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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. Kweso

    You sell toys. Toys are images and your bible says you shall not make any graven images. Children worship those graven images. So you only abide by the bible when it comes to your bottom line.

    January 12, 2013 at 8:15 pm |
  2. 2tired2care

    Hobby Lobby can suck my "f"ing salami.

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

      Qu33r

      January 12, 2013 at 8:17 pm |
  3. Spotimom

    Prescriptions are prescribed from doctor to patient and no employer should be able to say whether or not someone can take that prescription. Just like insurance companies shouldn't be allowed to over ride the doctor recommendations. I have shopped at Hobby Lobby and I'm a Christian and I think it is ridiculous that they think they can tell their employees that they will not cover any prescription if they have insurance and they have a doctor prescribing it. If you don't like the law, pay your fine and go under. That's your own stupid business sense. Follow the law, save your business, give people jobs and you can preach to them all you want. If your employees don't want meds, they certainly don't have to take them! You are not forcing them to take the pill!

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

      Using your logic, Rosa Parks is a criminal for not going to the back of the bus since that was the law.

      January 12, 2013 at 8:27 pm |
    • edobj

      Excellent points. I agree, doctors and patients should have the say, not businesses and insurance giants.

      January 12, 2013 at 8:32 pm |
  4. nbgb

    I will never shop at Hobby Lobby again. Who do they think they are to defy the law for religious beliefs? It's time to tax churches. I am sick and tired of these people shoving their religion down my throat.

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

      Don't shop there, then. WOW, you really showed them!

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

      You don't have to shop there or work there. How is choosing to run your business according to your own beliefs shoving those beliefs down someone else's throat?

      January 12, 2013 at 8:30 pm |
    • edobj

      Well, nabob, it's forcing their employees to exist under their idea of insurance. Thank God they are not against insulin, organ transplants and whatever else various cults worship.

      January 12, 2013 at 8:33 pm |
    • Nabob

      And why is that so wrong? Work somewhere else. You know what your employer believes and have a choice of where to work. The Green family took the risks and built the company – they should be allowed to run it how they wish. Further, this is a bit deeper than many other beliefs in that it is a question of being forced to violate your conscience by participating in the death of another human being. You may not feel that the morning after pill is taking a life but the Greens do.

      Imagine you lived during the slavery era in the US and your government required you to keep a loaded weapon available in the event that one of your employees wanted to kill an unwanted slave. You personally believe slaves are human beings with intrinsic worth but the government defines this person differently and can now force you to provide a means to end that slave's life by someone else's hands. Is that right?

      January 12, 2013 at 8:47 pm |
  5. happyfrenchman

    The owner of Hobby Lobby does not have the right to cherry pick, based on his religious beliefs, what his employees can access with their health insurance... what if he were a Jehovah Witness...What if he was some kind of Muslim or Jew, and decided no Ham sandwiches in the break room... This is politics. And I hope it costs Hobby Lobby but if they go under, the employees will be the ones who suffer. It is Chick Fil A all over again... and I have found another Chicken place that is just as good... Zaxby has got quite a bit of business thanks to this.... I am sure some intentionally go to Chick Fil A for the same reasons...

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

      Your examples are silly. It is more accurate to compare this to the Jewish or Muslim company being required to provide ham for lunch just because some employees may want ham instead of beef.

      January 12, 2013 at 8:37 pm |
    • Dude

      Nabob: Wrong.
      Using your silly example this would be if employers were required to provide lunch money to employees and the restaurant they eat at served ham and a Jewish employer refused to allow the restaurant to serve them ham. Stupid, right?

      January 13, 2013 at 9:21 am |
  6. DN

    How is this an infringement on the corporation's religious freedom? No one is forcing anyone to take any medications. However, the company is dictating it's religious beliefs upon it's employees, so, really, Hobby Lobby is violating the religious beliefs of any of it's employees who want the medication.

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

      Dictating? They simply won't pay for it- that's their right as a PRIVATE company. What if the government forced a kosher Jewish restaurant to serve non-kosher food under the health law because they feel its healthier to have those options for everyone? You're defending government intrusion

      January 12, 2013 at 8:18 pm |
  7. KlintzCNN

    Simple solution–don't provide healthcare coverage as an employee benefit.

    The individual person will be forced to buy their own healthcare package–and be FINED themselves for not having any.

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

    I'll never shop at this extremist nightmare again in my life. F@#$ YOU, HOBBY LOBBY!!

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

      How is this in your life. You are the one trying to impose your views on the live's of the owners.

      January 12, 2013 at 8:13 pm |
    • Cottage Industy

      You never shopped there before you POS.

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

      No we're not trying to impose our views on anyone. Hobby Lobby, a for profit business, is imposing it's views on it's employees. We're trying to ensure everyone has the freedom to believe what they want.

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

      Doofus, wrong. Employess can do whatever they want with their money. No one has the right to tell the owners of the company that they are required to spend their money in a way that violates their religion. And yes, US Case law extends individual first amendment rights to companies.

      January 12, 2013 at 8:22 pm |
  9. Eli Cabelly

    Hobby Lobby is trying to maintain their religious values? Are they a church now? Do they hold some religious place in the community?

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

      Makes no difference. Your religious views extend to any business you create.

      January 12, 2013 at 8:14 pm |
  10. fedup

    Hats off to Hobby Lobby and Mardel!!!!

    January 12, 2013 at 8:12 pm |
  11. doofus

    Funny how all the religious people are claiming Obamacare is oppressing freedom of religion when Hobby Lobby is the one who's actually forcing religious beliefs on anyone. Obamacare isn't forcing anyone to go out and get contraceptives and it's not forcing anyone to take them. It's ensuring a for profit business isn't forcing it's leader's religious beliefs on it's employees. How would you Christians like it if your Jewish boss told you that you could no longer worship Jesus because they don't believe he's the son of God? You're only siding with Hobby Lobby because they happen to believe the same thing you do. If they were a Muslim organization oppressing Christians you'd be outraged. Instead, it's a Christian organization oppressing. If the staff is so religious, they won't take prescribed birth control. No one is forcing them to do so. All the government is trying to do is ensure people have the FREEDOM OF CHOICE to do with their lives as they see fit.

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

      Wrong Again! HL is not telling anyone what to do or not to do. They are merely asking that they not be told what to do (buy abortion inducing medication).

      January 12, 2013 at 8:24 pm |
    • Laurie

      ptneely….Hobby Lobby, like most Christians are hypocrites…We have lost sight of the real issue…all business are in business to make money (increase shareholder equity) They are not arguing against RU-486, they are trying to get out of paying their share…Like most of the greedy 2% of Americans.

      January 12, 2013 at 8:55 pm |
  12. gdouglaso

    Look, as long as they are up front about these things when they hire employees, I do not see the big issue - if, over time, their views are not sustainable with respect to their employees or their clientele they will go out of business. People are not forced to work for part time (and not get benefits) or on contract (and not get benefits)...so it hardly seems that all companies are forced at present to provide benefits to all at present. Can we get a little less government in business?

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

      Yet in so many other discussions people say "Take whatever job you can and get off wellfare." Not every has a resume stacked full of awesome, and many take whatever job they can. Should their choices be stiffled because the for profit business' leader believes one thing or another?

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

      doofus – why do you think these businesses are required to provide you with "choices"? They provide jobs. You can use your income from this job to support whatever lifestyle is legally available to you. When you start your own company and employee people, feel free to voluntarily provide whatever you wish to them.

      January 12, 2013 at 8:54 pm |
  13. anagram_kid

    If they really had such strong feelings they would say that they do not want any customers who use BC. They would be bankrupt in a few months.

    January 12, 2013 at 8:11 pm |
  14. GJ

    securing their religious liberty but then taking liberties away from others... Great christians.. two faced biggots

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

      No one is taking libert away from the employees. They can pay for whatever they want. Think before you speak.

      January 12, 2013 at 8:32 pm |
  15. Hobby Lobby

    We have instituted mandatory "pray the gay away" treatment for all LGBT employees. Our religious rights must not be trampled.

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

      At like $1,000 dollars an hour per session per employee? Yeah right. They'd just fire them.

      January 12, 2013 at 8:11 pm |
    • Cottage Industy

      If you have to make things up to make your point, you are just a liar.

      January 12, 2013 at 8:13 pm |
    • Hobby Lobby

      Yes, we have decided to "fire" them in accordance with Christian heritage and tradition, on a stake.

      January 12, 2013 at 8:13 pm |
    • Cottage Industry

      I am stupid and humorless. You know, a Christian.

      January 12, 2013 at 8:14 pm |
  16. toto

    Drugs don't abort babies...people abort babies.

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

      Do the babis have guns?

      January 12, 2013 at 8:10 pm |
  17. Courtney

    I wonder if Hobby Lobby is still willing to take any tax breaks given to them as a large corporation, or if they only wish to follow the law when it suits them. Furthermore, birth control is not abortion, it prevents conception....Not to mention all the other health issues it can resolve for a woman (headaches/migraines during a woman's period), acne, severe cramping, and for women with PCOS, it simply gives them a regular period....but...hobby lobby doesn't care about those facts do they?

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

      They are not arguing against birth control. They are arguing against RU-486 which is merely an abortifactant prescribed for use outside a clinic/hospital.

      January 12, 2013 at 8:10 pm |
  18. Gordon Burnet

    Who cares about this store anyway, never heard of them, I am sure they prey on how to make money!

    January 12, 2013 at 8:08 pm |
  19. FinnGoDo

    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 8:08 pm |
  20. Sane Person

    Hope some sharia muslim consortium doesnt buy your company and decide women must wear burqas and everyone must pray 5 times a day. Christians love thier fabled religious laws, as long as its thier religious law and no one elses.

    January 12, 2013 at 8:08 pm |
    • Mohel Rabbi Chaim Fumblefingers

      I am here for your mandatory circumcision! The owners are Jews!

      January 12, 2013 at 8:12 pm |
    • Cottage Industy

      You have them mixed up with Al Gore.

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

      Except they aren't mandating anything other than you pay for your own morning after pill. But I guess it sounds better to say things like "force you to wear a burqa"

      January 12, 2013 at 9:01 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.