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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. Leif

    Christian Scientists don't believe in medical science at all. So, all any business has to do is to declare its devotion to Mary Baker Eddy. Then they can argue that they should not have to pay for any form of health coverage.

    January 13, 2013 at 4:08 am |
  2. Wakey Wakey

    So here are a couple questions for all you people who keep accusing the government of socialism:

    When there is a fire in your house, do you refuse to call that socialist fire department?

    When you are attacked, do you refuse to call those socialist policemen?

    Do you drive on dirt to avoid those socialist roads?

    Do you refuse your socialist-delivered mail?

    Do you urge disbanding of all the armed forces, socialist institutions that they are?

    Seriously, what you are defining as socialism isn't even close. It's pretty stupid, actually, and what it really says is that you are so unable to think for yourself that all you can do is revomit propaganda that you don't have the sense to see is just damn fool nonsense. You being the damn fool.

    January 13, 2013 at 4:06 am |
    • cm

      Those aren't socialist services, those are services that I agree to have my taxes go towards. Socialism is about redistribution of wealth and forcing hard working people to pay for the lazy. Period. end of story.

      January 13, 2013 at 4:08 am |
    • Wakey Wakey

      You agreed? When were you ever given the choice?

      I see that for you, government services are only socialist if you don't like them, because nothing about this particular story fits your definition of socialism.

      January 13, 2013 at 4:11 am |
    • taintright

      Great! One of your fellow employees want plastic surgery. Are you willing to pay a higher health premium to cover a voluntary surgery that they want? Who's the fool now? Idiot – the expense of more coverage gets passed on to everyone and the insurance and medical/pharmaceutical businesses get richer.

      January 13, 2013 at 4:13 am |
    • cm

      When I decided to work and pay taxes ,rather than collect welfare like so many democrats and socialists out there.

      January 13, 2013 at 4:16 am |
    • Wakey Wakey

      Studies have found that there is only a 2%difference between the unemployment rates of democrats versus republicans, and of course the vast majority of both work. So you are lying. And of course you never were given the choice of what government services you funded, and going to work is not a choice of services. So you are lying again.

      But at least you are consistent in your delusional lying.

      January 13, 2013 at 4:24 am |
    • Klight

      First, most funds used by fire departments are from local or state taxes (some fire departments even have volunteers and special fundraisers to help save/raise funds for the department) so the comparison of social welfare to a fire department service is completely absurd.
      Secondly, funds going to an armed services division aren't social funds, they're military funds meant for the defense of the country. Money spent on defense isn't (I should say shouldn't be) for any social or political agenda. Simply defense of the country. And military spending theoretically doesn't interfere with a company's business operations.
      And last, this is mainly about the government telling a business what to do with their business. Now I personally think that birth control is a wonderful thing. I think it's so great that I am willing to pay for it myself. This whole debate is centered around women's right versus religion freedom. I think that's ridiculous. It should be centered around personal choice and responsibility. A company should have the right to determine what they'll pay for and what they won't. You as a consumer and employee have the right to buy your products from the companies in which your personal beliefs fall in line. You work where the benefits suit your needs. I personally don't care if hobby lobby gives away birth control, so I'm indifferent. It is amazing how a free market works.

      January 13, 2013 at 4:30 am |
    • cm

      You are yet wrong again. go to world wide web.super-economy.blogspot.com/2012/02/do-welfare-recipients-mostly-vote.html to get enlightened. Among the Long Term Unemployed,"72% of the two-party support for welfare goes to Democrats". Couldn't find your 2% quote. But nice try. And going to work isn't a choice of services, I agree, it's a choice on whether I PAY for those services which is what I said to begin with. But again...nice try.

      January 13, 2013 at 4:33 am |
    • Wakey Wakey

      It's the same number, cm. Because the percentage of the populace on welfare is 4%. That means at worst, it's 1%republican, and 3% democrat, a 2% difference. And the vast vast majority of both work.

      Thank you for proving my point.

      As to Knight, are you really going to say that the fact that it's state GOVERNMENT instead of federal GOVERNMENT makes it not socialist? Really? You want to go with that? You want to pretend that defense is NOT a social program? Really?

      There must be someone to limit businesses, or you will have monopolies and enron scams and financial meltdowns galore, as history has proven perfectly. Were there no labor laws and no government to enforce them, your work week would be double and your pay a fraction ofwhat it is, nothing to stop dangerous work conditions, nothing to stop dangerous products, no recourse if you get maimed on the job.

      Sorry, but history has proven you fantasies to be wrong. Businesses act like ruthless greedy monsters if unregulated.

      January 13, 2013 at 4:52 am |
    • cm

      Wakey, your argument is wrong again, if you look at the chart, you will see that of the people collecting welfare and or unemployment , over 60-65% of them are democrats. So while the number of unemployed is Half and half, there are a lot more democrats on social services across the board. Look at the bar chart.

      January 13, 2013 at 5:09 am |
  3. neddiejo

    Exactly why I no longer shop at my favorite craft store, Hobby Lobby!

    January 13, 2013 at 4:05 am |
  4. Doug

    What a disgusting story.. So this company is proud they have been able to rip off their workers.. Really.. Hey America, shoplift everything you can from this company and claim religious beliefs like they have ..

    January 13, 2013 at 4:04 am |
  5. John Tighe

    So what's next?
    Will a business owned by a Jehova's Witness tell his employees that they can't get blood transfusions?

    January 13, 2013 at 3:57 am |
    • Damocles

      @john

      Oh, no, see that won't be allowed to happen because... you know... JW is a cult and all.

      Ahahahahaha.

      January 13, 2013 at 3:59 am |
  6. cm

    Tell you what. how about they just cut everyone down to less than 28 hours a week, get rid of the health plan completely. That's the better loophole.

    January 13, 2013 at 3:57 am |
    • Fred

      Apparently they already do that with most of their employees.

      January 13, 2013 at 4:25 am |
    • cm

      Well Fred, then maybe they should do it with the remaining workers who are demanding BC coverage.

      January 13, 2013 at 4:51 am |
  7. Sabrina

    So much for employees taking care of their workers.
    Get as much work out of people at the lowest price possible.
    It's about greed that has been taking over more and more with each decade!

    January 13, 2013 at 3:53 am |
    • cm

      take care of their employees? why can't the employees keep their legs closed? Why does someone else always have to take care of other people who are too stupid to not get pregnant when they can't handle it?

      January 13, 2013 at 4:03 am |
  8. Kevin

    You know, the instant you see a righty use the word socialism, you know you are dealing with an IQ somewhere below Gump who gets all his ideas from the propaganda radio he bombards himself with all day long.

    January 13, 2013 at 3:50 am |
  9. doofus

    $5 says all the Hobby Lobby supporters would be droppin' purple twinkies if this news article was about a Muslim run business trying to tell Christians what to do with their lives. Freedom doesn't only apply when someone's opinion matches yours. Just because you don't agree with the choice being made doesn't mean you have the right to halt that choice.

    January 13, 2013 at 3:45 am |
    • Damocles

      *sigh*

      Now I can no longer have fond memories of twinkies.

      January 13, 2013 at 4:02 am |
  10. Merlin

    This is not an issue of religious liberty. When someone creates a business and garners profit, they are treated the same in the eyes of the law as are other business. The person is not exempt because of personal beliefs. The first amendment does not grant special privilege for being more pious than your neighbor.

    A person cannot murder another person and claim to be exempt because it adheres to their religious beliefs. Nor can this person refuse to pay taxes or abuse children under the same defense. There is no "God told me to" as a defense in court, except as an insanity plea.

    January 13, 2013 at 3:44 am |
    • jmpgfoto

      HOW RIGHT YOU ARE! If these greedy robber barons want to make it all legal they can make their business a charitible not for profit and use all of the money to help their employees! Of course it will be a cold day in Hell when these rich scrooges give up any of their profits! I say boycott the stores until they see the Divine Light!

      January 13, 2013 at 4:15 am |
  11. jordan gulinson m.d.

    An employer has the right to determine the "cafeteria" of benefits they offer their employees, not the other way around. And for the government to dictate that "cafeteria' is socialism. If you are big on the latter, you need not learn from ancient history, become more intelligent and aware how europe is faring with socialism as part of current history And by the way, the emploee can vote with their feet if they do notlike their choices, realizing that in the current stunted Obama economy, an alternative job will be hard to find-their choice. have not heard of the company having lost employees.

    January 13, 2013 at 3:43 am |
    • CHUCK

      Thank you for a sensible comment, made thoughtfully and intelligently, seriously.

      January 13, 2013 at 3:49 am |
    • Kevin

      So you forgot that the economy tanked under W, did you?

      January 13, 2013 at 3:51 am |
    • markie

      my reply to Jordan: This is not the case of religious "liberty" Hobby Lobby should let its employees DECIDE-not itself. That is the right wing way. If you think it is socialism...oh well...that is not the case. The government needs to establish rules not Hobby Lobby. A birth control is not an an abortion pill.

      January 13, 2013 at 4:03 am |
    • Damocles

      You're an MD? Yikes.

      January 13, 2013 at 4:04 am |
    • jmpgfoto

      Your response proves that not all M.D.s are well educated or intelligent! The problem with your ignorant and absurd argument is that the point is not whether the tail wags the dog or the dog wags the tail (employees vs employers), it has to do with the law of the land and the Affordable Care Act IS NOW the law of the land whether you or Hobby Lobby like it or not! By the way there doc, are you one of those price gouging saw bones who is afraid of having your fees regulated by the new healthcare law? Just wondered what your stake is in this matter.

      January 13, 2013 at 4:20 am |
    • jordan gulinson m.d.

      I am replying to "poor " Markie who can not get it through his limited comprehension that employers decide benefits and employees decide to take or stay with the job or pass it up.. When they took the job, they were not promised birth control pills and still took the job. How Come? Maybe the next emploee demand should be Viagra?

      January 13, 2013 at 4:22 am |
    • Tom, Tom, the Piper's Son

      Things change, "Doc". Laws change. This one changes what companies are required to do. So what?

      January 13, 2013 at 11:24 am |
  12. taintright

    Tim – FYI regarding definition of socialism and communism. They are alike in that both are systems of production for use based on public ownership of the means of production and centralized planning. Socialism grows directly out of capitalism; it is the first form of the new society. Communism is a further development or "higher stage" of socialism. Socialism is the first step in the process of developing the productive forces to achieve abundance and changing the mental and spiritual outlook of the people. It is the necessary transition stage from capitalism to communism.

    January 13, 2013 at 3:40 am |
    • Theoretically

      That's only if you believe Marx, who also said revolutions would come from an urban proletariat. Which except for the fact that they never came from an urban proletariat is totally true. Not.

      January 13, 2013 at 3:46 am |
    • CHUCK

      And what is your point; do you really believe we have to change from capitalism to communism? Since the most successful communist country is Cuba or China, and in one, the people don't have enough to eat, and are doing without basic necessities and in the other, they are finding they have to change to methods of capitalism to survive, and they even control how many children someone has by killing full-term infants, I don't think I see the beauty of "transitioning"!

      January 13, 2013 at 3:47 am |
    • taintright

      Chuck – I was replying to Tim's comment regarding socialism and communism. I support capitalism and do not think the government should tell companies what kind of "cafeteria" health plan businesses must provide. If I were an employee having insurance premiums deducted from my pay, I would not want to pay more for something I do not use/need.

      January 13, 2013 at 4:08 am |
  13. headro

    since they can't discriminate when they hire, they must allow their employees access to birth control whether Hobby Lobby believes in it or not. On a side note, it was amazing how many companies didn't want to pay any type of health care for the employees who work for small wages, who can't afford health care and miss more work than they should because they don't have access to affordable care. A healthy organization is a thriving organization. Common world, ante up and provide health care so the government can help those who need it.

    January 13, 2013 at 3:39 am |
    • cm

      Why can't women just keep their legs closed? That's the best birth control out there! Why the heck does someone else always have to take care of stupid peoples mistakes? Instead of providing birth control, they should be providing abstinence training, especially for the low income.

      January 13, 2013 at 4:02 am |
    • Damocles

      @cm

      Why not advocate guys keeping it in their pants?

      You seem keen on blaming only women and then denying them choice.

      January 13, 2013 at 4:06 am |
    • cm

      ummm, maybe because GUYS DON'T GET PREGNANT!!, I agree that guys should also keep it in their pants, but it comes down to the lady (excuse the pun). She has the final word on opening the gates.

      January 13, 2013 at 4:09 am |
    • Marky

      I never had a job that provided birth control; that was our responsibility as a couple. Fertility treatments were our responsibility, as well. So were well-baby checks, immunizations, and a host of other things people "demand" as their right now. Yes, I even worked for the state at one time, as well as working for a hospital and for doctors. Everything shouldn't be someone else's problem to pay for; businesses like Hobby Lobby–excellent companies to work for (talked to some of their employees), considerate of making certain they have Sunday off to spend time with their families, and they have even been able to five raises when the government is slashing salaries for teachers, and other companies are going under and employees losing their jobs as a result. WHY do we feel the need to be so petty and actually try to run a successful company under because a very few employees will even want to use the services being discussed, and really? Why would I rather see so many people out of work because the petty people and the than let this company (which provides many wonderful benefits, just not certain types of BC) chose to not provide something they believe is wrong? People can go to work wherever they want to apply and are accepted. You have a right to apply for a job, not a right to demand you get hired and get paid what you want and have all the various benefits your heart desires! This whole witch-hunt is ridiculous! Don't apply if you don't want what a business offers.

      January 13, 2013 at 4:11 am |
    • Damocles

      @cm

      I gotcha.... makes sense because no guy has ever lied to get some and no ra-pe has ever taken place. Hell just cover them in burlap sacks and call it a day.

      January 13, 2013 at 4:13 am |
    • cm

      Damocles, I've typed this like 3 times now, then realized that Ra-pe is probably filtering it out. Anyways...Ra-pe is a completely different story. There you get a morning after pill under emergency services anyways. We're talking about prescription BC pills and abortion. Those should be paid for by YOU since YOU are responsible. I am pro choice, and I'm pro choice all the way. i.e. nobody should HAVE to pay for YOUR mistakes..That's THEIR choice. Just like it's YOUR choice to wear a rubber and/or take BC pills that YOU should pay for. As for the guy lying...how does that work? "honey..it's not inside...trust me..."???

      January 13, 2013 at 4:41 am |
    • cm

      And one more question Damocles, if the company told it's employees it was going to start deducting part of their salary to pay for a pro-life advertisement or maybe to provide healthcare for illegal aliens, how would you feel about that? is that ok? I mean you want to take their money to pay for the things you want, how about letting them take some of your money to pay for the things they may want.? I mean it's only fair right?

      January 13, 2013 at 4:46 am |
  14. jeebus

    Nice to have a corporation claiming religious liberty. After all, corporations are people! LoL

    January 13, 2013 at 3:38 am |
  15. g vick

    The US is quickly turning into a socialist country, where the government forces people and businesses to do everything the government says to do. Businesses can not even decide for themselves what kind of health insurance that they provide for there employees.
    Businesses are forced by the government to buy something (insurance). What happened to free enterprise? If an employee did not want to work for a company they simply should work (and shop) someplace else, that is supposed to be how the US works and prospers. I for one am going to go out of my way to give more business to Hobby Lobby, and any other business which stands up for there rights to conduct business in a free american manner. Whats next from the government?... regulating what names we can name or children? (if you think I am kidding, look at some socialist European countries, you can actually only name your children from approved list of names, that is where the US is heading.
    Why should anyone be forced to buy health insurance or anything at all? What happened to a free market, where you buy what you want or dont by what you dont want?
    Obama policys are very destructive to business, just like the other extreme liberal views of the California government, which is completely destroying business in California. Its liberal socialism, combined with out of control spending by democrats, which will probably bankrupt the US.
    The government should stay out of peoples personal business, and enforce laws that enfringe upon other peoples freedoms, and force people to buy products that they dont want.... that is for the free market to decide.

    January 13, 2013 at 3:38 am |
    • g vick

      Why should the government be forcing anyone to buy something? (Health insurance).
      Since when is it the governments right to control the free market (commerce)?
      So the government is now going to determine what is best for all of it's children...
      And interfere with a company's right to religious purity.

      January 13, 2013 at 3:46 am |
    • doofus

      I stopped at the first sentence. The government is actually making sure the American employee is allowed their own personal freedom. Sorry if the choice being made doesn't fit your personal beliefs (or mine, if that matters).

      January 13, 2013 at 3:47 am |
  16. Iamnotfooled

    I don't believe it's the religious beliefs of the company at all. More like the LOVE of the ALMIGHTY DOLLAR. Or plain GREED!

    January 13, 2013 at 3:35 am |
    • doofus

      but the business will only help pay for the prescription if the employee chooses to go that route. money only comes into play when the bill is served. if the bill is never served because the staff is so righteous then there is no extra cost incurred.

      January 13, 2013 at 3:37 am |
  17. Alvin the Aardvark-hearted

    As an atheist, I hope for the owners' sake that there is a heaven and hell, and Jesus being there to judge them. I would really love to be there when they walk up and Jesus gives them a camel and a needle and says "go for it!"

    January 13, 2013 at 3:34 am |
    • Marky

      From everything I've seen regarding this company (I'm from OK where this company started), and I don't think they would have any trouble "going thru the eye of a needle". The people who started Hobby Lobby have done a great job in their efforts to treat their employees with respect and consideration, and have offered raises when other similar stores did not. Not offering certain types of BC doesn't mean squat when it comes to that particular passage.

      January 13, 2013 at 4:19 am |
    • Alvin the Aardvark-hearted

      Kinda missed the whole biblical "eye of the needle" mandate thing, didn't you. There is no adjustment of Jesus' pronouncement for your claims of treating employees well (their very high turnover and poor employee reviews say otherwise). Jesus is direct: rich = no heaven.

      January 13, 2013 at 4:29 am |
  18. Mongo23

    I have shopped at Hobby Lobby. I didn't know it was a church.

    January 13, 2013 at 3:32 am |
  19. Dave

    Nest the government will force those that don't believe in God to buy bibles, and force vegetarians to buy beef.

    January 13, 2013 at 3:30 am |
    • doofus

      or simply force the business to ensure people have the choice to do what they feel is right for their own life. i imagine you'd feel differently if the opinion of the business didn't match yours?

      January 13, 2013 at 3:33 am |
  20. LR

    Um...did I miss something? Birth control bill aren't "abortion-inducing drugs." Birth control pills, in actuality, may be more correctly termed "abortion-preventing drugs." Hobby Lobby should be all in favor.

    January 13, 2013 at 3:29 am |
    • One

      If you read the article, CNN is calling abortion drugs "birth control" drugs. This is not about birth control

      January 13, 2013 at 3:34 am |
    • doofus

      you'd think. but dictating religious right is top priority to some people :(

      January 13, 2013 at 3:34 am |
    • Sid

      The Christians are a bit reality-challenged on things like "abortion pills" and "the owner pays for it" and "only owners have religious rights" and labor laws and, well, reality.

      It's much easier for them to just say wild crazy things and scream "socialism!!!!" That is why there are things like FOX and Limbaugh: these poor brutes need someone to tell them their opinions everyday, or else they wouldn't have any.

      January 13, 2013 at 3:38 am |
    • One

      Being against killing a baby makes people "poor brutes" Sid?

      January 13, 2013 at 3:41 am |
    • One

      Sid, did you really launch that "Combat Carl"? I thought fireworks were illegal in kommiefornia anyway...

      January 13, 2013 at 3:46 am |
    • Sid

      The pills in question do not kill babies, you astounding nincompoop.

      January 13, 2013 at 3:47 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.