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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. Bud

    Shop at Michael's!

    January 12, 2013 at 9:42 pm |
    • DrBob

      Exactly. Avoid the arrogance of this company's owners. I hope the government shuts them down and soon.

      January 12, 2013 at 9:44 pm |
  2. don't do crazy things

    Hobby Lobby can afford to bluff since they have so little to lose.

    They have more locations than they do customers.

    January 12, 2013 at 9:41 pm |
    • DrBob

      This is the first I have ever heard of them. Now I'm glad I never shopped there. Kinda wish I never heard of them and their religious arrogance. It just makes me mad when people pull this bull. They think they are special and above the law.

      January 12, 2013 at 10:02 pm |
  3. lionlylamb

    Abortions along with the day after pills and all manners of contraceptives abounds to governmentally controlled democide.

    January 12, 2013 at 9:41 pm |
  4. AW

    Hobby Lobby is also violating their employees second amendment rights by not covering their guns.

    January 12, 2013 at 9:41 pm |
  5. IMHO

    Hobby Lobby isn't saying that their employees can't have abortions or use contraceptives. It's saying that it's against their conscience to pay for those things. The employees can go elsewhere and obtain whatever healthcare they want. I, for one, wouldn't want to force a Jehovah's Witness pay for a blood transfusion. But I would make it clear up front when hiring an individual what otherwise normal treatments wouldn't be covered if working for a religiously founded company.

    January 12, 2013 at 9:39 pm |
    • DrBob

      Hobby Lobby owners are demonstrating extreme arrogance and discrimination, plain and simple.

      January 12, 2013 at 9:46 pm |
    • BluegrassLass

      So if you worked for a Jehovah's Witness, and they refused to carry an insurance plan that covered blood transfusions, you'd be ok with that? Because that's essentially what Hobby Lobby is doing. Just because a person owns a business, doesn't give them the right to use their religious beliefs to deny you medical treatment.

      January 12, 2013 at 9:49 pm |
    • Nathan

      Except the LAW doesn't' see it that way. Companies are not religious, people are. And when companies pass a certain threshold and apply for certain legal statuses, like incorporation, it is agreeing to play by the law AS A COMPANY, regardless of what the founder's or senior executives' personal views are. They don't get to claim all the benefits of corporate status on one hand, including limiting their personal financial liabilities, and then demand their personal religious preferences serve as validation to pick and choose what laws they'll follow when they don't agree (especially when their choice affects the legal rights of their employees).

      January 12, 2013 at 10:05 pm |
    • IMHO

      DrBob – Your extreme arrogance and discrimination are deafening. Since when is defending your rights arrogant or discriminatory. If you don't defend your rights, they're likely to be taken away.

      BlueGrassLass – No one is denying you the right to get the medical care you want. They are just asking that you pay for it yourself. Making them pay for it is asking them to violate their religious conscience. Even the gov't allowed conscientious objectors to opt out of the draft.

      January 12, 2013 at 10:07 pm |
  6. Scott michaels

    Just supply the health care already... It's so much cheaper than the fines... Let your employees decide how they want to use their healthcare.. It's none of your business and doesn't cost you a thing.... Pathetic

    January 12, 2013 at 9:38 pm |
    • hal 9001

      I agree, "Scott michaels". The human-based company should just let X = X.

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

      "...and doesn't cost you a thing." The ignorance of liberals never ceases to amaze me. I guess the "affordable" healthcare act is paid for by money growing on trees or a trillion dollar coin, not American businesses and their owners.

      January 12, 2013 at 9:47 pm |
    • DrBob

      I couldn't agree more. The arrogance of these religious extremists is amazing.

      January 12, 2013 at 9:49 pm |
  7. Winston5

    Send this company back to the stone age...

    January 12, 2013 at 9:38 pm |
  8. Dr. Zeus

    More proof of the evil that comes of religious delusion.

    January 12, 2013 at 9:38 pm |
  9. brdodge

    But when their hours are cut they are going to be able to get unemployment benifits for their lost hours. So the businesses are going to have to pay either way.

    January 12, 2013 at 9:38 pm |
  10. 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 9:38 pm |
    • Winston5

      (nice one)

      January 12, 2013 at 9:41 pm |
    • JJ

      They aren't arguing against providing contraceptives, they are arguing against providing the morning after pill that would abort a fetus should conception have occurred.

      January 12, 2013 at 10:11 pm |
  11. brian

    change the name of the store to "baby hobby lobby" and they can branch out into providing daycare too for all their employees' unnecessary and/or unwanted babies... throw in a few video games and a pool table too, and oh yeah some washers and driers... Just helping them create an improved business model.... And oh yeah, some condom machines in their bathrooms.

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

      Think they'll agree to provide bus fare straight to the local jail so when all these unwanted children turn 18
      they don't further tax our society with their many trips through the costly penal system? Perhaps HL could fund
      a gas chamber to drop the unwanted in on their 18th birthday, the magic age where Christians and their poisonous,
      lunatic ilk stop caring about people.

      January 12, 2013 at 9:41 pm |
    • Winston5

      u sound like a fomer "unneccessary baby", there buddy.

      January 12, 2013 at 9:42 pm |
    • Ana

      It's true. God help anyone running into any of my 7 unwanted siblings in a dark alley.

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

    I'm going to be laughing my ass off when the bill(plus interest) eventually becomes due. It will probably spell the end of the chain stores and put people out of work in the end. Its a shame they just cannot comply with the law LIKE EVERYONE ELSE!

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

      Religious arrogance is all it is.

      January 12, 2013 at 9:48 pm |
  13. pipi

    A corporation is not a person and cannot hold religious beliefs. A corporation is a company formed by one or more people to represent a product or products. A corporation cannot make an employee believe as it does because it cannot have beliefs, only the owners can have beliefs. It is wrong for them to seek a loophole. People wonder why regular folks don't like the wealthy. The wealthy elite will always seek a "loophole" to get them out of a fix. I am surprised that Hobby Lobby didn't follow suit with Wendy's, Chili's, Olive Garden, and Red Lobster, by cutting hours so their employees can't qualify for health insurance. I am sure that's coming next. Companies want to make gargantuan profits and provide nothing but wages and no benefits for the workers. It's no secret that Hobby Lobby's sales are well over a million dollars per day. It's ridiculous to think that all your employees hold the same beliefs as the owner.

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

      You must be an idiot and have no concept of economics. This is the problem in today's America. Too many people that think they know the facts when in fact they do not....

      January 12, 2013 at 9:39 pm |
    • brdodge

      What is so wrong about a business owner trying to make a profit. Most retail businesses run on a very small proffit margin.

      January 12, 2013 at 9:41 pm |
    • DrBob

      I hope the government fines them out of business. The arrogance of some of these "so called Christians" amazes me.

      January 12, 2013 at 9:43 pm |
    • Randy

      In the eyes of the law, corporations are like people. While this is a simplification, it is an adequate description. It is this status that allows corporations to be sued and taxed. Keep in mind that Hobby Lobby does not want to drop health insurance. At least they are not looking to cut hours to avoid providing coverage!

      January 12, 2013 at 9:52 pm |
    • Dee

      You liberals run around screaming about how horrible every business owner is with such vehemence that you don't even think about the repurcussions of shutting down every business that you don't agree with. With your opinions, you might as well put everyone out of business, because quite frankly, most people don't believe and think like you do. And once all of those horrible businesses and corporations are out of business, where are you going to work? Hope you learn how to farm or something.

      January 12, 2013 at 10:01 pm |
  14. AW

    Drive this company out of business! Then their employees won't have ANY health care coverage!

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

      That is true. Obamacare has already driven many businesses down. Obamacare, the mother of all job killers

      January 12, 2013 at 9:42 pm |
    • don't do crazy things

      It may be hard on some businesses to make them pay their bills.

      January 12, 2013 at 9:48 pm |
  15. Alf

    How can a company or corporation have religious beliefs? By them taking a stand on not complying with this law, they are in effect forcing religious beliefs on their employees, regardless if they believe in the same beliefs as owner ship or not. If fact the employer is discriminating against its employees, or at least the ones who do not share the same values and opinion.

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

      A company that is incorporated can be privately held, which Hobby Lobby is privately held. as long as there is consensus among the owners they can endorse any religion they want. They can force their views on their employees to some degree. However there is no forcing religious beliefs on their employees. Their employees have every right to get abortions as long as they pay for them themselves. it is not forcing religion on an employee not to pay for their abortions whether you will not sponsor for religious reasons or monetary ones

      January 12, 2013 at 9:42 pm |
  16. don't do crazy things

    If this "against my morals" ploy works Scientology will boom.

    January 12, 2013 at 9:34 pm |
    • Moby Schtick

      Christian Scientists?

      January 12, 2013 at 9:38 pm |
  17. tilsunexplod

    I am 100% pro-choice, but I'm siding with the company on this one. There's nothing stopping women from paying for their own abortions. It's not right to force someone else to pay for them when the payer has deep moral objections to them. This is the result of over-socialization, the forcing of too broad a set of values on everybody, and it doesn't work unless everyone agrees to the set of values being forced on them, which means you have to pare back that set of values until you do get universal agreement. If the whole stupid 'Obamacare' idea was done right, it would be much smaller, but deal with ONLY the REAL problem with our medical system which has really become an unholy alliance between capitalists selling socialist full-coverage insurance and the medical establishment which has, first through the insurance system, and now through the government found a way to 'mainline' it's income stream. If we, the consumers, had not fallen for the utopian promise of full-coverage insurance in the first place we wouldn't be in this mess. If we had ONLY bought catastrophic insurance so that the doctors and hospitals could continue to get paid when we get REALLY sick or injured, but resolve to save money and pay for all the little things ourselves, we'd have a much healthier, streamlined and efficient medical economy. The liberal's answer to oversocialization through insurance is to say: "see, the capitalists running the insurance companies have really messed up your socialist desires, you should let the government run it now". That's what they're telling you only most of you aren't hearing that, instead you're hearing all the red-herring, straw-man misdirections and allowing your time and mental energy to be wasted on hot-button SYMPTOMATIC issues like abortion (abortion, or lack of abortion are both symptoms of a really bad condition: unwanted pregnancy... spend your time, energy, and money worrying about how to prevent the unwanted pregnancy, because either result in this case turns out bad and it doesn't matter which way it goes).... so much wasted time and energy... so many real issues to be solved...

    January 12, 2013 at 9:33 pm |
    • Kiki

      It's about contraception not abortion. Domyour homework.

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

      KiKi No it isn't. Abortion is a form of contraception. Hobby Lobby has no problem providing *prevantative* contraception. They do have a problem with abortion contraception. Read the article

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

      They are trying to claim that Plan B causes abortion but it does not. No one is requiring them to cover RU 482 which does cause abortion.

      January 12, 2013 at 9:38 pm |
    • Kiki

      It is emergency contraception...ie contraception.

      January 12, 2013 at 9:39 pm |
    • Lisa

      So you agree an employer should be able to control health insurance benefits based on the morality of that company?

      i.e. To get a prescription for Viagra, proof of marriage must be provided.
      To get one for STD medication, proof of marriage & of spouse's infidelity must be provided.
      Medications for obesity-related medications could not be covered because gluttony is immoral.

      Is this agreeble to you?

      January 12, 2013 at 9:40 pm |
    • Justin R

      Plan B is not an abortive agent. I'm a pharmacist, I can send you copies of my pharmacology textbooks if you would like.

      January 12, 2013 at 9:45 pm |
    • tilsunexplod

      missing the point... you can pay for it yourself! Just because you can't get it through insurance doesn't mean you can't pay for it yourself!!!!!!! The socialists WANT you to forget this!!! They want you to think you CAN'T pay for ANYTHING yourself, you HAVE to rely on someone ELSE for EVERY LITTLE THING!!!!!!!!!!!!!!!11111

      January 12, 2013 at 9:51 pm |
    • Hasas

      Lisa, companies shouldn't have to offer meical plans at all if they don't want to, but federal law requires many to do so. Now they can't even avoid many trivial elective procedures and drugs. If an employer doesn't want to cover viagra who cares. Pay for it out of pocket
      Key Words UNNECESSARY- ELECTIVE
      I don't know of any STD that arent classified as DISEASES. They are called diseases because they are diseases and are integral to maintaining proper health or survival. Preganacy is not a disease... An abotificient is not a cure for a disease
      If an employer doesn't want to provide your elective coverage for birth control it is not the same not covering treatment for a disease. It is even further removed when you consider a specific form of birth control may actually be an abortaficient.

      January 12, 2013 at 9:58 pm |
    • BSkeptical

      Tilsun, you are the only poster that seems to get what it going on here. Good post, I agree with you completely.

      January 12, 2013 at 10:03 pm |
  18. ohiasia

    Can someone remind me why we all get our health insurance through our employer, only to have to scramble around whenever we change (or lose) jobs? I've had a HDHP+HSA for several years now, which is actually cheaper than my employer's plan. Why is it almost a given to go through one's employer?

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

      I pay for my own (self-employed, no employees), and I get just gouged. Corporations can negotiate lower costs due to their size, but we individuals cannot. I would pay cash for everything (except the most major cost insurance) because they are ripping me off so badly, except then I lose the negotiated rate the insurance company gets and I get ripped off by the doctors.

      Health care is a disaster in this country, obamacare is a band-aid on a heart attack, and we will eventually end up at single-payer purely out of the wreckage of the present system of insurance company greed.

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

      During wwii employers were prohibited from competing for employees with higher wages, so health insurance packages were born. Trumans national healthcare push was labeled "bolshevist" by big biz. Go figure!

      January 12, 2013 at 9:38 pm |
    • Chris Koffend

      Because typically getting health insurance coverage through an employee is much less expensive. In most cases, the company/employer pays a large portion of the premium costs. Yet so many people in this country seem to think or believe than $100-$150 insurance deduction from their check every two weeks is the full cost amount. Sorry folks, that amounts to less than 25% of your premium costs. in most cases, the company is paying the rest out of their pockets – aka that is why it is referred to as an employee benefit. Buying similar coverage insurance on your own, when your employer is picking up a large percentage of the bill will be much, much more expensive.

      January 12, 2013 at 9:41 pm |
    • Moby Schtick

      We're in the age of bureaucracy. Insurance companies have great lobbying folks, so they're plugged directly into the pipeline. I think you're more correct than any of us realize.

      January 12, 2013 at 9:41 pm |
    • Ian

      I understand it dates back to World War II. Wages were frozen in order to stabilize the wartime economy, but employers wanting to raise wages found a loophole by offering free health insurance. It was ruled that such benefits weren't covered by the wage freeze. After the war, employer-provided health benefits became the norm.

      It's a broken system. Because employers get bulk discounts, those trying to buy insurance on their own end up paying more. If everyone had to buy their own health insurance, like we do with car insurance, prices on individuals would be lower.

      January 12, 2013 at 9:42 pm |
    • keltari

      Because in many cases, health care through a company is free.

      January 12, 2013 at 9:43 pm |
    • ohiasia

      Exactly! I don't know why it can't be assessed on an individual basis like auto insurance.

      January 12, 2013 at 9:46 pm |
    • Pethuel

      Thank FDR. He is ultimately responsible for employer-based coverage. In the 40's among his many Executive Orders were wage and price controls. One result was that companies could not effectively compete for top talent by offering more money. The gov't capped what they could offer. To get around this, they offered medical coverage for employee and family as a tactic to get the best people. For many years, only executives and other "white collar" jobs got these perks. People got used to the them after the war when the caps were lifted. As the power of unions grew in the late 40s and 50s part of their demands because medical coverage similar to what the bosses had. This is how employer-based insurance got started.

      January 12, 2013 at 9:56 pm |
    • Pethuel

      Keltari, nothing in this world is free, including a free lunch. Just because you do not see the bill does not mean it is free. Someone (likely employer) is paying. Those costs get passed on to employees as reduced wages and higher prices for products and services to customers.

      January 12, 2013 at 10:00 pm |
  19. EricInNC

    The article states that insurance must cover FDA-approved contraception, but HL is apparently talking about "abortion inducing" drugs. The two are not the same thing. If HL is claiming that the morning after pill is an abortifacent, they are full of it. Furthermore, birth control pills are used for a lot more than preventing conception. HL can rot.

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

      You are right, they are not the same thing. It appears they do not cover abortion-inducing drugs now and will face a penalty if they do not add them. It does not sound like they are misinformed as to birth control pills vs. abortion-inducing drugs. Apparently, there is something on the list they don't want to cover and it is reprehensible that the government is forcing them to do so.

      January 12, 2013 at 10:44 pm |
  20. j

    Now there's a true Christian organization....!! That's why I REFUSE to shop at Hobby Lobby!

    January 12, 2013 at 9:31 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.