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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. dtboy

    One thing I've found to be true is the longer you're educated by government schools, taught by government-employed teachers, and funded by government tax dollars, the more you tend to believe that government is not only your friend, but your legitimate master. Your indoctrination includes respecting, obeying and serving it.

    January 13, 2013 at 1:09 am |
    • Sue Pearlative

      There are lots of people who believe that the govt is their friend and that they should obey the law, who have been taught that by their parents, with or without public schools. If you're a Christian, your faith teaches you that government is to be respected and the laws obeyed, unless they actually break one of Christ's commands. But if you're going to refuse to provide health insurance because it also funds contraceptives, I have to ask if that is rational – since your employee might die as the result of being uninsured (it happens all the time). Also, are you consistent, by refusing to patronize pharmacies that sell contraceptives?

      January 13, 2013 at 1:40 am |
  2. Zingo

    I wonder how a billionaire so obsessed with religion can ignore Jesus' warning that a rich man is less likely to get into heaven than a camel to pass through the eye of a needle? Since that is impossible, Sounds like he and his family are DOOMED!!!!

    Sell your goods and give the proceeds to the poor? Hmmm, kinda ignores that one too.

    No, Biblical rules only apply to the other people.

    But I guess you can't be a Christian without being a hypocrite!

    January 13, 2013 at 1:07 am |
  3. mrstanaland

    If you just look at the single issue, Hobby Lobby's stance makes sense. But what happens if your employer is against kidney or heart transplants because of some religious belief...do you give them a religious exemption? What if they are against antibiotics? I just don't think the employer should decide any of this. Besides medical insurance is really compensation, so it's not really like Hobby Lobby is paying for it.

    January 13, 2013 at 1:05 am |
  4. Lizard Lance

    Hey Hobby Lobby! How about you offer healthcare coverage to your employees and then you don't have to deal with the strings attached to Obamacare! There. Isn't that simple?

    January 13, 2013 at 12:56 am |
  5. Don H of Big D

    Funny that Hobby Lobby vigorously stresses that it is "pro-life" and we haven't heard a peep out of them protesting state executions. Once again, another conservative organization shows that it is more concerned with the fetus than it is the living person. Thankfully I can adjust my shopping habits and take my wife and kids to Michaels instead of Hobby Lobby.

    January 13, 2013 at 12:54 am |
    • 0G-No gods, ghosts, goblins or ghouls

      And I wonder if they don't hire, or fire, anyone that has premarital s3x, a divorce, commits adultery or has an abortion.

      January 13, 2013 at 12:58 am |
    • dtboy

      That's the part you're NOT getting. They believe a fetus IS a living person and don't want to be forced to pay for anything that may harm or kill that fetus person, thus contradicting that belief. You, on the other hand, are completely disregarding their beliefs and have the arrogance to believe they should accept yours, as if you're the authoritative one.

      January 13, 2013 at 1:02 am |
  6. Skegeeace

    So just by providing coverage for so-called "abortion inducing drugs" (OHMYGOSH- the morning after pill does NOT cause abortions! UGH!), Hobby Lobby feels like they're participating in abortions???

    By that logic, if I give someone a gun, I am participating in them potentially using it to kill people. That's a DUMB line of thinking, right? (And odd, since most evangelicals are weirdly clingy with their guns.)

    II think they're grandstanding, personally. You're providing COVERAGE- not actual abortion services. If the employee uses the coverage to get "abortion drugs" (shoot me now), then it's not your problem any more if you gave them a gun and they went nuts and shot people.

    January 13, 2013 at 12:50 am |
  7. Puchi

    Did you know that companies pick and choose for most of what they want to offer in their insurance policies. I worked for a company that did Not include the stomach surgery for obese employees. They just said go on a diet and excerise. So what's the difference here. What is the agenda here. I'm sure we all think Obama and his kind are so wonderful...BS someone is getting paid its always about the almighty dollar and power..........companines could just say stop getting laid....um stupid, why do I have to include in my policy things I don't want. Also health benefits are used for illness since when is pregnancy an illness geeeesh

    January 13, 2013 at 12:48 am |
  8. Puchi

    Did you know that companies pick and choose for most of what they want to offer in their insurance policies. I worked for a company that did include the stomach surgery for obese employees. They just said go on a diet and excerise. So what's the difference here. What is the agenda here. I'm sure we all think Obama and his kind are so wonderful...BS someone is getting paid its always about the almighty dollar and power..........companines could just say stop getting laid....um stupid, why do I have to include in my policy things I don't want. Also health benefits are used for illness since when is pregnancy an illness geeeesh

    January 13, 2013 at 12:47 am |
    • Puchi

      Reported this one was incorrect
      Correct is ... Company did NOT include

      January 13, 2013 at 12:50 am |
  9. Michael

    Good for Hobby Lobby. Obamacare is the worst law in history.

    January 13, 2013 at 12:36 am |
    • 0G-No gods, ghosts, goblins or ghouls

      Only because Obama didn't go far enough – for a single payer system like most advanced countries.

      January 13, 2013 at 12:38 am |
  10. Meki60

    If you look at where we are today things are 85% worse than they were 8 years ago before Obama took office.

    January 13, 2013 at 12:29 am |
    • Simple Life

      Don't be a right wing tool. Look at what's going on in our nation. After Bush sank our economy, it's back on the rise thanks to our current president. And Obama got into office 4 years ago, not 8 years ago.

      January 13, 2013 at 12:34 am |
    • dtboy

      @simplelife – seriously? One deity, bka Obama, "saved" our nation? It had nothing to do with man's natural ability to adjust to even the worse conditions? You're given too much credit.

      January 13, 2013 at 12:44 am |
  11. Marri

    A store that specializes in selling products imported from countries that pay workers as slaves and treat them the same is worried about the reproductive activities of its employees...BAAHHHH You'll never get another penny from me Hobby Lobby

    January 13, 2013 at 12:28 am |
    • Simple Life

      You could name 98% of retail businesses along with Hobby Lobby in what you say. I guess you won't be buying much from here on out, huh?

      January 13, 2013 at 12:32 am |
    • Zingo

      The Bible says it is okay to use slave labor, so Hobby Lobby is just being biblical.

      January 13, 2013 at 1:09 am |
  12. AlienShark

    You will be interested to know that many of the "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 internet search will teach you all about their little known but thriving business.

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

    January 13, 2013 at 12:28 am |
    • bob

      So, Alien, how much does your firm pay?

      January 13, 2013 at 12:32 am |
  13. Todd

    Is Hobby Lobby a church or a business? I thought they operated stores used to sell products for profit. Aren't they bound by the same laws as other businesses?

    January 13, 2013 at 12:21 am |
    • geeworker

      no religious organization can be exempt from certain parts of the bill Hobby lobby just want their day in court to present their case and the government is delaying the process just to fine them

      January 13, 2013 at 12:25 am |
    • yc

      I think they are saying this aspect of the law is wrong and should not bind any business.

      January 13, 2013 at 12:27 am |
  14. thenitenurse

    I'm sure Hobby Lobby has no problem with providing men with their prescriptions for erectile dysfunction. There's always a double standard!

    January 13, 2013 at 12:18 am |
    • geeworker

      please provide an example of hobby lobby providing coverage for this

      January 13, 2013 at 12:27 am |
    • Simple Life

      Well....... if our health care should pay for a woman's birth control, they should pay for my condoms too. It's only fair.

      January 13, 2013 at 12:29 am |
    • Alex

      Have you confirmed that Hobby Lobby provides coverage for ED drugs? Didn't think so. Until then lets stop accusing them of committing double standards.

      January 13, 2013 at 12:31 am |
    • Reason

      @Simple Life – Thank you for pointing out how ridiculous the mandate is. No healthcare plan should force businesses to pay for contraceptives for employees. Period.

      January 13, 2013 at 12:57 am |
  15. Lela

    Not only does this president have no clue about the challenges of average workers who will get fined for attempting to work as many hours as possible, but it is also obvious that big corporations have worked on loopholes as soon as they found out about this dumb Obamacare law to begin with.

    The healthcare plan is not thought through, will hurt millions of working Americans (many of which were not even aware of the true context of this dumb plan) and it will allow large corporations to take advantage of workers even more so than before.

    Congratulations Mr. President, you have the blood of millions of workers on your hand who will go insane attempting to escape the fallout of this healthcare plan. Expect more workplace shootings folks.

    January 13, 2013 at 12:14 am |
    • Todd

      Its obvious by your lack of specifics that you have no idea what your talking about.

      January 13, 2013 at 12:23 am |
  16. Political Despot

    The perfect move for such a wonderful CHRISTIAN based company. Find a way to legally do something illegally so that you don't have to pay for services that as a CHRISTIAN go against your beliefs. Seems Hobby Lobby is re-writing the Ten Commandments to help keep their profit margins up.

    January 13, 2013 at 12:10 am |
    • geeworker

      what have they done that is illegal ? they are following the law the very same law that is hiding behind a processes that denies them their day in court to present their case

      January 13, 2013 at 12:23 am |
    • TD

      Clearly, the only perseption you have of being a CHRISTIAN comes from the propaganda and misinformation you receive by your peers about being a CHRISTIAN. You don't really know, you're arguement is invalid.

      January 13, 2013 at 12:27 am |
  17. mike m

    The founding fathers made this a country controlled by law enacted by the people for the people, not by religious beliefs promulgated by some church. The law controls, not religion. The Middle East and Africa are where countries are controlled by religion.

    January 12, 2013 at 11:58 pm |
    • TD

      What about when they made the law protecting freedom of religion?

      January 13, 2013 at 12:24 am |
    • dtboy

      @Mike M – you need another class in the Declaration of Independence, which is founded upon the belief in a higher power than man, which the government's role of protecting the unalienable rights from the Creator.

      January 13, 2013 at 12:39 am |
    • Zingo

      That freedom of religion law specifically and intentionally excludes religion from government.

      The Declaration of Independance has no legal authority whatsoever – it was nothing more than a declaration of war, not a governing document. It was also written by Thomas Jefferson, one of the two main forces behind separation of church and state. He was explicitly against any role for religion in laws or government.

      Christians sure don't know the history of their country.

      January 13, 2013 at 1:01 am |
  18. thegadfly

    Hobby Lobby owners are free to exercise their religion. They are not free to impose it upon their employees. If they are so sure that God wants them to not pay for family planning, they can lay off all their peons and shut their doors. Minimum wage s*** jobs aren't that hard to find - it's good paying jobs that are scarce.

    And I've been in their stores. They don't have a single piece of merchandise that anyone actually needs. It's all cutesy fluff. They'd be doing the world a favor if they closed all their stores forever with the merchandise still on the shelves.

    January 12, 2013 at 11:57 pm |
    • TD

      It isn't stuff YOU need, or more likely can use, and in this economy, any job is a blessing. Just ask all the bertenders out there with an MBA that can't get a job in their field.

      January 13, 2013 at 12:30 am |
    • Zingo

      Bloody shame W. Bush ran America into the ground.

      January 13, 2013 at 12:57 am |
  19. Reality

    Some nitty-gritty:

    "Twenty-one states offer exemptions from contraceptive coverage, usually for religious reasons, for insurers or employers in their policies: Arizona, Arkansas, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan (administrative rule), Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Texas and West Virginia."

    http://www.ncsl.org/issues-research/health/insurance-coverage-for-contraception-state-laws.aspx

    So the US Supreme Court might rule that the issue is one of states' rights.

    January 12, 2013 at 11:57 pm |
  20. us_1776

    Insurance only works when "everybody" participates.

    To allow anyone to avoid participation is to allow the camel's nose under the tent.

    Obamacare is the best thing to happen to US healthcare ever.

    .

    January 12, 2013 at 11:54 pm |
    • lionlylamb

      Insurance is out for profitability for their stockholders only. They really don't give a damn regarding individuals reasons for needed healthcare issues. With today's citizens out of work, just who will pay these citizen's premiums as mandated by Obamacare?

      January 13, 2013 at 12:10 am |
    • TD

      Obamacare is one of the worst things that happened to America. It has nothing to do with Healthcare. It's name is the Affordable Care Act, it's all about the money.....not healthcare. Insurance does not only work when "everybody" participates. It is based on a risk group and other factors that weigh the profitability of coverage for a certain group for a certain set of events based on previous statistics. The healthcare system in the U.S. still needs to be reformed, but now everyone thinks Obamacare fixed that and no one is doing anything right to fix it. It is all about following the money.

      January 13, 2013 at 12:37 am |
    • Beth

      Let's try it. We can always improve it if there are glitches. My insurance company pays for my Gym dues so I'll exercise. They also send out a calendar each year with tips on different wellness and money saving tips, like going for generic drugs when filling a prescription and important questions to ask my doctor. So I can look at it like well they just don't want me sick so they can save money, but I don't think that way. I want to stay well. But just in case I get sick I want that security. It's like just in case I get into a car accident, I want the security of knowing I've got insurance.

      January 13, 2013 at 1:17 am |
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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.