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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. Brenden

    This isn't just a religious question, but a moral question. And the lack of outrage over such an issue just shows our moral bankruptcy. When we discard and destroy the weakest form of our fellow humans, instead of treating them with concern and care, we violate our own humanity and create cause for our own damnation.

    January 12, 2013 at 9:13 pm |
    • Tom, Tom, the Piper's Son

      How is preventing pregnancy harming anyone?

      January 12, 2013 at 9:19 pm |
    • Karen A

      discard and destroy?! by preventing unwanted pregnancies? what about those that have children they can't or don't want to care for...and abuse them or let them run rampant upon society because they don't care what they are doing, as long as they aren't bothering THEM...THAT is what you should be outraged about! THAT is what is morally wrong...but preventing a pregnancy and not bringing an unwanted child into the world, into a life of suffering, THAT is what you think is wrong? really?! give your head a shake!

      January 12, 2013 at 9:27 pm |
    • panorain

      You are so right. The company should not get involved in their employee's medical problems. They should just pay them enough to buy Obamacare on their own.

      January 12, 2013 at 9:30 pm |
  2. Kilgore Trout

    If it was a Saudi owned company George W would be clamoring for special tax breaks for his puppet master handlers.

    January 12, 2013 at 9:12 pm |
    • southernsugar

      W is an airhead.

      January 12, 2013 at 9:14 pm |
  3. RD

    So, we can't be exempt on religious grounds, but we can be exempt from Obamacare if we are the United Auto Workers, the Teamsters, Plumbers and Pipefitters, IBEW, United Food and Commercial Workers, etc, etc, (not that any of these organizations have large PAC's that just happened to donate a gazillion dollars to Obama).

    January 12, 2013 at 9:10 pm |
    • Brud1

      The organizations you identify are all complying with Obama care and are happy to do so. The only way we'll get medical costs down in this country is by providing comprehensive coverage to all citizens, and to ultimately transition to a single payor program.

      January 12, 2013 at 9:15 pm |
    • Karen A

      please provide irreputable evidence to support your claims...or is this just you repeating what a bunch of your like minded friends are yapping about and circulating via email...allegations with no valid evidential support...because they personally don't like Obama

      January 12, 2013 at 9:19 pm |
    • Karen A

      that was directed at RD, btw...Brud1, you are SO right! it works in Canada, and Americans are always insinuating they are the best in the world, better than everyone else...why then why don't their citizens all have equal access to healthcare? If Canada can do it. why can't the USA?! if they're so much more powerful and more advanced and all ;)

      January 12, 2013 at 9:23 pm |
    • Rina

      Puh-leeeeze. Spare me the BS! They sell products that they import from China – a country with some of the worst human rights abuses on the planet. They have no problem with "values" when it comes to screwing those people over. There is also no "values" at play when they are purposefully skirting the LAW. When churches start paying taxes like everyone else, they can have a voice. Until then, STFU.

      January 12, 2013 at 9:40 pm |
    • Karen A

      Rina....EXACTLY!! I have looked at website of vendors in China that sell the SAME...and I mean EXACT SAME....products that Hobby Lobby is selling...because that is where HL is getting their stuff from...only you can buy 100 of something for the same price you buy ONE of the item at HL...why charge $7 for something you paid less than a nickel for...that's corporate greed, not morally religious people trying to do the right thing...doing the right thing would be making a profit on it without pricing gouging...most people have no idea how little they are paying for these products...IN CHINA..NOT in the USA! if they are so moral, why aren't they supporting the country they live in, the country they are asking to give them their religious freedom, instead of keeping business in China afloat?!

      January 12, 2013 at 9:47 pm |
  4. southernsugar

    Rears your children properly and you won't have to worry about such measures. I hope Hobby Lobby is taken to the cleaners in taxes of all manners. They can't and shouldn't impose their own laws. They are not a non-profit business.

    January 12, 2013 at 9:10 pm |
    • rterjrg

      They will be non-profit when that fine hits them. They will be non-existant if they don't obey the law.

      January 12, 2013 at 9:13 pm |
    • southernsugar

      An excise tax is imposed on non-essential goods. How does an excise tax fit into this?

      January 12, 2013 at 9:16 pm |
    • panorain

      They should reduce their entire work force to part-time so they don't have to provide any medical coverage at all. Alternately they can just eliminate coverage and pay the $2000 fine per employee per year and tell them to get their own Obamacare.

      January 12, 2013 at 9:17 pm |
  5. don't do crazy things

    More Catholics go to heaven than any other group.

    The Muslims have to get their virgins somewhere.

    January 12, 2013 at 9:10 pm |
    • southernsugar

      Find a religion. You won't find the need to make such silly comments.

      January 12, 2013 at 9:12 pm |
    • don't do crazy things

      Silly is fun

      You should try it. Unless the Pope says you can't. If you are going to appoint the man to do your thinking for you I guess you are stuck with it.

      January 12, 2013 at 9:16 pm |
    • rad666

      southernsugar

      Find a religion.
      ==================================
      How does one choose? There are so many with a god of their own.

      Any have a woman as their savior?

      January 12, 2013 at 9:19 pm |
    • don't do crazy things

      The silliest part is the concept of Catholic virgin.

      That is almost an oxymoron.

      January 12, 2013 at 9:21 pm |
  6. Zobit

    God and Santa Clause are interchangeable, and both as believable.

    January 12, 2013 at 9:09 pm |
    • Z

      in about 200 years, you will be fictional too. Someone can makeup all about you.

      January 12, 2013 at 9:17 pm |
  7. Eric

    This is stupid. A BUSINESS can not claim for religious beliefs. A church yes, a business no. Shut em down with fines then.

    January 12, 2013 at 9:09 pm |
    • rad666

      Reverse the roles.

      Don't tax businesses?

      And tax the churches?

      January 12, 2013 at 9:11 pm |
  8. rad666

    Force the churches to do it also.

    They are BIG businesses.

    January 12, 2013 at 9:09 pm |
    • RD

      And big unions aren't?

      January 12, 2013 at 9:17 pm |
    • Z

      really? you seen the books, do you know how many third world country these missionaries has provided? Have you check World Vision, World Impact, Hope Mission, where more than 90% of the fund goes out to the needy? Let me ask you, what have you done to help others? To love others as yourself? Read up on someone name Jesus Christ, and what He has done for you and me?

      January 12, 2013 at 9:20 pm |
    • Zman

      Time to end tax exempt status for religious organizations. Representation without taxation needs to end.

      January 12, 2013 at 9:27 pm |
  9. CNNTom

    Looks like the nominating Sonia Sotomayor is already paying dividends as she returns the favor.

    January 12, 2013 at 9:09 pm |
  10. Jew-owned business

    CIRCUMCISIONS FOR EVERYBODY!

    It is our right to use our business to impose our beliefs on our employees.

    January 12, 2013 at 9:07 pm |
    • Rational Libertarian

      If you want everybody who works in your store to be circ.umcized then that's your decision. Nobody is imposing anything.

      January 12, 2013 at 9:10 pm |
  11. James PDX

    Hobby Lobby pays their employees wages and some of their employees may choose to use that money from Hobby Lobby to pay for the Morning After pill. Part of their compensation package also includes providing their employees with comprehensive healthcare coverage which employees can also choose to use to get a Morning After pill. There really is no difference except that Hobby Lobby's way means their employees get less health coverage for the same amount of money and then have to spend more of their wages to pay for a $200 pill. Effectively, what they are doing is monetarily punishing their employees for not following the company founder's faith. That is both wrong and un-American.

    January 12, 2013 at 9:07 pm |
  12. Chimezie

    Can a business or insurance company refuse to cover blood transfusion or organ transplantation based on religious grounds? I think there will be an uproar if this happened. These same "religious" companies are open seven days a week without observing the Sabbath!

    Can a Waiter or Cook at a restaurant refuse to serve you seafood (shrimp et c) based on religious grounds? We have to think hard before carrying the placard of religion.

    January 12, 2013 at 9:06 pm |
    • Rational Libertarian

      If it's stipulated in the contract then they should be allowed to deny covering those procedures.

      January 12, 2013 at 9:08 pm |
    • Fact

      First off if a waiter or cook was not allowed to serve seafood because of their religion, just have Someone else do it. What a concept. (If there is such a religion). And Hobby Lobby is not open seven days a week. Guess which day they're closed?

      January 12, 2013 at 9:11 pm |
    • claiparker

      Actually Hobby Lobby is not open on Sunday's!

      January 12, 2013 at 9:16 pm |
  13. Non Christians

    I guess what this means to non christians is that they need not apply for a job at Hobby Lobby as the Boss who is a christian will not ALLOW you or your Family to have the helath care that the Gov want sto provide to every citizen. I feel thats a racist corporate policy. If the Boss wants to belive that he can on his own PERSONAL hleath care plan but not push his religion on non christians or chrisstians who are PROGRESSIVE !

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

      Racist? This is about religion.

      January 12, 2013 at 9:10 pm |
    • Cam Spurgeon

      Stop shopping there. They are hypocritical idiots who don't give a hoot about their employees.

      January 12, 2013 at 9:11 pm |
  14. AlienShark

    Do you realize how many "debaters" in the CNN forum are really shills working in boiler rooms taking all their talking points and arguments from papers their boss gave them. A quick google search will shed some light on this little known but very lucrative business.

    http://consciouslifenews .com/paid-internet-shill-shadowy-groups-manipulate-internet-opinion-debate/1147073/

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

      American Atheists pays good.

      January 12, 2013 at 9:08 pm |
    • AlienShark

      it is pretty easy to see my debate history that I am no chump. I figure if I leave enough of these calling cards on this forum someone will get at me about a position.

      January 12, 2013 at 9:12 pm |
    • ptneely

      Is that really true? I have heard it rumored, but always thought it was just talk..

      January 12, 2013 at 9:16 pm |
    • AlienShark

      huge business

      January 12, 2013 at 9:17 pm |
    • End Religion

      While I don't doubt some are paid to post comments, there is nothing shadowy about it. It is just more marketing. You've heard of "commercials" where actors pretend to love a product, yes? The article sounds fake to me.

      January 12, 2013 at 9:22 pm |
    • AlienShark

      the article is real, my man. You probably walk around thinking that everything is fake...lol

      January 12, 2013 at 9:30 pm |
    • End Religion

      the only person who has proof of it being real is the writer, who would be interested in helping it get more clicks... hint, hint

      January 12, 2013 at 9:35 pm |
    • AlienShark

      you would be surprised

      January 12, 2013 at 9:42 pm |
  15. noteasilyswayed

    When you run a business you cannot force your employees to abide by your religious beliefs..... basically this is all there is to it and all of their arguments will fail in the long run.

    January 12, 2013 at 9:05 pm |
    • ptneely

      They are not forcing their employees to do or not do anything. Refusing to pay for someone to have an abortion is not the same as taking away their right to choose to have one.

      January 12, 2013 at 9:13 pm |
    • Kiki

      This isn't about abortion it's about contraception.

      January 12, 2013 at 9:18 pm |
  16. Real Deal Seal Meal

    Hobby Lobby is blowing it. By trying to be the defenders of Christianity, they are going to face a defining moment in the very near future when the loophole runs out and they must choose between Christianity and money. They will choose money over Jesus. Their principles are not deep enough to abandon the golden goose.

    And they are recruiting atheists better than we atheists ever could.

    January 12, 2013 at 9:05 pm |
    • Karen A

      EXACTLY!! let's see how much this is REALLY about their religious principles...If it comes between a couple of billion dollars and year and Jesus, it's clear what they will choose....WWJD?! HA!

      January 12, 2013 at 9:10 pm |
    • ptneely

      In general, health plans with birth control and abortion coverage are cheaper because pregnancies armore expensive options. So No This is not about money.

      January 12, 2013 at 9:14 pm |
    • Real Deal Seal Meal

      If you read what we are talking about, ptneely, you will see we are talking about the fines and not the cost of insurance.

      Read, understand, then comment

      January 12, 2013 at 9:21 pm |
  17. Zobit

    People making real life decisions based on mythological beings belong in a padded room not in society.

    January 12, 2013 at 9:05 pm |
    • ptneely

      But it is their right to do so.

      January 12, 2013 at 9:12 pm |
  18. Karen A

    Hobby Lobby is fighting for it's freedom of choice to not provide their female staff with birth control, so they can take away their female employees freedom of choice in choosing to take birth control to avoid an unwanted pregnancy. They are sure screaming loud enough about having their 'religious freedom' taken away from them...so why is a women's 'productive freedom' not just as important?!! Sounds like the typical case of the typical Christian who thinks they are right and the rest of the world is wrong...and doesn't have the same rights they do...because they're right...and everyone else is wrong 8/

    January 12, 2013 at 9:05 pm |
    • ptneely

      They are not taking away anyone's freedom of choice. Refusing to pay for someone's abortion is not the same as taking away the right to an abortion.

      January 12, 2013 at 9:11 pm |
    • Kiki

      This has nothing to do with abortion pt. Why the lies?

      January 12, 2013 at 9:23 pm |
    • Karen A

      ptneely...PREVENTING a pregnancy....TERMINATING a pregnancy...how are they the same? please explain how preventing a pregnancy is abortion...THERE IS NOTHING TO ABORT IF YOU ARE NOT PREGNANT! get real and don't try to twist the facts

      January 12, 2013 at 9:31 pm |
  19. grimreaper

    Bring this company to it's KNEES !!!

    January 12, 2013 at 9:05 pm |
    • RD

      Perhaps if people kept their knees closed there wouldn't be an issue.

      January 12, 2013 at 9:20 pm |
  20. sneekas

    I would bet that if this was a company owned by Islamist folks with Islamist opposition to Obama's healthcare plan that the far Right would be in an uproar that they aren't following the law. How ironic.

    January 12, 2013 at 9:03 pm |
    • hoknee boo boo

      Ironic in what way? That you would place a bet that a group that you dislike would do something to make you feel like you are dignified in your total lack of respect for those that oppose your values? I find THAT ironic.

      January 12, 2013 at 9:10 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.