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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. Pope on a Rope

    Religious freedom does not mean you have the freedom to impose your religious views on your employees. The owners of Hobby Lobby are not the victims of religious persecution. They are the persecutors.

    January 12, 2013 at 7:25 pm |
    • JAMBONI

      Go work for a gay establishment.

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

      @Jamboni – Were you offended because someone didn't look the way you thought they should? Were you offended because they didn't want to hear your religious pig squat? Psssst, that isn't religious persecution.

      January 12, 2013 at 7:43 pm |
  2. FedUpwithLa

    Who does Hobby Lobby think they are? Some innocent company trying to sell arts and crafts to housewives and children? Go get 'em Obama! Make an example out of them!

    January 12, 2013 at 7:25 pm |
    • Matt

      Exactly! Why make then honor an obligation they are legally bound to provide for their employees?! Follow the law? That's just ridiculous. Everyone knows god's law is the only law in the USA. What do you want it to be like Iran where the religion dictates what is and isn't illegal?

      (note: sarcasm. I'm saying that is EXACTLY what the United States is turning into)

      January 12, 2013 at 7:29 pm |
    • JAMBONI

      Obama is too busy covering up his lies to all the Sandy victims he promised the moon to.

      January 12, 2013 at 7:33 pm |
    • toofarawayfromboston

      @Matt – If the religious right has its way, it will turn into an "Iran." Ironic, huh? They will decry how awful those countries are and then create their own sharia law here... What hypocritical cretins the religious right is here in the USA...

      January 12, 2013 at 7:34 pm |
  3. toofarawayfromboston

    Sigh. Hobby Lobby would not be paying for the insurance. The employee would be doing so via the play for which the employee would elect to pay. Hobby Lobby has NO business telling any of its employees whether or not they should have access to ANY form of birth control – for any reason. It's amazing that this company and its legal representatives seem to be sneering at the law. They obey the laws they wish to obey and find loopholes or disregard the laws they dislike. This is so typical of right wing "Christians."

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

      DUH! Obama is forcing business to "provide" health insurance...provide = pay for, duh!
      I guarantee you there are perks they get that employees appreciate (such as Sunday off which is unheard of in retail) that they have simply BECAUSE the owners are Christian.....

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

      @Trish No, the company is not paying the premiums for those things. The individual employees are opting into those plans that are made available and then the employee pays the premium.

      January 12, 2013 at 7:36 pm |
    • JAMBONI

      How about Obama's abuse of making them pay for employee heathcare. The cheapskate employee should pay his own freight if he doesn't like his company's policy. Not everything is free in life; except for the wimpy 'give it to me' generation of American losers.

      January 12, 2013 at 7:38 pm |
    • William

      Yeah! Who do they think they are to just ignore laws like that, Liberals?

      January 12, 2013 at 7:40 pm |
    • toofarawayfromboston

      @Jamboni – Your right wing agenda is showing through. You're not worth any more of my or anyone's time. IF you have a job, which is doubtful, I bet you have health insurance. You're either another hypocrite or liar. Either way, a waste of space and time. Sayonara.

      January 12, 2013 at 7:47 pm |
  4. Gina

    Why is it ok that waivers were given out to avoid certain provisions and costs of this law to certain companies and organizations, and not others? Just asking. If everyone is supposed to participate, then there shouldn't be any waivers, right? But that simply isn't what happened. This will end up being just as messed up as the Social Security program is right now.

    January 12, 2013 at 7:24 pm |
  5. Bejeesus

    How convenient that while with one side of their mouths they scream separation of church and state and with the other side they try and impose religious beliefs on a business. IT'S A BUSINESS. It's practices are governed by LAWS not RELIGIOUS BELIEFS.

    January 12, 2013 at 7:24 pm |
  6. Choo

    "We'd rather our employees die than embryos to die," Hobby Lobby CEO.

    January 12, 2013 at 7:24 pm |
  7. guest

    if the pro-abortion lobby wants to use Big Government to coerce other tax payers into funding what they believe in (their religion) - i.e. that the murdering of unborn babies for any reason whatsoever is justified, shame on them. They are not "pro-choice," they are just salivating for others' money. But thumbs up for Hobby Lobby for standing up to these cowardly bullies including Obama. At some point, civil disobedience is the right thing to do.

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

      Shall we talk about gun control good sir?

      January 12, 2013 at 7:25 pm |
    • toofarawayfromboston

      LOL! Another ignorant one heard from. There is no pro-abortion lobby. There is a pro-choice lobby. No employer has the right to dictate whether or not an employee has the right to pay a premium for a medical/prescription service out of their own pocket when that right is granted by law.

      January 12, 2013 at 7:28 pm |
    • Mike

      Don't shop at any stores run by religious fanatics whether they be right wing Christian nuts or members of the Taliban.

      January 12, 2013 at 7:30 pm |
  8. Evolved One

    So many stupid idiots posting the same old drivel here. Learn how to discern fact from propaganda for a change. I cannot understand why healthcare options are considered by some to be the epitome of the end of freedom. For crying out loud, some of you really need to get your heads out of your backsides.

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

      Yep. What I, particularly, "love" is that these employers who are refusing these services, which are offered by the insurance companies, do not pay for the premium. The employee does – so it has nothing to do with the employer. In my opinion, no religious organization should be allowed to deny someone/anyone the rights granted by law. If they do so, then they should be stripped of their non-profit status. I bet they'd scream then.

      January 12, 2013 at 7:31 pm |
  9. lesmoore

    Now I know never to shop there

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

      We don't want you here.

      January 12, 2013 at 7:27 pm |
    • Johnathan Wilkes

      yes, please don't shop there... don't like to shop next to people that hate freedom of religion.
      do us all a favor and stay out of the public eye kid

      January 12, 2013 at 7:37 pm |
    • toofarawayfromboston

      I'd never heard of them prior to this article – but I shall never shop there, either. One can only hope that there are enough people who will stop shopping there – and another company can open up here in the US who will do what is right for all of their employees. Hobby Lobby needs to go down the toilet.

      January 12, 2013 at 7:38 pm |
  10. Mike

    Shouldn't the foundation of Hobby Lobby's business be selling high quality hobby supplies? I don't see what the Lord has to do with selling paint.

    January 12, 2013 at 7:21 pm |
    • Really now

      Hobby Lobby's business is shoving Jesus down as many throats it can by way of products made in Chinese sweatshops.

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

      for from Him and to Him and through Him are ALL things....Bible truth

      January 12, 2013 at 7:27 pm |
    • toofarawayfromboston

      @Really now – I wonder how many of those good "Christian" folks care about those who work in those sweatshops in China. I'd bet it's not enough to stop purchasing those items Made in China that are sold by Hobby Lobby. Their customers probably ate all that lead paint.

      January 12, 2013 at 7:41 pm |
  11. Slick

    What a joke that the government is forcing people/companies to supply the means to murder... Newton was a HORRIBLE incident, 20 children being killed pushes liberals to move on guns right away – but in Conn alone 17,000 abortions a year (46/day) is totally fine, perhaps even applauded by the left... seems off to me

    January 12, 2013 at 7:21 pm |
    • Evolved One

      How stupid can one be? Seriously stupid it would seem......birth control pills and the morning after pill are not abortion pills. That lie is something recently introduced in order to stir up emotions and has NO factual basis. Try doing some independent research outside of right wing, christian, pro life sources and maybe you will get the truth instead of what you just want to hear.

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

      Typical liberal – no mention of the 17,000 abortions in Connecticut, and throwing in things I never mentioned (morning after pills? Where did you get that from)... I do however, now believe in evolution, no doubt you came from a monkey!

      January 12, 2013 at 7:44 pm |
  12. Rob

    When someone explains how a legal construct - the corporation - can have a religion or religious liberty, then perhaps we can discuss Hobby Lobby's position.

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

      In America they aren't legal constructs. They're people. It's incredibly stupid.

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

      Citizens United v. Federal Election Commission made corporations superpeople, able to spend as much as they like to influence elections. Sad but true, our Supreme Court actually recognized the Corporate money as free speech.

      If corporations are deemed to have religious values, then I'm sure a pay-no-taxes corporate religion will emerge.

      January 12, 2013 at 7:29 pm |
  13. Really now

    I'm not sure why this matters much. They sued, the Supreme Court rejecteed their appeal, they are using a loophole to delay the fine, but in a few months, 1.3 million a day is going to slam them, and nobody in the government is going to help them.

    They can ride their beliefs right into bankruptcy court if they like, but let's face it – sooner or later, they will obey money over god and offer the full medical plan.

    January 12, 2013 at 7:21 pm |
  14. angelo

    this is what happens when you have a control freaks in the government, its ok for them to ban guns but they are pushing birth control pills and abortion that kills and maim millions of infants world wide. just in the U.S alone abortion kills 1.1 million infants a year and 55 million since 1974.

    January 12, 2013 at 7:21 pm |
  15. G5robo

    If this is Hobby Lobby owners religious beliefs, then aren't they doing the same thing by forcing their employees to adhere to there beliefs?

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

      Hobby Lobby is not forcing them to comply with their beliefs, they are simply not paying for them to commit murder.

      January 12, 2013 at 7:28 pm |
    • JAMBONI

      You do not have to work there. Go get a job at a Gay friendly store.

      January 12, 2013 at 7:30 pm |
  16. John

    Way too much government interference in our lives. This government is becoming a dictatorship by telling what we can and can't do in our private lives.

    January 12, 2013 at 7:21 pm |
    • Really now

      Much better to let the corporations be the dictators.

      January 12, 2013 at 7:22 pm |
    • Moby Schtick

      This issue has nothing to with a company trying to control the private lives of its employees. The government, in this case, is doing what it always has done in asking corporations to obey the law set forth by the congress. Hardly a new idea.

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

      Who needs worker's rights? Back to the 12 hour work day!

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

      Private lives? Corporations have government charters. These Hobby Lobby people freeload on the privileges of the corporate form, but ignore the responsibilities.

      January 12, 2013 at 7:24 pm |
    • Moby Schtick

      Sorry, I mistyped. The government isn't trying to control "private lives" here, but setting for the law for the corporation--who is trying to control private lives. Are you saying it's bad for the government to do it (which it isn't in this case) but good for the corporation to do it?

      January 12, 2013 at 7:25 pm |
    • Name*penguin

      Yeah. Let's do away with government regulations. I'm sick and tired of not being able to drive on any side of the highway at any speed. And to think the government would take away the nuclear bomb I need to defend myself.

      January 12, 2013 at 7:27 pm |
    • bill

      Actually, it's the exact opposite in this case. The government wants to give the employees of Hobby Lobby a choice to do what they see fit in their private lives, the corporation they work for us deciding for them.

      January 12, 2013 at 7:27 pm |
  17. acdc1

    It's a lot cheaper for the pill, then carry the child for welfare payments. Just think of the father not taking care of the Kid for 18 years . It;s a lot like guns that kill ,right

    January 12, 2013 at 7:20 pm |
  18. Matt Damon

    Never under estimate the power of a good lawyer.

    January 12, 2013 at 7:20 pm |
  19. Matt

    Too bad they don't have stores in Minnesota. Sounds like one of the best places I could be arrested for disrupting business at in all the land.

    January 12, 2013 at 7:20 pm |
  20. SAB

    Awesome news! Happy that they were able to find a way to buck this outrageous requirement, if only temporarily.

    January 12, 2013 at 7:19 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.