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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. ShingoEX

    Gotta love the corporate excuse for fattening their own wallets, and not giving a crap about their employees. There need to be laws to prevent this type of greed.

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

      What employees need is a nice shiny made up word like the employers get: "job creators."

      I vote "job actuators". As is they are the ones who actually do the work that make the company profitable and successful.

      January 12, 2013 at 7:34 pm |
    • don't do crazy things

      In this case there is.

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

      "profit creators" is apt.

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

      Hobby Lobby's minimum wage for full-time employees is $13 an hour. I'm not sure where this fits in the claims that the company is making a profit on the backs of its employees.

      The majority of the drugs they're refusing to pay for cost less than $10 a month. They won't fire anyone who buys them, but they do hold that they should not have to pay for them since they believe there's the potential that they end a human life.

      Interestingly, pro-choice medical professionals used to say that it was nonsense that the pill could cause an abortion, until it looked like one state might outlaw all abortions. Then they protested that such a law might outlaw many common versions of the pill since they could cause abortions.

      The bottom line is that there are different views of when life begins. Some believe that it begins at conception, some believe that it begins some time during a pregnancy, some believe that it begins at birth, and some believe that it begins at some time after birth.

      January 12, 2013 at 7:47 pm |
    • Moby Schtick

      The bottom line is that COMPANIES have to follow the laws set forth by the congress of the united states regardless of what religious or political views are held by some of the PEOPLE that work at the company. Yep, people have religious freedom, but not companies--they aren't people. And no, a company cannot force its workers to do things because of the religious belief held by someone else that works at that company.

      January 12, 2013 at 8:24 pm |
  2. trollol

    Maybe the drive for pro-life by the wealthy isn't what it appears to be. Perhaps they don't want the working class to have easy access to birth control as they do because it would reduce the working class population. It would mean less workers to work in the factories and less people to buy the products made in the factories. That could hurt the bottom line! Oh gosh, I'm just being silly aren't I?

    January 12, 2013 at 7:32 pm |
  3. don't do crazy things

    Our hobby is to lobby for control over morality.

    January 12, 2013 at 7:32 pm |
    • don't do crazy things

      We don't really know what it is or what we will do with once we get it but we want it anyway.

      January 12, 2013 at 7:33 pm |
  4. ernest

    You can;t fix stupid.
    500 stores.....400 stores....300 stores.......golly! we;re in chapter 11!

    January 12, 2013 at 7:31 pm |
  5. Eriberto Aguilar

    Awesome. A rapacious big-box store responsible for the destruction of countless smaller, mom-n-pop hobby shops and with them, the destruction of many, many livelihoods, now goes for the throat of its own employees in the name of the religious faith of the owners. Some "Christians." Church, anyone? NO THANKS.

    January 12, 2013 at 7:30 pm |
    • Rational Libertarian

      Yeah, how dare they build a successful chain of stores? We should all live in huts and live off subsistence farming.

      January 12, 2013 at 7:33 pm |
    • Hobby Lobby

      Now now, mom and pop prefer minimum wage to owning their own business.

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

      The concept of "evil" was created by religious groups, to justify having something to crusade against, and demonize those who disagree with them.

      January 12, 2013 at 7:37 pm |
  6. chill485

    Why do you not find it outrageous that a for-profit corporation is allowed to foist their own religious beliefs on all of their employees? It's one thing for a church or qusi-church organization to expect it's employees to accept its tenets, but a hobby shop?

    January 12, 2013 at 7:30 pm |
  7. Jake

    If a woman cannot afford to pay out of pocket for their own abortion- then they definitely cannot afford to be a parent. Too bad there isn't a non-profit offering sterilization for these women, that's be a lot cheaper than abortions & plan b, etc.

    January 12, 2013 at 7:30 pm |
    • trollol

      Let us revive eugenics! We can start with the religious adults...

      January 12, 2013 at 7:49 pm |
  8. ipmutt

    You thing the SS tax was a shock. Just wait. Pay up now, Pay up more later, It is all going down the drain in 10 years. You are to blame

    January 12, 2013 at 7:29 pm |
  9. TrueChristian

    Saying that RU-486 is an abortion pill is the same as saying a woman's period (or a man taking care of his own "business") is committing abortion!!

    January 12, 2013 at 7:29 pm |
  10. mason

    This is using religon as a red herring. I hope they get nail with millions in fines. They care nothing about the health care welfare of women. There real hobby is misogyny

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

      Please Hobby Lobby, please please please keep racking up the fines so your rich owners can help pay for some of our country's debt with their bonus money

      January 12, 2013 at 7:31 pm |
  11. Jason

    If a "religious" company chooses not to offer something like birth-control to women, then so be it. It is not a big deal, and if your a women and work there, find a company that will offer it. Shop for your benefits.

    January 12, 2013 at 7:28 pm |
    • Rational Libertarian

      Second.

      January 12, 2013 at 7:31 pm |
    • TrueChristian

      Well hekk,why didn't I think of that?? Tomorrow, I am going to proclaim my FOR PROFIT company is religious so I can opt out of Obamacare. I'll also force everyone to pray to the god of my choosing before and after every shift in the name of religion. Allahu akbar!!

      January 12, 2013 at 7:35 pm |
    • Rational Libertarian

      And it's your right as a private enterprise, although I oppose tax exemption on religious or charitable grounds.

      January 12, 2013 at 7:38 pm |
  12. Spydyee

    Well this is why we need a government option so that people that work at these ultra religious businesses can get the healthcare they need in spite of their employer. Although I am a person of faith, I do not believe my employer has the right to shove their religion down my throat. It is one thing for a business to close on the sabbath that the owner's recognize or for a hotel owned by a person of faith to put the holy book of the owner's religion in the rooms but refusing me a specific form of healthcare because of their religion is wrong. The next thing you know the Adventist Health Care System will be refusing to treat people that eat meat or work on Saturday. Personally, I would not work for a company that tried to control my healthcare choices by controlling my insurance coverage. I also know that I will not buy anything from Hobby Lobby ever again until they stop this behavior. They have lost my business.

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

      You are spot on. Never will I spend a dime in their stores. I am a Christian but this aggravates me.

      January 12, 2013 at 7:33 pm |
  13. Carlin123

    Praise Da Lawd!

    January 12, 2013 at 7:28 pm |
  14. Rozznittz

    I am glad to know this. I almost went to one of their stores to shop, and I will not give them my business. A For Profit Company does not have any right to dictate how their employees live their lives. It is not a basis for employment. This company is NOT a Church. What in the hell is in the water this guy is drinking?? How is this any different than Christian Sharia Law?? This is my belief so it goes for everyone else?!

    January 12, 2013 at 7:28 pm |
  15. Dee

    Hobby Lobby can count me as a former customer, too.

    January 12, 2013 at 7:28 pm |
  16. Wini

    I am at a bit of a loss: Hobby Lobby doesn't want to pay for health insurance that requires providing objectionable services, based on the religious beliefs of the owners. I would think it reasonable to assume that all of Hobby Lobby employees do not share the the owner's religious views. So why does Hobby Lobby think it is acceptable to impose their personal beliefs on employees? If the employees feel as strongly as the company owners, the issue should be moot–said employees would never try to obtain the objectionable services.

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

      You do not like the values the company supports, do not work for this company.

      January 12, 2013 at 7:30 pm |
    • Dan Jones

      Wini, can you really be so clueless? It doesn't matter one bit what the beliefs of the employees are as it is the owner that is being represented. Think how the ACLU would like being forced to provide Bibles to employees or for the Brady Group to be forced to buy AR15s for all of their employees. It is the owners and the owners alone that set the tone and the goals of a company.

      January 12, 2013 at 7:36 pm |
  17. sunlover

    Another place I plan to boycott!!

    January 12, 2013 at 7:26 pm |
    • Rational Libertarian

      I think they'll probably survive.

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

      How is this place still in business?

      January 12, 2013 at 7:28 pm |
    • Rational Libertarian

      People like tat.

      January 12, 2013 at 7:29 pm |
  18. Wayne

    A business doesn't have religious rights, they're neutral. The owners religious values although being cornered by a law they don't like still have too keep those values out of the way of there business' obligation too provide their workers their rights.

    January 12, 2013 at 7:26 pm |
  19. TEHb

    Liberalism is a mental disease and should be treated. I feel safer around schizos than liberals. I have leaved in the Soviet Union during the communist rule and the comees talked and believed the same things I hear now from American people. It is shocking! Tomorrow they will start persecuting for religious believes calling it a “hate crime” for “the sake of freedom”. They have to take guns first though. The moral principles of godly people are restraining their freedoms to the point they will try to get rid of godly people inevitably. Then, they will take a real care of rich/capitalists. Well, the end is very well known.

    January 12, 2013 at 7:26 pm |
    • Tristen Cruz

      Sounds like you need to take more English classes. Welcome to the United States.

      January 12, 2013 at 7:34 pm |
    • Trinka

      You are a liar. You are not from the former Soviet Union.

      January 12, 2013 at 7:34 pm |
    • TEHb

      Hey thanks, I will enroll next semester.

      January 12, 2013 at 7:37 pm |
  20. Choo

    They also shouldn't pay any woman who might be pregnant because her wages might be used to pay for an abortion.

    January 12, 2013 at 7:26 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.