres no abortion checkbox people, its still up to the woman, not her employer, whether or not she chooses to have an abortion, and that should be no one's business

    January 12, 2013 at 7:17 pm |
    • Auntie

      "completey cover a woman's health care"

      unless that woman has autism. Then she's on her own. Don't you think that there are bigger battles to fight than contraceptives? 1 in 88 children is born with autism and there are no mandates in ACA to protect them.

      Let's focus on what's important and work on needed medical care vs. optional medical care.

      January 14, 2013 at 4:36 pm |
  8. Michael A

    My religious beliefs require all religious organizations to be taxed 50%

    January 12, 2013 at 7:17 pm |
  9. Ted

    If Hobby Lobby only cared about money they would be opened on sunday.

    January 12, 2013 at 7:17 pm |
  10. Kelleb

    Hobby Lobby & any other business does not get to push their personal belief system on the public. Period.

    January 12, 2013 at 7:17 pm |
  11. Dave

    These drugs are not only for abortions. They can be prescribed after miscarriages.

    January 12, 2013 at 7:17 pm |
  12. Viagra covered

    Why is Viagra covered by insurance? Seems like if men were the ones getting pregnant, the "pill" would not be a problem

    January 12, 2013 at 7:16 pm |
  13. theaverageamericancitizen

    Welcome to the United States of China

    January 12, 2013 at 7:16 pm |
    • Moby Schtick

      Stupid troll is stupid.

      January 12, 2013 at 7:17 pm |
  14. LI_Bri

    All Obama supporters should use birth control.

    January 12, 2013 at 7:16 pm |
    • Brad

      How long have you been waiting to use that gem? Also, lame.

      January 12, 2013 at 7:27 pm |
    • Sane Person

      They likely do. Everyone should use birth control. Rampant baby making when not prepared or desired is simply a dumb idea. Really sorta makes you wonder why you would be against it, and, why you would think being smart enough to use it is... an insult.

      January 12, 2013 at 7:34 pm |
  15. Zane

    I am a follower of Christian Science, and I don't believe in any kind of medicine except for spiritual healing.

    Does that mean I am exempt from providing health care for the 64 people I employ?

    January 12, 2013 at 7:16 pm |
    • Moby Schtick

      Evidently, yes. I would like to see the issue you raise addressed in the media and by the administration.

      January 12, 2013 at 7:18 pm |
    • brian

      Um yes it does, why should the government push there lack or religion on us?

      January 12, 2013 at 7:25 pm |
  16. Charlie

    So if you don't like any law, start a church or create a belief in a church and simply claim the law is not consistent with your beliefs. There you go, we now effectivly have no laws at all.

    Or we can simply say your church beliefs have nothing to do with a business. If you want to practice religon, go to church. If you want to have a business, obey the laws.

    Let me see, what law do I not want to obey???

    January 12, 2013 at 7:15 pm |
  17. Matt

    Where would people be without their imaginary friends?

    January 12, 2013 at 7:15 pm |
  18. Obama sux

    If Obama doesn't enforce the laws he doesn't like, like immigration, DOMA, etc, how can you condemn Hobby Lobby for playing by the rules?

    You'd love for Hobby Lobby to shut down so you can feel some kind of vindication and you wouldn't care about all the jobs that were lost. You idiots...

    January 12, 2013 at 7:15 pm |
    • Matt

      It's a retail store so I assume those "jobs" are low-paying and often part time so they can avoid paying ANY healthcare or benefits to their employees if they can. I'm pretty sure those are a dime a dozen so I'm not too worried about it.

      January 12, 2013 at 7:17 pm |
    • Brad

      You know the executive branch doesn't enforce laws, right? Because if you didn't, then you would look like an idiot.

      January 12, 2013 at 7:25 pm |
  19. jo

    Bet Hobby Lobby sells coathangers. Maybe this is just their way of expanding their business?

    January 12, 2013 at 7:15 pm |
  20. Joe Crock

    Close all 500 stores, fire all 13,000 employees and let Obama find them jobs........

    January 12, 2013 at 7:15 pm |
    • Folkingtales

      It's hard to say this....but I agree. These socialists will be the end of our great nation under God.

      January 12, 2013 at 7:16 pm |
    • Moby Schtick

      I used to find it surprising that "christians" always looked for the resolution that hurt the most people, and then one day I realized that's god's way---you know, "Love your enemies, but I'll be torturing mine forever in a pit of never ending fire."

      January 12, 2013 at 7:21 pm |
    • Sane Person

      We can only hope. Then some rational and responsible (and likely even profitable) company can buy the pieces and get the employees the coverage they deserve, like every other company. Your religion does not dictate my reproductive rights.

      January 12, 2013 at 7:22 pm |
    • Brad

      @Folkingtales: You know that this great nation was founded by atheists and deists, right?

      January 12, 2013 at 7:23 pm |
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About this blog

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 with contributions from Eric Marrapodi and CNN's worldwide news gathering team.