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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. Soupchef

    the government cannot be forcing anything down the throat of a company. This action is just a way to force a mandate on everyone regardless of belief. By doing so, this makes the current administration nothing more than a bully, trying to force its way. This is not the way the government was set up by our founding fathers.

    January 12, 2013 at 8:01 pm |
    • war on women

      our founding fathers came to america to escape from religious persecution you fool. if we allow companies to force their beliefs upon its employees how is that any different from a king forcing the people to go to church????? hobby lobby has no right to force their beliefs on their employees!

      January 12, 2013 at 8:04 pm |
    • Matt

      @ war on women: Partially correct. Our Founding Fathers came to America to escape the persecution on how they worshiped god. They didn't come here to start a nation where people could practice whatever they wanted. They came here to practice Puritanism because they felt the Catholic Church and other parts of Christianity were too liberal.

      If you're going to invoke history at least do it right.

      January 12, 2013 at 8:08 pm |
    • war on women

      @Matt. I have the right to worship anything I want or nothing at all. Just as our founding fathers did! I know history and the christians want us to believe that our founding fathers where christian and most where NOT. So you read what ever fairy tale history book you want I will read mine!

      January 12, 2013 at 8:10 pm |
  2. bill davis

    The union have figured a way around it, and so have member of Congress...

    January 12, 2013 at 8:00 pm |
  3. Casey

    Dear Hobby Lobby: iI's cool. I shop at Michael's anyway. They have a better selection, and their name doesn't sound like something my five-year-old dreamt up. Keep clutching your Bible. That's the ticket.

    January 12, 2013 at 8:00 pm |
    • Kurt

      It's great that you have a choice where to shop. Unfortunately the living, yet unborn child does not get the opportunity to choose another womb.

      January 12, 2013 at 8:05 pm |
    • End Religion

      It isn't a child when aborted, and thankfully the mother, who is unarguably alive, does get a choice.

      January 12, 2013 at 8:10 pm |
    • Mick

      Kurt, it's a zygote – a fertilized egg. The Morning After pill does not induce an abortion, it prevents the zygote from implanting in the womb. It's not a "living, yet unborn child", it's a collection of cells.

      January 12, 2013 at 8:38 pm |
    • James PDX

      Actually, it's a single cell organism before it attaches to the womb. 1 single cell. That's the same amount of cells as an amoeba.

      January 12, 2013 at 8:58 pm |
  4. Mike V.

    Ha,... funny,.. loop-holes are good payback,... One thing I think should be made is forcing ALL WELFARE recipients to take and pass a DRUG TEST and CRIMINAL BACKGROUND CHECK the EXACT SAME AS I HAVE TO DO IN ORDER TO MAKE THE MONEY THAT THEY ARE GIVEN..... the people who are law sbiding have nothing to fear,.. the others get rejected just as I would be for a job!!!

    January 12, 2013 at 8:00 pm |
    • Matt

      Uncle Adolf would be proud. He took that EXACT same view. So did the good gentlemen in Salem, Mass.

      January 12, 2013 at 8:02 pm |
    • CR from CA

      It costs more to catch the few that wouldn't qualify than you save from cutting them off. Ask the State of Florida.

      Second, this has nothing to do with the story.

      Third, using capital letters does not make your argument any more convincing.

      January 12, 2013 at 8:04 pm |
    • Louis

      While I completely agree with your statement, unfortunately that's not part of the plan. The plan is for poor people is to just be doled out sub-poverty amounts of money, mainly so they can pay off their drug dealers, who make up the bulk of their inner city economies. Everyone else gets pillaged by the government, and everyone, including the government gets pillaged by the banks and the wealthy elite. Sucks, doesn't it?

      January 12, 2013 at 8:09 pm |
    • AB

      I suppose if we want to waste tax dollars, we would follow your suggestions. The facts do not support your stance, as evidenced by the experience in Florida:

      http://www.nytimes.com/2012/04/18/us/no-savings-found-in-florida-welfare-drug-tests.html?_r=0

      January 12, 2013 at 8:12 pm |
  5. Oh

    Except that abortion is far less expensive than the cost to an insurance company to cover a child's birth and healthcare expenses.

    Don't believe what Hobby Craft or any other company says until they declare they are willing to pay more for their healthcare insurance due to the fact that they have religious objections to abortion and birth control.

    January 12, 2013 at 8:00 pm |
  6. James PDX

    I'm so tired of special exceptions for religions that worship evil deities who kill people en masse, abort all fetuses on the planet by drowning them, damn people to eternal torture, and force women to marry their rapists. They should be branded as demon worshipping cults and forced to follow all laws and pay taxes.

    January 12, 2013 at 8:00 pm |
    • commoncents

      wow...you are not only hate-filled yourself, but completely ignorant about world religions, especially Christianity

      January 12, 2013 at 8:04 pm |
    • James PDX

      That's a nice opinion, commoncents, or would be if you could back it up with facts like I did mine. Please refute any of the points I made. I'll wait.

      January 12, 2013 at 8:16 pm |
    • James PDX

      Seeing as how neither you nor anyone else was able to refute my points, I'd say you owe me an apology for calling me hate-filled and ignorant. I'll probably have to wait for that, too.

      January 12, 2013 at 8:50 pm |
  7. Kate

    Very pathetic organization.. they are antiwoman. Shop at Michaels.

    January 12, 2013 at 7:59 pm |
    • ptneely

      Being anti-abortion is not being anti-woman.

      January 12, 2013 at 8:01 pm |
    • war on women

      insurance should cover women from head to toe just as they do men. to not cover a woman's female organs is omitting a part of her body thus discriminating against her. simple as that! if you don't agree with certain drugs DON'T TAKE THEM!

      January 12, 2013 at 8:07 pm |
    • James PDX

      The Morning After pill is not an abortion, as there is no fetus or even embryo involved. Just a single cell organism much like an amoeba.

      January 12, 2013 at 8:31 pm |
  8. Allie

    So if their religion also believed that women are inferior to men and black people are inferior to white people, would they then be allowed to engage in discriminatory hiring practices? The fact is, when your beliefs are in conflict with the law... the law wins.

    January 12, 2013 at 7:59 pm |
  9. Bob

    My religion prevents me from paying a minimum wage or hiring blacks. Hobby Lobby and I should be allowed to do as we please. Right?

    January 12, 2013 at 7:58 pm |
    • dtboy

      Actually, as your natural right, you should be able to hire/not hire anyone you want, regardless of the reason. It may not be morally right, but its your natural right. There's a difference.

      January 12, 2013 at 8:01 pm |
    • Bob

      Actually, dbagboy, in a civilized society we do not allow minorities from being discriminated against, and we don't allow slave labor. We also don't allow women to be discriminated against by their employer like Hobby Lobby is doing.

      January 12, 2013 at 8:07 pm |
    • Josh

      I'm sure Hobby Lobby isn't so particular in who they take money from. When the chain announces it will no longer serve customers and take payment from anyone who has sinned, then I will think they're true to their Christian ideals. As for their current stand, it's all about their money and politics, not anything to do with religion. So, would it be legal for a company run by a member of the Jehovah's Witness church to say it won't pay for any medical procedure involving blood transfusions since their religion forbids it? If Hobby Lobby wanted to be truly Christian, it would split 100 percent of its profits with the many minimum wage employees who might need an abortion because their company doesn't pay enough for them to raise a family.

      January 12, 2013 at 8:13 pm |
  10. denise

    They have the choice of working for Hobby Lobby or not. If it's important to them to be able to access abortion drugs then work for someone else. It's known that Hobby Lobby is a Christian based company.

    January 12, 2013 at 7:58 pm |
    • war on women

      that is called discrimination. no one in this country has the right to force their beliefs onto someone else through EMPLOYMENT!

      January 12, 2013 at 8:00 pm |
    • Kate

      by abortion drugs they mean the birth control pill. How anti woman is that? pregnant and in the kitchen.. no where in the bible does it say a woman cannot use birth control and I've read it many times. Shop at Michaels.

      January 12, 2013 at 8:00 pm |
    • Oh boy

      Christian based? What does thhat mean, they over charge you for their merchandise in the name of God?

      January 12, 2013 at 8:01 pm |
    • Laurie Morse

      They are CHRISTIAN until their insurance premiums increase because they have to add an additional family member who they will insure for 18 or possibly 26 years!

      January 12, 2013 at 8:11 pm |
    • larper2

      Regular birth control pills is sometimes seen as abortion causing by christian doctors...

      January 12, 2013 at 8:32 pm |
  11. Chris

    If this store was some type of christian store selling religious materials then Hobby lobbies argument would make sense. However as the store is not that, the insurance is paid through the business from monies collected through day to day business. As it is the business paying it and not directly from an individuals funds, there is no violation of someones religious beliefs as a business cannot have a belief, the owners might but two different things.

    January 12, 2013 at 7:57 pm |
  12. God here

    America,you are going to beso sorry you elected the Socialist, Obama.

    January 12, 2013 at 7:56 pm |
    • erwpitewrt

      God sure mangles the English language.

      January 12, 2013 at 7:57 pm |
    • TonyD

      God here? I would never have thought God was an idiot that post
      right wing Fox type comments on the internet. Don't you have a plague or something to conjure up?

      January 12, 2013 at 8:02 pm |
    • Sane Person

      RE-elected you mean. I think we're pretty happy with our choice over that other schmuck. Thanks!

      January 12, 2013 at 8:03 pm |
    • Oh boy

      You wouldn't know what a socialist is if he was standing in front of you, ignorance is bliss

      January 12, 2013 at 8:03 pm |
    • Laurie Morse

      You would have preferred a racist "Hitler" type?

      January 12, 2013 at 8:13 pm |
  13. jvpgh

    I'm sure that none of their underpaid employees using any type of birth control....yea right.

    Seeing as how their stores are full of 'cheap junk from China'...I don't shop there anyway.

    January 12, 2013 at 7:56 pm |
    • jvpgh

      are using

      January 12, 2013 at 7:57 pm |
    • war on women

      I refuse to shop there because they seem to think they can force their beliefs onto their employees!

      January 12, 2013 at 8:01 pm |
  14. Mxh

    How about a company run by a Jehovah's Witness not covering blood transfusions? or a company run by orthodox jews or muslims not allowing their male employees from talking with their female employees? For profit companies are not people and their is no such thing as limiting their freedom of religion. You can't force your employees to live their lives like you do.

    January 12, 2013 at 7:56 pm |
  15. JP

    Lay off few employees to cover for the losses in IRS fines. Obamacare, mother of all job killers

    January 12, 2013 at 7:55 pm |
    • Common sensemom

      Get an education so you don't have to get a job. Get a career.

      January 12, 2013 at 7:58 pm |
    • Kate

      Please go back to what planet you were conceived from.. never to be heard from again. Obama care is a job killer. what a baseless remark.

      January 12, 2013 at 8:02 pm |
    • Oh boy

      the fox news suckers are out tonight

      January 12, 2013 at 8:09 pm |
  16. Topdecker

    Stupid jesus freaks, I hope they get fined for a billion dollars and go out of business.

    January 12, 2013 at 7:55 pm |
    • Laurie Morse

      I totally agree!

      January 12, 2013 at 8:15 pm |
  17. Dann DFW

    So much for giving unto Ceaser what is Ceaser's. I guess that part of the New Testament was added inadvertently. I can respect paying a fine rather than complying in order to stand up for your principles as the law allows for that, but to avoid it altogether by violating another supposed principle helps show the true colors.

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

      Everything that the government has comes from the people, so you can't "give" to government that which it never had in the 1st place.

      January 12, 2013 at 7:59 pm |
  18. Ibrahim bin al-Islam

    Hobby Lobby seems to be one of what used to be called holy roller organizations. What business is it of their's if an employee chooses to use contraceptives? No doubt the owners of Hobby Lobby support the death penalty.

    January 12, 2013 at 7:55 pm |
  19. billy

    What people need to understand is if the fed can tax you for not providing abortions to other people they can tax you for not going to church or owning a gun or owning a boat or etc. Personally I think any one who doesn't attend church should should be taxed at 90 percent

    January 12, 2013 at 7:55 pm |
    • Dann DFW

      Does it have to be a government approved church?

      January 12, 2013 at 7:56 pm |
    • Matt

      lol @ taxing for owning a gun or not going to church. This country is in such a nosedive when people like that have the same voting rights as those of us with an elementary education.

      January 12, 2013 at 8:00 pm |
    • taffylinden

      So much for separation of church and state.

      January 12, 2013 at 8:01 pm |
    • Kate

      sure billy boy and I think churches should be taxes at 90% so there you go.. we all pay our taxes.

      January 12, 2013 at 8:03 pm |
    • KKKKKatie

      Because I don't go to church, I should be taxed at 90%? You and people that think like you are the reason religious organizatoins lose footing each year in American. This is still a free country – last time I checked. I don't have to go to church. Ever heard of separation of church and state? Like most Christians who claim they don't judge you are doing just that.

      January 12, 2013 at 8:05 pm |
  20. mlblogscbgoldsmith

    I vote with my wallet by boycotting Hobby Lobby. The owner has every right to treat his female employees like chattel, just as I have the right to get my picture framing done elsewhere.

    January 12, 2013 at 7:54 pm |
    • viper64a

      They are not treating their women like chattel. I have to assume that you want the government to dictate to you everything that you do. The obamacare law is costing every one more money. To put in contraception coverage is stupid. It makes other people have to pay for some people that cannot afford the few dollars to buy a box of condoms wal-mart.

      January 12, 2013 at 8:07 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.