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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. Dave

    You guys are all fricken' ridiculous.

    Bunch'a mocha-chocha-lattee-yi-ya's ... lol

    Oh no's: Hobby Lobby ain't complyin' wit da O-hizzy.

    lmao

    January 12, 2013 at 9:31 pm |
  2. RogersParkRob

    I'm sorry, but this is lazy journalism.

    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.

    Hey Eric Marrapodi who cares what the HHS says. What does the law say. Another hack who hasn't read the law but care to report... their opinions.

    January 12, 2013 at 9:30 pm |
  3. YoYo

    Too bad they don't allow their employees to live by their beliefs.

    January 12, 2013 at 9:30 pm |
    • Peter

      Let's hope the CEO of Wal Mart does not convert to Orthodox Judaism and fires hundreds of thousands of employees simply because they ate shellfish.

      January 12, 2013 at 9:32 pm |
    • John

      Exactly.

      January 12, 2013 at 9:32 pm |
    • BRod

      Christians are notorious for throwing fits when people who do not share Christian beliefs also choose not to live by Christian beliefs. Gay people do not have the same rights that straight people have thanks to Christians. That is just one example.
      Live and let live – how hard is that? Jesus never taught people to force their beliefs on others. But then again, most Christians do not pay much attention to him.

      January 12, 2013 at 9:34 pm |
    • RFG

      Can I follow my beliefs on your dime? Yeah, didn't think so.

      January 12, 2013 at 9:38 pm |
    • Sue Jorgensen

      YoYo what you don't understand that this is a violation of the religious freedoms of the business owner, Freedom to practice your religion as you see fit.
      If his Religious practice is that he is more than a Sunday Christian and is required to bring all facets of his life ( how he runs his business) into harmony with God's laws, then the Government can not be able to mandate his life.
      Religion is sacred, He should not have to PROVE it he only has to believe

      The employees are free to seek employment elsewhere if they do not like the policy of their employer.

      January 12, 2013 at 10:10 pm |
  4. BAB

    When did any employer gain the right to impose its religious beliefs on employees via employees' health insurance? I doubt Hobby Lobby refuses to take customers' money because the customers may believe differently than corporate. Money's money as far as the board of directors et al see it so why should it be different for the employees? If one's money is good regardless of belief, why isn't one's labor in behalf of the employer also good enough? Employees earn what they receive in pay and benefits and it should not be based on religious beliefs. Religion is a private matter best kept in the home and should not be forced on employees.

    January 12, 2013 at 9:30 pm |
    • Wake Up

      They aren't IMPOSING anything. They are just saying they won't pay for employee's irresponsibility in controlling their reproductive systems.

      January 12, 2013 at 9:32 pm |
    • James PDX

      Taking a contraceptive like the Morning After pill IS being repsonsible with your reproductive system.

      January 12, 2013 at 9:36 pm |
  5. mark

    My prayers go to the owners and employees of companies like chck'fil and Hobby Lobby.

    January 12, 2013 at 9:30 pm |
    • YoYo

      Are you joking? This country was founded on religious freedom. I don't think you want anyone forcing their beliefs on you. Respect everyone in this free country to live as they seem fit. Everyone has to meet his maker. You, Hobby Lobby and Chick fil lie don't get to play god.

      January 12, 2013 at 9:34 pm |
    • guyontheinternet

      Contraceptives are not abortion-inducing drugs. Nice job of making stuff up, Hobby Lobby.

      And that's amazing that a corporation can have a religion. Corporations really are people too!

      January 12, 2013 at 9:37 pm |
    • James PDX

      So you're reserving your prayers for some of the most un-American wealthy people in this country? How very Christian of you.

      January 12, 2013 at 9:37 pm |
    • Sue Jorgensen

      Mark I am replying under your remark, to YOYO and guyoninternet
      YOYO you have it 180 degrees wrong the Govenment and the employees can not dictate to the Private Employer to violate their religious beliefs.
      guyontheinternet: It is not about Contraceptives being abortion inducing drugs, It could be that if they are Catholic that the interruption of the birth cycle ( things that would prevent contraception any kind of birth control) would be against their moral beliefs I think the explanation is about interfering with the blessing of life that God would grant you. And since life begins at conception many forms of birth control would be murder if the egg and sperm has mixed a soul has already formed.

      January 13, 2013 at 12:05 am |
  6. christy

    Way to go Hobby Lobby. With you on protecting your religious freedom all the way.

    January 12, 2013 at 9:29 pm |
    • BRod

      and essentially taking away the religious freedom of their employees. Yeah, way to go. Hypocrites.

      January 12, 2013 at 9:38 pm |
  7. TK

    I doubt if hobby lobby is a "christian company" what is a christian company? they are probably more like wal mart in everyday possible and they probably pay cheap wages to the chinese to make their products

    January 12, 2013 at 9:29 pm |
  8. Kornelia

    Here is what I would do. Make every employee a shareholder, as such they are no longer employees and offer a cafeteria health plan. Chapter closed.

    January 12, 2013 at 9:29 pm |
  9. Mr. Duckworth

    A clear attack on religious freedom – forcing religious based businesses to provide – not healthcare – but abortion inducing drugs. Pure Craziness… Revolution is coming, you'll see. Mother Theresa said "there will never be peace on earth, while abortion is promoted in cultures". Great statement – how can we hope for less war, while we don't respect and defend innocent life ??

    January 12, 2013 at 9:28 pm |
    • Julian

      Hobby lobby is attacking the religious freedom of it's workers.

      January 12, 2013 at 9:33 pm |
    • James PDX

      Should Hobby Lobby have the right to control what their employees spend their wages on? Of course not. So they also shouldn't have the right to control how employees use the healthcare insurance they earned.

      January 12, 2013 at 9:41 pm |
    • Sue Jorgensen

      James PDX This is the problem presented when the Government mandates not only health care but forms of health care that are murder in some peoples eyes.

      If the government had mandated that an extra $200.00 be included in wages so that everyone could signup at the minimum for ObamaCare or their favorite care package and put the responsibility to have health care on the person that would use it they wouldn't be in this pickle. No ones religious freedom or concious would be violated

      January 13, 2013 at 12:14 am |
    • Sue Jorgensen

      Just thinking further along the line of if I got a $200 raise to purchase my own health care what would happen,besides the nightmare of enforcement.
      Think about when health care costs go up and you are actually paying for it and can see it in your paycheck how people will scream.
      The way it is set up with your employer being the responsible party, even if it technically effects your pay ( the bosses is paying for your healthcare so you don't get a raise) people who don't actually fork it over with a check each month do not take as much responsibility. My healthcare $678 per month for my family
      I always wondered why the employer was responsible now I think I know. VERY INTERESTING, GOOD GAMESMENSHIP

      January 13, 2013 at 12:23 am |
  10. NERO!!!!

    ONLY IF HE HAD LIVED ANOTHER 1000 YEARS , OH THE JOY!!!!

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

      Dream on, there are plenty of us and we're not going away. Go run over a puppy or kitten, maybe you'll feel better, part of your anger management.....

      January 12, 2013 at 9:35 pm |
  11. IMHO

    Hobby Lobby is a family owned business, just in the form of a corporation. Their family just wants to run a profitable business according to their Christian values. It's not about the money, stupid, it's about the right to follow their Christian values and to run a business. It's not illegal, immoral or greedy to fight for your rights. It's coercion to force the company to pay such outrageous fines while the case is still up in the air. If they lose and choose to pay the fines, it will be a loss for all. The company will be hurt, maybe even go out of business. Jobs will be reduced. And the rights of religious people trying to own and operate a business in accordance with their personal/religious beliefs will take a hit. To most employees, it's just a job. They put in their hours and collect a guaranteed wage. To these owners, it's their livelihood and a statement of their faith. They put in lots of hours in hopes of making a profit (not guaranteed). Sunday would seem to be a great day to be open for business. But they are closed in honor of their faith. Doesn't sound like they're driven by greed to me. Religious people shouldn't have to give up their beliefs in order to run a business!

    January 12, 2013 at 9:25 pm |
    • Fun with data

      The religious "freedom" of the company denies the religious freedom of the employees. The company is playing god and determining what health care their employees have. If you can't see how wrong that is, WOW!

      January 12, 2013 at 9:31 pm |
    • sick of this crap

      Coulda fooled me. I thought it was about them deciding for other people what's best. Total groundless BS is what it's about.

      January 12, 2013 at 9:32 pm |
    • brianmcbride99

      I agree wholeheartedly with your comment.

      January 12, 2013 at 9:37 pm |
    • FSM

      It's a good thing they support the Chinese who mandate 60% of their population to get abortions and to have their products made in Chinese sweatshops. That's the Lords way. Selective biblical principles.

      January 12, 2013 at 9:40 pm |
    • demsrule

      I agree with you to a certain degree. When these companies allow themselves to operate within the parameters of government restraints such as equal opportunity, fair pay act, minimum wage requirements, I9 forms used to verify citizenship status..all of which are government forms- then they should comply with this. I hear people say that religious organizations should not be "forced" to do certain things, but they also think they can pick and choose the governmental things they agree with with. Churches or religious organizations that apply for and receive 501c3 exempt status should take this in consideration as well before they start complaining about government interventions. The Christian Bible clearly reference that even they, when application is made for government intervention and benefits, are bound by the laws of the land in which they live. If they don't like the laws, then they should not seek any part of the government in which those laws are mandated.

      January 12, 2013 at 9:43 pm |
  12. Awakened

    Why is Hobby Lobby deciding whether or not an employee is going to choose to have an abortion or not. Its none of their business, literally! THEY are not giving their employees religous freedom while crying that the goverment is not giving the company religious freedom. I hope Hobby Lobby has to pay the fines and learns to respect their employee's freedom of choice...stay out of people's bedrooms!!!

    January 12, 2013 at 9:25 pm |
    • Ross

      What? They are not telling their employees what to do. They are just saying they will not pay for certain things. Huge difference.
      And they shouldn't have to. If an employee wants that coverage then they can quit and work for someone who is offering the coverage.

      January 12, 2013 at 9:29 pm |
    • wnetmacman

      Hobby Lobby is not deciding whether to allow their employees to get an abortion or not. They're deciding that they don't want to pay for it. There's a big difference. Standing up for their religious beliefs is their right.

      January 12, 2013 at 9:30 pm |
    • Wake Up

      They aren't saying that their employee's can't get abortions. They are saying that they won't pay for them. That is a HUGE difference, and they should be allowed that viewpoint. To some people, even regardless of religion, abortion is still murder.

      January 12, 2013 at 9:30 pm |
    • Michael

      Want much?

      January 12, 2013 at 9:36 pm |
    • Dee

      Sounds to me like Hobby Lobby is trying to to stay OUT of the bedroom, which means they don't want to be forced into the providing for the abortion for somebody that doesn't have enough self control in their bedroom activities to prevent unwanted pregnancies. Doesn't say that all forms of birth control are not covered, just the abortion-inducing type. Expecting a company to pay for people's carelessness is ridiculous.

      January 12, 2013 at 9:47 pm |
  13. Saint Paul

    Every sperm is sacred,every sperm is great,for every sperm that's wasted,God gets real irate! Monty Python's Meaning of Life movie,check it out.

    January 12, 2013 at 9:24 pm |

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

      January 12, 2013 at 9:29 pm |
  14. NERO!!!!

    I hate christians!!!!!!!!!!

    January 12, 2013 at 9:24 pm |
    • Wake Up

      We hate you back.

      January 12, 2013 at 9:31 pm |
    • christy

      Yes Nero, we know you hate us, but thankfully, Nero, we have freedoms in the States that protect crazies like YOU from feeding us to the lions.

      January 12, 2013 at 9:31 pm |
    • JRob

      Go run over a kitten, you'll feel better.... Perhaps anger management because we are not going, there are zillions of us, deal with it.....

      January 12, 2013 at 9:40 pm |
  15. Pravda

    Okay, here is the plan, you 5 anti-Christian atheists that sit all day in CNN forums, go ahead and Boycott Hobby Lobby. See what difference it makes...

    January 12, 2013 at 9:24 pm |
    • IrateCustomer

      Ye cannot serve God and mammon

      January 12, 2013 at 9:48 pm |
  16. Dean

    By this same logic, could an organization backed by Jehovah's Witnesses refuse to pay for any type of healthcare that would require a blood transfusion? Sorry – but your organization doesn't get to pick and choose how employees manage the health of their own lives and if those employees decide they want birth control they should have access to it. If you use religion as a shield then we can see how absurd the argument can become.

    January 12, 2013 at 9:24 pm |
    • Awakened

      Totally agree!

      January 12, 2013 at 9:29 pm |
    • christy

      Is an employee forced to work for a Jehovah's Witness organization?

      January 12, 2013 at 9:32 pm |
    • raisefitness

      But even the government has laws banning tax dollars from being spent on abortions. It's that ole government double standard.

      January 12, 2013 at 9:36 pm |
    • Sue Jorgensen

      So your telling me that the employees can't go down to Planned Parenthood and get what ever they want at a reduced or free rate?
      as my previous post to others said laying aside the argument that the government has mandated that private people pay for others to have an abortion the Religious ramifications for some people would be no different than paying someone else to murder
      .

      January 13, 2013 at 12:48 am |
  17. IrateCustomer

    What a bunch deadbeats. Boycott them until they do right.

    January 12, 2013 at 9:24 pm |
  18. schapkj

    No company is required to offer health insurance to its employees. Companies do so because they get a tax break on the cost of the insurance provided, and it helps attract employees. When the cost of that insurance exceeds the benefits a company derives from offering insurance, it will quit offering the insurance. Everyone seems to be forgetting that, so don't be surprised when companies begin dropping insurance and it will be up to the employees to find their own. Somebody has to pay.
    Hobby Lobby is privately held, so they answer to no public shareholders. If the cost includes overriding their religious beliefs, I see no reason for them to continue to offer insurance. Like so many liberal ideas, you punish all trying to shove benefits for a few down others' throats.

    January 12, 2013 at 9:24 pm |
    • IrateCustomer

      Yes – they are playing the system. But remember – If the public begins to view them negatively then there will be an economic fallout for them as well. Their religious freedoms end where others begin.

      January 12, 2013 at 9:30 pm |
  19. Short legged

    Hobby Lobby can just cut all their employees hours to no more than 28, drop all insurance coverage for everyone, and let each employee buy their own coverage (or face fines from the IRS)

    If the owner feels strongly enough about his convictions he can shutter the entire operation and call it a day.

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

      From how I read the article, Hobby Lobby already provided health coverage (except the morning after pill) to it's employees out of a sense of Christian duty. If they reduced employee hours to avoid health coverage all together, it weaken their argument and most likely make it impossible for them to claim religious grounds given the company's previous statement.

      January 12, 2013 at 9:29 pm |
    • Short legged

      Jeremy, I agree with your statement. But if Mr. Green truly believes that by paying for the morning after pill it violates the will of God, he has no choice but to take a solution to prevent his participation in this mandate. If you truly believed that your immortal soul would be imperiled by an action, would you not do anything and everything to prevent that outcome?

      January 12, 2013 at 9:40 pm |
  20. Pravda

    Cudos to the clueless leader. He FORCES Obamacare through, now companies are cutting back employee's hours just to bypass it. What an idiot...

    January 12, 2013 at 9:22 pm |
    • Scuba Steve

      Pravda misspelled Kudos. What an idiot...

      January 12, 2013 at 9:50 pm |
    • Tom, Tom, the Piper's Son

      You're surprised? Half these Obama-haters are high school dropouts who live in trailers down by the river.

      January 12, 2013 at 10:03 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.