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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. John Capt

    The U.S. isn't a place to have a big business anymore, not in this "blame the rich" environment. Hobby Lobby was doing its employees, communities, cities a SERVICE by making a profit, growing and expanding its business. It offers thousands of people jobs and a way to make a living. Now the government is basically giving them the finger (as with every other business).

    If I owned Hobby Lobby I'd find every loophole possible to stand up for what I believe in or shut it down, fire my employees and sit on all my money I just made.

    January 12, 2013 at 8:52 pm |
    • Rational Libertarian

      Very true.

      January 12, 2013 at 8:53 pm |
    • MarkinFL

      This has nothing to do with profitability. This has to do with companies believing that they only have to follow the laws that they feel like. There are MANY rules companies have to follow everyday. If their religion said hiring black or female employees was a sin, should they be exempt from EEOC laws? This is no different.
      Let them render unto Caesar and get on with life already.

      January 12, 2013 at 8:59 pm |
  2. Reason

    Its all good. The youth of this country is less and less tolerant for Christianity and its lies and control. These people running such countries are a dying breed.
    By the way, why dont churches start paying taxes if the people want to alter government policies based on religious beliefs?

    Mark it on the list of where I will never shop again.

    January 12, 2013 at 8:51 pm |
    • tims

      Hay Reason they don't need you.Your thinking is like cement all mixed up and permently set.Happy holyday yours is april 1 fools day.Have a nice day

      January 12, 2013 at 9:21 pm |
  3. Mister

    So, aren't they open on the Sabbath? Don't they take money from others for profit? How exactly are they following the word of the Lord? Here's an idea. If they want the same exemptions as non-profits, then they can file to be a non-profit. But I'm guessing they won't do that. PRAISE THE LORD!

    January 12, 2013 at 8:51 pm |
    • Reason

      typical religious – cherry pick the rules that you WANT to follow.

      January 12, 2013 at 8:52 pm |
  4. BPAUL

    Why is everyone so much in a rush to defend employee abortion benefits? The article is very clever in its wording of "certain types of birth control" and the associated spin is such that you'd think Hobby Lobby folks are freaks. I find it amusing that the same people who tend to be animal rights activists are also pro-abortion, and that's just where the hypocrisy begins.... What I've learned about the liberal mind-set is that, despite their creed to sacrifice self for the community, every principal they espouse is love of self over others. Making forms of abortion legal is one step, and the next is taking any financial obligation out of irresponsibility (and making employers, i.e. all of us) pay for it.

    January 12, 2013 at 8:51 pm |
    • Mister

      Thank you for that deep analysis of the liberal mind-set. What I find quite funny about the conservative mind-set is that you want the government to stay out of every aspect of your life...well...except for abortion, civil rights, and anything that would infringe on your right to push Jesus onto everyone else. So, tell me again about liberal hypocrisy?

      January 12, 2013 at 8:54 pm |
    • tims

      Yes Bpaul they don't want a murderer executed but it's ok to murder a baby.Then they want everyone else to pay pathitic.

      January 12, 2013 at 9:36 pm |
  5. Mashed Potato Bulletin

    "Hobby Lobby does not provide coverage for abortion-inducing drugs in its health care plan."

    So the company doesn't want to be subjected to the government telling IT what to do but the company has no moral objections trying to dictate how its EMPLOYEES how to live thier lives.

    January 12, 2013 at 8:51 pm |
    • ptneely

      They are not telling their employees what to do or not to do. You don't infringe on anyone's rights by refusing to pay for them to exercise that right.

      January 12, 2013 at 8:55 pm |
      • Mashed Potato Bulletin

        You most certainly do when the option is not given based on a narrow religious-based view. AND provisions are made that employees can bear the whole cost even though the pill's coverage in in the plan.

        This company is simply trying to dictate what others can do while complaining about the government doing the very same thing to them.

        Smells like blatant hypocrisy to me

        January 12, 2013 at 8:58 pm |
    • kissy

      Employees can pay for their own murder.

      January 12, 2013 at 8:58 pm |
  6. carol

    Way to go Hobby Lobby! – I will continue to shop at your stores and since this is America I have the right to do so and others have the right to not shop there....enough said. I love America and its freedoms!

    January 12, 2013 at 8:50 pm |
    • Rational Libertarian

      Very well said.

      January 12, 2013 at 8:52 pm |
    • Cacherdo

      Whose freedom are you celebrating exactly? The freedom of those who agree with your beliefs? How about the freedom to disagree? I don't understand how people can support Hobby Lobby's idea of religious freedom – freedom to impose their religious views on others.

      January 12, 2013 at 8:53 pm |
  7. jim4peace2012

    Would Hobby Lobby join in the stoning of women who aren't virgins on their wedding night ? Would they also force virgin women to marry their rapists ? Those are biblical principles too.

    January 12, 2013 at 8:50 pm |
    • ptneely

      non sequitur.

      January 12, 2013 at 8:56 pm |
    • Dennis

      Where is that in the bible Jim? Can you give me chapter and verse please?

      January 12, 2013 at 8:58 pm |
    • End Religion

      dennis, you've heard of this cool thing called google, eh?

      January 12, 2013 at 9:06 pm |
    • tims

      You must be talking about muslin.

      January 12, 2013 at 9:41 pm |
  8. Kiki

    Emergency contraception does not cause abortion so their whole case is built on a lie.

    January 12, 2013 at 8:50 pm |
    • Theo

      Since when do religious people make sense or say things that are factual ?

      January 12, 2013 at 8:50 pm |
    • Reason

      your first mistake is expecting Christians to bother to know anything about the world around them before making rules about it.

      January 12, 2013 at 8:54 pm |
  9. sparky

    squeeze the cash from these self rightious religious c@cksuckers

    January 12, 2013 at 8:50 pm |
    • tims

      Sparky what makes you so unhappy and mean maybe it's your diet.Never let your mind wonder it's to small to be on it's own.

      January 12, 2013 at 9:48 pm |
  10. Theo

    does anyone ever think why religions want you to be fruitful and multiply ?

    1) if your brainwashed your offspring will be to ( more $$ and power for that religion )
    2) massing more people then the enemy is a way to win

    3) couldn't a god just wave his magic hand and make this happen w/o having to play stratego with people ?

    January 12, 2013 at 8:49 pm |
  11. Reason

    Im sure Bob will be happy paying for the child's parents government support for the REST OF HIS LIFE. And the healthcare when the unwanted child has horrible parents that dont care for the child's medical needs properly. Oh whats that Bob? Not willing to do that either? Why dont you go move to a country where everyone is truly on their own.

    January 12, 2013 at 8:48 pm |

    • What about Bob?

      January 12, 2013 at 8:49 pm |
    • billy

      I don't know where this reply goes to, but I agree. lol.

      January 12, 2013 at 8:50 pm |
    • Reason

      I hit reply to Bob – dont know why it doesnt work. Bob doesnt want to pay for other peoples birth control.

      January 12, 2013 at 8:56 pm |
    • tims

      That same kid could become pres.One good point you make is if we had at will abortions Obama would not be pres.

      January 12, 2013 at 9:11 pm |
  12. Lisa

    They're a business, not a church. And anyone who believes this is about anything other than money is a complete fool.

    January 12, 2013 at 8:46 pm |
    • ptneely

      You make zero sense. They are willing to incur over a million dollars in fines each day. THis is not about money to Hobby Lobby. The actual costs that they would incur by this rule is negligible.

      January 12, 2013 at 8:57 pm |
    • Astounded

      You have got to be kidding me! Do math often? How often do you take abortion inducing drugs? I am going to guess it is very rarely. Adhering to the requirement would probably cost them a few dollars per year per employee.
      Staying closed on Sunday probably costs them a billion dollars a year. Billion! Get it? If it was only about money, why would they forgo that cash? Unbelievable.

      January 12, 2013 at 9:01 pm |
  13. bob

    All I keep hearing is for the government to keep their hands off my body. Since my money is part of my rights since it is propoerty, why should the government tell a private company what type of insurance coverage they have to provide. A private company is differnt from a company.

    January 12, 2013 at 8:46 pm |
    • Scott

      Because companies don't get to dictate their religious views to their employees, and that's the way it is so long as we're going to have a health care system in which insurance coverage is overwhelmingly provided via employment.

      January 12, 2013 at 8:49 pm |
    • Bill

      You really want your company telling you what medical proceedures you can and cannot have? Bad idea. You don't know that the company doens not own the insurance: it is part of the employees' pay package, their property earned by their labor?

      January 12, 2013 at 8:50 pm |
    • Amanda

      Right, because allowing a private company to tell its employees what they can and can't do with their bodies is a better idea? They are a business not a church, and they have NO business telling people what they can and can't have access to in terms of their health care.

      January 12, 2013 at 8:54 pm |
  14. Sharp

    Another right wing creep corporation hiding behind so called principles when all they are doing is forcing their religion on their employees, saving money & giving themselves as a tool to try yet another cheap attempt to break Obamacare. If they really believe in their position they need to just pay the fine. I guess paying their fine violates their religion too.

    January 12, 2013 at 8:45 pm |
    • bob

      It is not against the law if what they did was within the law. They found a loophole while they are waiting for a hearing to occur.

      January 12, 2013 at 8:49 pm |
    • tims

      Sharp as a rock I bet you dont pay taxes.If you are hell bint on abortion then you pay or are you just another winer.

      January 12, 2013 at 10:00 pm |
    • Sharp

      tims; All you can come up with is dirtbag name calling & I'm supposed to be the dumb one?

      January 12, 2013 at 10:47 pm |
  15. biotech4life

    Hobby Lobby = Corporate Crooks

    January 12, 2013 at 8:45 pm |
  16. Zobit

    God is as real as Santa Clause and aborted babies should be used for stem cell research.

    January 12, 2013 at 8:45 pm |
    • Rational Libertarian

      True. I believe stem cell research is critical to medical research.

      January 12, 2013 at 8:49 pm |
    • Sharp

      They don't even need aborted fetus to do stem cell research anymore.

      January 12, 2013 at 10:45 pm |
  17. ruralite

    You can believe what you want but you can't force your beliefs on your employees. Employers in America have a certain responsibility to keep a level playing field for all Americans they hire. Jewish, Christian, Atheist, Budist or Muslim. Even though they are used to picking and choosing what biblical verses they live their life by. You can't pick and choose what laws your going to obey and who your going to discriminate against.

    January 12, 2013 at 8:45 pm |
    • ptneely

      They are not telling their employees what to do or not to do. You don't infringe on anyone's rights by refusing to pay for them to exercise that right.

      January 12, 2013 at 8:58 pm |
  18. Abortion Drug?

    How about looking at another angle here.

    Please tell me the name of this so called abortion drug. No one has named it. If they are talking about Plan-B then they are just using strong language to make the drug seem more nefarious than it is. Plan-B DOES NOT cause abortions. If a woman is already pregnant, It won't terminate the pregnancy. What it does do is prevent an egg from attaching to the lining of the uterus and begining gestation. So it is emergency contraception, not an abortion.

    Regardless, the coorporation should let their employees have their own "free-agency," just like god supposedly called for. Follow the law. If they choose not to, they can pay the penalties. The decision of which health-care to seek or not seek lies with their employess, not their executives.

    The constant irony of the "Christian" Right is nauseating. They "care" about everyone just like Jesus preached until they actually have to spend a dollar to help someone who is different than them.

    January 12, 2013 at 8:44 pm |
    • Kiki

      It appears upon further study that it prevents ovulation not that it inhibits implantation.

      January 12, 2013 at 8:52 pm |
    • ptneely

      RU-486 causes an abortion. It is not "the pill".

      January 12, 2013 at 8:59 pm |
    • Kiki

      They are fighting Plan B which is not an abortive but emergency contraception. It is not the same as RU486

      January 12, 2013 at 9:08 pm |
  19. eric

    or they could just fire all their women employees...

    January 12, 2013 at 8:43 pm |
  20. hal 9001

    Since "God" is an element of mythology, I would recommend that Hobby Lobby let X = X.

    [youtube=http://www.youtube.com/watch?v=gZuWIisz2fM&w=640&h=390]

    January 12, 2013 at 8:43 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.