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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. alex

    Real Christians don' t cheat on their taxes.

    January 12, 2013 at 7:47 pm |
  2. Ted

    Boycott Hobby Lobby. They'll get the massage,

    January 12, 2013 at 7:47 pm |
    • Deep Throat Massage Parlor

      Hobby Lobby's execs already "come" in for massages. We have a special room where they can repent afterwards so they can stay good Christians

      January 12, 2013 at 7:51 pm |
  3. Patti

    I believe the government has NO right to tell us what to give and not give even though they are and we are complying or else jail time. However, to force a company to add this is wrong and I agree with Hobby Lobby! This is crazy! Just don't work there if you want it in your insurance. I agree with them and will volunteer to help them b/c the obamacare needs to notcare!!!

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

    It's high time we as a purportedly sane nation banned both guns AND religion! The throwbacks - that's the NRA gun-ghouls along with the committed-ignorant evangelicals - have had their way for way too long in the halls of US government. Ever notice how they turn out to be the same people anyway? Get them out! Let them all go to Guyana; we'll even throw in another Rep. Ryan!

    January 12, 2013 at 7:47 pm |
    • Aaron

      First lets ban freedom of speech from people like you. I will gladly do it.

      January 12, 2013 at 7:49 pm |
  5. DJ

    But they have no problem selling overpriced merchandise and robbing people blind. That furniture they sell is poor quality at ridiculous prices.

    January 12, 2013 at 7:47 pm |
  6. Stewart

    Okay; these companies are screaming bloody murder about providing contraception because it interferes with their religious beliefs that preventing pregnancy is against GOD'S natural biological order. So lets make sure that none of the males in the company can be given prescriptions for any ED drugs such as Cialis or Viagra. After all, having your noodle go limp is GOD'S natural biological order, isn't it? Giving a man a drug to give him a woodie goes against the natural process of GOD'S natural biology, right?

    January 12, 2013 at 7:46 pm |
    • Matt

      Penis pills are my entire argument for it being stupid to keep people out of the MLB's HoF.

      January 12, 2013 at 7:48 pm |
    • Rational Libertarian

      The Christian Tony meets at the hospital in The Sopranos answers that question.

      January 12, 2013 at 7:49 pm |
  7. Matt

    Hobby Lobby would ban Burqas if it didn't mean they'd have to start hiring Muslims.

    January 12, 2013 at 7:46 pm |
    • Rational Libertarian

      It would be nobody else's business if they did ban burqas.

      January 12, 2013 at 7:48 pm |
  8. Thread

    Actually, they only provide health care to a tiny percentage of their employees, usually the managers. They are notorious for scheduling everyone else to less hours than the minimum so that they don't have to provide it.

    It's a Jesusy thing to do.

    January 12, 2013 at 7:45 pm |
  9. yoyo5749

    Hobby Lobby is another wannabe Walmart....They like cheap wages and high health plan....More profit in there pocket....The worker pay for there health plan....Hobby Lobby pay nothing ......Let the employee decide for themselves.....

    January 12, 2013 at 7:45 pm |
  10. Sebastian2

    So its employees continue to get screwed out of healthcare benefits, while the owners of Hobby Lobby duck behind religion.

    January 12, 2013 at 7:44 pm |
  11. Michael

    It's ridiculous that Hobby Lobby claims to have religious liberties. Its employees do, but that's another issue entirely. I get tired of these nonsensical claims that corporations are people.

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

    Health benefits are part of your pay. Nt a gift from your employer. If you have an employer, for example, who is Mormon, that employer cannot forbid you from spending pat of your paycheck on beer because Mormonism forbids drinking alcohol.mthe exact same principlemapplies to health insurance.

    Let us say this hobby lobby arguement was legit. Then if your employer was Jehovah's Witness they could argue that their insurance should not cover modern medicine, surgery, or blood transfusions. If your employer we Jewish they could argue that they would not allow for yountomgo to the doctor on Saturdays because y would be violating your employers sabbath. It is a bogus argument being raised by people who are trying to torpedo Obamacare for ideological reasons...or more correctly for reqsons they do not actually understwnd because they have been misled by the bastions of the extremist right.

    January 12, 2013 at 7:44 pm |
    • Chantal

      Your argument does not work. Hobby Lobby is not arguing how their employees spend their paychecks. If they need the morning after pill, they can pay for it out of pocket.

      It would actually be interesting to poll the employees of Hobby Lobby. I have a feeling that you would find that not many are as upset as you would imagine. Why would one work at a religious hobby store if they did not believe in Christianity?

      If you walk into the store, it is obvious from the start that this is a store that supports a Christian point of view. To be honest with you I was surprised that I found Advent candles since that is a Catholic belief and some 'Christians' do not have their facts straight that that is a Christian faith.

      Anyway....paying for alcohol out of your paycheck isn't a good analogy since no one is stopping the employees from paying for the morning after pill or such.

      January 12, 2013 at 7:52 pm |
  13. Johnjon

    I've seen the people who work at Hobby Lobby. they need birth control badly.

    January 12, 2013 at 7:43 pm |
    • barbraS

      Amen to that. Employers should NOT be able to make this decision for you! How unAmerican!

      January 12, 2013 at 7:47 pm |
  14. Dr Right

    I will not shop at Hobby Lobby, And I will not recommend it to anyone for there crafting needs.

    January 12, 2013 at 7:43 pm |
    • Kevin

      I haven't shopped at Hobby Lobby but now I will locate a store nearby and shop there whenever possible.

      January 12, 2013 at 7:57 pm |
  15. Jim

    Can anybody explain how contraception is necessary for health? It is interesting that employers are forced to pay for a lifestyle choice. The body is meant to have children, so having a normal cycle is healthy. Contraception is abnormal. I'm not saying people shouldn't be allowed to use it. I am saying that employers should not have to support a lifestyle choice they personally oppose.

    January 12, 2013 at 7:43 pm |
    • Tearlag

      Well, for one, look up trophoblastic disease. I had this and ended up with cancer just from being pregnant, so that is one reason contraception might be needed for health reasons.

      January 12, 2013 at 7:52 pm |
    • bubba brown

      well, think about this- it will cost less for the employer to provide contraceptive meds than it is for them to provide coverage for the workers new children, benefits for time off, finding extra employees during leave, etc. etc.

      January 12, 2013 at 7:53 pm |
    • Kristin

      Jim, birth control is often used for other medical issues besides the prevention of pregnancy. For example, women who suffer from problems with their menstrual cycles, too heavy or too light (or non-existant but not menopausal) can experience other negative health effects including bone loss, anemia, extreme pain, etc. Other medical problems treated with birth control include endometriosis, polycystic overy syndrome

      January 12, 2013 at 7:55 pm |
    • Sara

      Birth Control is frequently used for purposes other than birth control. You mentioned a normal cycle, however, several women suffer each month from severe bleeding, cramps, and pain due to an abnormal cycle. Often times birth control is prescribed to help regulate their cycles. Other women have hormonal imbalances that cause a variety of symptoms. I am faithfully married with 2 kids and my husband had a vasectomy years ago, however, my doctor recently considered prescribing birth control to help get rid of an ovarian cyst. There was no chance of birth control causing an abortion in my case. Ironically, I would be willing to bet that Hobby Lobby's plan does cover vasectomies. My personal healthcare is not the business of my employer. To me this is just as absurd as if an employer said blood transfusions were against their morals and was therefore not going to cover them under their healthcare plan.

      January 12, 2013 at 8:08 pm |
  16. John

    Hobby lobby's owner/founder is one one of those born again nuts who had used his wealth to further his own agenda, they aren't into just hobbies and lobbies they are training a whole new crop of religious zealouts at the old Bradford college campus in Haverhill Massachusetts.

    January 12, 2013 at 7:42 pm |
  17. BE Hull

    This requirement by Obama says more about the people that want free birth control – you are acting like animals if you cannot control yourself like a human being – might as well be fixed like an animal then – keep your pants on and legs closed – that is free too.

    January 12, 2013 at 7:42 pm |
    • Aaron

      It is the crack that makes them do it. They can't help it!

      January 12, 2013 at 7:43 pm |
    • Matt

      You're an idiot. No offense. Or a lot. I don't really care. You lost your right to an opinion.

      January 12, 2013 at 7:44 pm |
    • Jim

      HaHa

      January 12, 2013 at 7:44 pm |
    • Rational Libertarian

      Who are you who decides who has the right to an opinion? This isn't North Korea Mr. Kim.

      January 12, 2013 at 7:45 pm |
    • Aaron

      Matt- I will gladly take your rift away, wa .

      January 12, 2013 at 7:46 pm |
    • TEHb

      That’s it!

      January 12, 2013 at 7:52 pm |
    • TEHb

      They are not in control of themselves. They are slaves to their sinful nature and want to do what ought not to be and want us to pay for it.

      January 12, 2013 at 7:57 pm |
  18. Aaron

    Good for Hobby Lobby! Great businesses are formed by innovation and by breaking the mold. Obama can try all he wants, but he will continue to carve his path into being the worst President ever.

    January 12, 2013 at 7:41 pm |
    • Thread

      Innovation? Breaking the mould? What is so innovative about a big box chain store that pays crappy wages? Those long predate Hobby Lobby.

      January 12, 2013 at 7:47 pm |
    • Balthazaar

      Sorry to inform you about life here in the reality based community, but Obama is doing a very good job, especially given the knee jerk radicalism of the disloyal opposition. No, Buchanan is still considered the worst president, but dubya will give him a run for his place at the bottom as we dig deeper into how much damage he did,, and for no discernible reasons other than incompetence and a single minded pursuit of a failed ideology. Obama will end up in the top half dozen or so. And for the record, when historians rank the presidents, the only Republicans who ever make it into the top echelon are Teddy Roosevelt and Lincoln. Both of whom would be run out of todays republicon crazy coalition in a heartbeat.

      January 12, 2013 at 7:49 pm |
  19. dsgusted1

    Glad I don't work for them. I'd be searching for another job. What part of separation of church and state doesn't this company get? Ignorant, pushy and out of line. If the owners don't want to use birth control then don't. Otherwise they have NO BUSINESS making this decision for anyone else! If you can't or won't comply with federal regulation then you don't belong in business. Way to go in trying to control what other people do. I'm going to make a point of NOT shopping at this store. They are among the Morons . This issue is more important than millions of people having health insurance that don't currently have it ? What a bunch of selfish people . Go on republicans vote on abortion again with the nation needing bipartisan cooperation! Idiots!

    January 12, 2013 at 7:41 pm |
    • Jim

      I find it odd that you don't think that the separation of church and state applies to federal employees imposing possibly unjust laws on owners.

      January 12, 2013 at 7:46 pm |
    • Truthbetold

      Hobby lobby says it doesn't want to pay for certain types of contraception. Specifically the morning after pill. They believe , like
      millions of others that the use of this pill is for abortions. Before the FDA approved this pill for use in the USA , there were years of arguments as to whether this pill was contraception or something to produce an abortion. Hoppy lobby feels that it is for abortion. This company doesn't say that it will not provide healthcare that includes contraception, it just doesn't want to have to provide the morning after pill.

      January 12, 2013 at 8:07 pm |
  20. Mike

    We have one of these stores in our town and I will now not spend my money there.

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

      I'll make up for your spending.

      January 12, 2013 at 7:47 pm |
    • Righteo

      You do that Jim. Make sure you spend a lot, because $1.3 million a day is going to sink them.

      January 12, 2013 at 7:48 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.