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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. Mack

    Cool. Just found another company to boycott. You blow, Hobby Lobby.

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

      You have a right to boycott. They have a right to exercise their religious views.

      January 12, 2013 at 8:15 pm |
    • edobj

      OK ptneely, then where do the views of the workers fit in? They are denied their rights.

      January 12, 2013 at 8:28 pm |
  2. dtboy

    The first unalienable right mentioned in our declaration is the right to LIFE. The next line states that government's role it to protect rights, which includes the right to life. Therefore, a government that does not protect that right and actually creates a law that forces a company to provide for coverage that may contradict that very right to life is unjust. Thus, this is not just about a religious belief, but a contradiction to our very foundation as a nation.

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

      But what about women using birth control to regulate their hormones – and not for controlling reproduction? Should they also be denied because the drugs can regulate births?

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

      Is that a right to life, liberty and the pursuit of happiness? Seems to me that happiness won over the rights to life. :-(

      January 12, 2013 at 8:16 pm |
    • dtboy

      @Casey – why should the cost of regulating of THEIR hormones be provided by someone else? Insurance was created to mitigate risk. The higher you want that risk insured, the higher premium you pay. The government should stay out of that private transaction, rather than forcing the hand of one side, thus creating winners and losers in the deal.

      January 12, 2013 at 8:17 pm |
    • dtboy

      @lionlylamb – that's why pursuit is in quotes, because there's no right to happiness. It's subjective. If that were the case, I could complain that my right to happiness was infringed upon because Beyonce wouldn't marry me or that someone didn't give me a job.

      January 12, 2013 at 8:19 pm |
    • dtboy

      Sorry – didn't mean to say in quotes, but that's they the word pursuit is there. Because happiness is not a guaranteed right..

      January 12, 2013 at 8:21 pm |
    • edobj

      Um, good. I'm tired of footing the bills for men to get their testosterone HRT and their Viagra, and their freakin midlife crises. Good, I'm glad I have a RELIGIOUS argument against it. Too bad the argument is asinine.

      January 12, 2013 at 8:30 pm |
  3. Rogue351

    It is companies like this. That sell mostly goods made in China, pay their CEO millions and the staff minimum wage. You can not tell me there are but a hand full of people making enough money at these stores to support a family. This is the problem in America, it use to be people, mostly men in the 1950 could go to work at a plant, etc. and make a living that would support a family and even save enough money to help kids get in to collage. Now, even if you are lucky enough to work for a large company the top earners are taking so much that the rest are treated like slaves, regardless of how hard they work or how loyal they are. And the right wants to get rid of Unions, Let the rich have tax breaks, give large companies tax breaks because they FEAR they will move over seas. Greed and fear is what has gripped America. Greed in the sense that one person cannot have enough money ever. And Fear that America is going away because of the liberals. Well it is obvious that the Rights way of running things led us to this point and it is certainly NOT working. But congress and the GOP constantly push back on any change that may in fact change things. America started as an experiment and it has worked out pretty well , times have changed and it is time to start thinking of new ways of doing things that will bring money back to the middle class.

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

      This company increased wages in each of the last 4 years. Contraception pills cost $10/ month and those employees who want them can afford to pay.

      January 12, 2013 at 8:13 pm |
    • Laurie

      Well said!

      January 12, 2013 at 8:39 pm |
  4. FinnGoDo

    Neat, a company thinking it can shove their faith down the throats of those that make $10 hour. It's about as insane as requiring everyone to be Christian that works for you. Boycott Hobby Lobby whether your Christian or not if you believe in your rights as an individual. By not covering specific healthcare that is in line with their faith, Hobby Lobby is telling its employees that you need to conform to their beliefs outside of their workplace if you work for them. It's disgusting

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

      You think their employees make $10/hr.? That's generous of you.

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

      No, You are disgusting. The only ones in this country without rights are the unborn. Only a handful are attempting to stand ;up for them. Hobby Lobby says they will pay the expenses of the mother & child. They would actually save money by paying for the abortion if you think about it. To bad we don't have retro-active abortion, you would be a wonderful candidate. Who would stand up for you? Oh...that's right...Hobby Lobby.

      January 12, 2013 at 8:16 pm |
  5. db

    All federal govrnment employee should be part of the Obama unaffordable care including congress and president. Why are they exempt from the this law.

    January 12, 2013 at 8:07 pm |
  6. john

    They will find anyway possible to amass bigger profits by exploiting their underpaid workes... American's perfect capitalism

    January 12, 2013 at 8:06 pm |
  7. Mike

    Can't speak for employees, but people shopping at Hobby Lobby are not actively making babies

    January 12, 2013 at 8:06 pm |
  8. Casey

    From Hobby Lobby's Web site mission statement: "Providing a return on the owners' investment, sharing the Lord's blessings with our employees, and investing in our community." I guess they're cool with "sharing the Lord's blessings" unless that means giving women control over their own hormones and reproduction.

    January 12, 2013 at 8:06 pm |
  9. Patriot

    Boycott.

    January 12, 2013 at 8:05 pm |
  10. Mike

    Jewish theology has resolved the question of when life begins. Scholars have determined that a fetus is not viable until it graduates from medical school

    January 12, 2013 at 8:05 pm |
  11. The Company You Work For

    It is correct for the religious views of the owners to prevail.

    All women must wear burqas from now on.

    January 12, 2013 at 8:04 pm |
  12. toadfun

    Imagine working for a Scientologist that denies employees their insulin

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

      You are confusing your religions. Scientology would have no problem with that. They might with anti-depressants, but not insulin. Thos of you who hate religion should at least be informed on the subject.

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

      Or a Jehovah's Witness who denies blood tests and transfusions.

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

      Yeppy, JW's allow blood tests though not transfusions. Again, you guys nothing about religion.

      January 12, 2013 at 8:19 pm |
  13. chuck

    So when some fundamentalist-owned business says "we shouldn't have to cover HIV drugs because HIV is a punishment from God" are we all going to defend their religious liberty? What if they say "we aren't going to provide safety equipment for out employees because if God decides it's time for someone's arm to get pulled into a wood-chipper, then who are we to stop it?"

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

      Good points. I'm also very cynical – I'm sure it has nothing to do with the profits and the big salaries of their top people.

      January 12, 2013 at 8:06 pm |
  14. toadfun

    In the American 19th century abortion was considered a birth control option. It wasn't a morality issue, it was purely financial.

    Practicality should move dialogue forward but people are pretty stupid.

    January 12, 2013 at 8:03 pm |
  15. Chris

    Why don't they just follow the law, but send out a daily memo. "If you use birth control, Jesus cries." Make female employees attend weekly seminars on the evils of birth control. This way they can follow the law and keep God happy, then donate the savings to the church.

    January 12, 2013 at 8:02 pm |
    • Laurie Morse

      Why should they follow the law when they can have it both ways? Hypocrites!

      January 12, 2013 at 8:34 pm |
  16. Nathan

    Corporations don't, by definition, have faith. People within them do. And people within them do not have the right to affect the rights of their coworkers in this way.

    It is also disingenuous of Hobby Lobby and its owner to take all the advantages of corporate status, including limiting the owners' personal liability in the event of corporate losses or mismanagement, but then think that it can just pick and choose what what laws to follow on things it doesn't like.

    January 12, 2013 at 8:02 pm |
    • Evi

      Right!

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

      Wrong. Two centuries of case law extend the first amendment to corporations.

      January 12, 2013 at 8:08 pm |
    • Billy D

      @ptneely
      So, if I wound up working for a corporation that had a Jehovah's Witness as CEO, he could deny coverage in the company plan for my life-saving blood transfusion just because he doesn't believe in them?

      January 12, 2013 at 8:13 pm |
    • jolim

      Are you saying that Hobby Lobby doesn't go to corporate heaven if it dies or goes bankrupt? I thought corporations were people!

      January 12, 2013 at 8:14 pm |
    • brett

      yes! Amen, brother.

      January 12, 2013 at 8:19 pm |
    • Nathan

      ptneely:
      Then corporations can use freedom of religion to discriminate? Churches cite freedom of religion to not hire gay employees, for example, so could a corporation? Or not hire single mothers? Or any other article of faith they so choose to set above others when making such decisions. Why do reproduction rights get selectively enforced where other articles of faith do not? Why should a single individual within a corporation be allowed to suppress the rights of others within that corporation (which IS what is happening since the law now guarantees such coverage and the CEO is choosing not to provide it to those who may believe it is morally acceptable simply because he personally does not believe it so).

      January 12, 2013 at 8:27 pm |
  17. mshare

    Well...done with Hobby Lobby. Won't visit that store anymore. Never knew that HL was religiously biased in their ownership. Hobby Lobby should not have the right to decide what is best for a woman's health. it's funny how the ultra right went on and on about 'death panels' in Obamacare and yet companies get to decide what's right for a woman's health? I thought that was between her and her doctor? Talk about a "health panel" deciding what a woman does or does not get in her insurance plan. This should fall under separation of church and state.

    January 12, 2013 at 8:02 pm |
  18. Oliver Cowderey

    Sounds like Hobby Lobby is dictating healthcare, but yet they say Obamacare dictates healthcare.

    HYPOCRITES!

    January 12, 2013 at 8:02 pm |
  19. Good News, Bad News

    The good news is that the religious views of a company must take pre-eminance over it's employees.

    The bad news is that your company is Jewish, and here comes Rabbi Bumblefingers to give you your mandatory circumcision!

    January 12, 2013 at 8:01 pm |
  20. ib42

    This company is in violation of 'the separation of church and state'.

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

      That applies to government. Not private business. Just saying.

      January 12, 2013 at 8:03 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.