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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. Joe W

    Joe B had it right/

    f Hobby Lobby can deny contraception coverage based on religious principles then...

    A company owned by Scientologists can deny psychiatric coverage...

    A company owned by Jehovahs Witnesses can deny blood transfusions...

    A company owned by Christian Scientists can deny all medical coverage...

    January 13, 2013 at 2:30 am |
  2. George

    MY beliefs say that we shouldn't kill innocent children with drones in foreign countries. Does that mean that I don't have to pay federal taxes because it goes to our military?

    January 13, 2013 at 2:30 am |
  3. reasonablebe

    the foundation of their business is secular make money, profit....as much as possible. they do not sell religion or have a corporate religious affiliation. their claim is bogus.

    January 13, 2013 at 2:25 am |
  4. Lilia

    I don't understand what the problem is. The owner could just shut down his company for his beliefs and thousands of people would be out of a job. If you don't like the company's policies, then vote with your feet and work elsewhere. I don't believe the government has the right to tell someone this specifically what they do or do not have to provide insurance for. What kind of country have we become when we accept government telling a successful businessman what to do? Next, will gov. tell him he HAS to remain open on Sundays? We have the right to shop and work elsewhere, so why not just shut up already and do that instead of trying to make the USA into a socialist country?

    January 13, 2013 at 2:22 am |
    • doofus

      One mouth says "take whatever job you can and get off wellfare" and the other says "just get another job dude"

      January 13, 2013 at 2:30 am |
    • Yessiree

      They are breaking the law. They are making medical decisions for their employees.

      If you don't have a government with the power to regulate and punish businesses, they run amok in very egregious ways. Heck, they do that even when there are laws, as Enron and J.P. Morgan and AIG and Krispy Kreme proved ever so nicely. If you don't force safety rules on corporations, they will surely create unsafe conditions, as they always have. If you don't force labor laws on them, we would quickly be back to the good old days of 100-120 hour work weeks for a few dollars a day, no benefits, no vacations, and too bad if you get maimed.

      If you knew history, you would know that the reason that real communists and socialist (not the bogus ones you claim) were a surprisingly large part of the population a hundred years ago – because corporations treated workers like slaves, and it was only through the government that working conditions improved. And business prospered for treating workers better, interestingly enough.

      In 1932, over a million Americans voted for a socialist or communist presidential candidate. That's 1 out of every 39 voters. All because business owners were treating workers like crap.

      Think about it.

      January 13, 2013 at 2:36 am |
  5. Mike Speakman

    As an Atheist I support Hobby Lobby on this issue. Obamacare is an abomination of a law and needs to be repealed ASAP. It is enlightening how many progressives support the murder of the unborn thereby destroying so much unrealized potential. Then again they seem all too willing to follow the fool Obama. Speaks volumes for their low intelligence levels.

    January 13, 2013 at 2:20 am |
    • doofus

      Ensuring we're allowed the freedom to choose what we think is best for our own lives has nothing to do with religion. It has everything to do with our rights as human beings. No organization should be allowed to dictate to their employees what is right and/or wrong. While I personally don't support abortion, or the general concept of it (arguments can be made in regards to the "morning after pill" being abortion) I don't believe it's anyone's place to tell me what I am and/or am not allowed to do with my own life. I like to call that freedom... you know, one of those silly things this country was founded on...

      January 13, 2013 at 2:26 am |
    • usmc1999

      doofus, the company is not stopping anyone from getting an abortion or from buying birth control. they are simply saying since they do not believe in either, they prefer not to pay for either. how is that infringing on the personal rights of the employees???

      January 13, 2013 at 2:37 am |
    • Throut

      The health care is part of the pay package the employees EARN. The company does not own it or pay for it – it is paid for by the employee's labor. No employer should have the right to limit your medical options.

      Do you want your Jewish boss to make you get a circumcision because that is his religious freedom? Doesn't sound like such a good idea anymore, does it.

      January 13, 2013 at 2:48 am |
  6. doofus

    $5 says if it were a Muslim based for-profit Business pushing it's life-style choices/beliefs on Christians everyone supporting Hobby Lobby's stance would drop a twinky the color of purple.

    January 13, 2013 at 2:15 am |
    • Yessiree

      No doubt about it. Christians only support this because it is a Christian talking point. If it were a muslim business doing the same thing, it would be the Christians screaming bloody murder.

      January 13, 2013 at 2:19 am |
    • usmc1999

      how is the company pushing its beliefs on anyone? they don't agree with the law for their own religious reasons and as a result feel they should not pay for it. that isn't pushing anything on anyone.

      January 13, 2013 at 2:39 am |
    • Jimme

      doofus, I seen you quoted the bible, in one reply and in another you scream for the freedom and that the business should not have the right to dictated to it's employees. What do you call what our Government is doing to them, is it not the same thing you claim Hobby Lobby is doing to its workers? But the difference is, you and others have a CHOICE to NOT work there, but when the Government makes it law then there is NO CHOICE. You are loosing your rights and don't even know it. And now I understand the name.

      January 13, 2013 at 2:54 am |
  7. Hobby Lobby with Values

    Jerome, Don't try so hard! It is hard for people with no values to understand value driven motives. I am thankful that someone is willing to stand for their values. Abortion is a moral issue. We live in a society that is morally bankrupt. My wife, my daughter (which we choose not to abort) and I was just there today. We will continue to show our support.

    January 13, 2013 at 2:12 am |
    • doofus

      And if a Jewish boss told a Christian they couldn't believe Christ was their Savior and the son of God, you'd be OK with that? Freedom is freedom. You, and certainly no for-profit business is allowed to dictate to anyone what they believe, what they choose to follow, or what life choices they make, no matter how wrong those choices are. It's not your place to judge. Or have you not read the Bible? You're welcome to believe what you want... you're just not allowed to dictate what other people believe either. That's what we call freedom of choice.

      January 13, 2013 at 2:18 am |
    • reasonablebe

      note that you indicate you only have 1 child..... so likely there has been some form of birth control.

      January 13, 2013 at 2:27 am |
    • The Rev. Marcus Goodswell

      Now how about you adopt a couple children as well....you know – the ones that nobody wants.....
      Because if you fine folks have your way, the states will need the resources freed up for the tide of unwanted kids.

      Forcing a mother to have a child she doesnt want or cant care for, might just make her turn to the church for support, right?, and while the mother isnt important to the church, the child is – a potential zealot and long term cash source right?

      If she can prevent the pregnacy, or can abort, it will save tons of misery for her and the kid...and might make it so she can be have kids at a later date when she's ready and more secure financially.

      But that wouldnt create the desperation the churches thrive on eh?

      January 13, 2013 at 2:28 am |
    • Honest John

      No, this is more like a Jewish boss saying that he won't buy his employees Christmas hams.

      January 13, 2013 at 11:15 am |
  8. Hobbly Sloppy

    It is easier for a rich corporation to go through an IRS tax loop hole than a rich man through the gate of heaven.

    January 13, 2013 at 2:05 am |
  9. donner

    In ten years, there will be no Republican party. And stupid sh-t like this will be the reason why.

    January 13, 2013 at 2:03 am |
    • Zingo

      There will always be a republican party, because half of the population will always have an IQ lower than 100, and they need to vote too.

      January 13, 2013 at 2:07 am |
    • Deborah

      Donner.....you are one scary individual...Do you live with your parents so you don't have to work? You think the Govt. should be our parents??????

      January 13, 2013 at 3:01 am |
  10. mike m

    It appears that the Hobby Lobby owners got confused by the phrase "one nation, under God" in the pledge of allegiance. The reality is, we are one nation under law, not God.

    It's time to go back to the original pledge of allegiance which said nothing about God. America, one nation under Law.

    January 13, 2013 at 2:01 am |
  11. Martin

    Oh well, if they don't want to play the game then I won't participate either - another customer's out of here.

    January 13, 2013 at 2:01 am |
  12. Hobbly Sloppy

    Hobby Lobby should move its corporate HQ to China where abortions and contrapceptives are already provided by the government so that HLobby won't have to use a healthcare plan against its religious beliefs. HLobby only have to move its HQ, since its manufacturing operations are already in China.

    January 13, 2013 at 1:59 am |
  13. CJ in Cali

    Just an idea for the HL people... sell your company to someone who will actually run it like a company, not an undercover church.

    Or franchise all the stores – according to the numbers given, there's about 25-30 employees per store. Individually, each would qualify for the exemption for companies with less than 50 employees.

    January 13, 2013 at 1:58 am |
  14. Hunter Henry

    hahahha... I shopped at Hobby Lobby. They were very religious, up to the point where I returned a picture frame whose hooks had ripped off. I explained to the store manager what had happened. She said the built in hooks for the picture frames were there for show, and not to be used to hang the picture frame with. Kinda like GM say to you, "we put the ties on the car for show, they are not meant to be used when driving". After an argument that involves a few words that involved "God" (as in gold darn) by the manager, which I replied in kind, all religious observations went out the window. I don't shop at Hobby Sloppy anymore. I wish they could take their money with them when they go to hades, along with the people running Chick Fil A.

    January 13, 2013 at 1:51 am |
    • Hunter Henry

      above, it should say "tires", not ties....

      January 13, 2013 at 1:52 am |
  15. Topher Debates a Chicken . . . and Loses.

    I'm having a real problem. I want to boycott Hobby Lobby, but I don't buy silly bogus useless crap, so I have never been in the place before.

    I ran into the same problem with Chik Fil A. I never by deep-fried fatty slop on a bun, so I never eat there.

    Is there a Christian business that actually sells something of quality where I might have actually gone, or are they all these bottom-of-the-dumpster retail slums?

    January 13, 2013 at 1:47 am |
  16. Hobbly Sloppy

    Ain't religion great when it can be used to enhance corporate profits. ???

    January 13, 2013 at 1:37 am |
    • Hunter Henry

      My thought exactly. It's convenient when suddenly, "because of religious beliefs", we found a way to save us beaucoup money. I hope when the people running Hobby Lobby die, they are welcome with open arms by the devil. No way Jesus would take these greedy folks.

      January 13, 2013 at 1:46 am |
    • A Fairy Tale, not about any real person

      Once upon a time, there was a greedy money-obsessed porker named Porky. Porky made 4 billion dollars selling crap at inflated prices while paying poverty wages to his employees. Porky was just ever so Jesusy, just aglow in his Jesus-loving mountain of money.

      One day, dear old Porky died is a horrible auto-erotic asphyxiation accident involving vaseline, vibrating objectss and nipple clip. He finds himself at the Pearly Gates, whereupon Jesus arrives and says "Porky! We have been waiting for you! Heaven is right there only a few feet away! All you have to do is go through this entrance"

      And Jesus points to the tiny eye of a needle . . .

      Poor Porky.

      January 13, 2013 at 1:58 am |
  17. Sue Perlative

    So what kind of health insurance do they furnish to their employees? Are there some kinds that don't include abortifacient contraceptives?

    January 13, 2013 at 1:34 am |
    • Jethro Bob Ubermench

      Their health care is a faith-healing session. Then they speak in tongues. Much better than those communist doctor guys.

      [youtube=http://www.youtube.com/watch?v=X3be9wCAwIM&w=640&h=390]

      January 13, 2013 at 1:41 am |
  18. Joe B

    If Hobby Lobby can deny contraception coverage based on religious principles then...

    A company owned by Scientologists can deny psychiatric coverage...

    A company owned by Jehovahs Witnesses can deny blood transfusions...

    A company owned by Christian Scientists can deny all medical coverage...

    January 13, 2013 at 1:34 am |
    • bannister

      Yup. It's called a free society. Why are you so afraid of it?

      January 13, 2013 at 2:33 am |
  19. Jude

    i no longer shop at hobby lobby...it's now up to their supporters to continue to keep them in business and i'm sure those shoppers will happily pick up the slack by spending more of their hard earned $$$. if not, this big box will get smaller and smaller to more accurately reflect it's diminishing ideology. that's business and the power of choice.

    January 13, 2013 at 1:28 am |
    • Bill Richardson

      You see how well that worked against Chik Fil A. Go ahead, they don't need your few dollars and coupons.

      January 13, 2013 at 1:42 am |
    • Jude

      a few dollars add up...and regarding chik fil a...gross.

      January 13, 2013 at 11:09 am |
  20. StuporDave

    If you actually believe you're saving money shopping at big box stores, you're actually responsible for much of our economic woe. Yes, prices on individual items are likely lower than elsewhere, but any money "saved" is probably spent on something you did not intend to buy. This is the takeaway: The money you think you saved today may cost someone his/her job tomorrow – that someone could be you.

    January 13, 2013 at 1:13 am |
    • Osbourne

      You are going to look at that post in the morning when you sober up, and you are going to cringe.

      January 13, 2013 at 1:21 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.