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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 • Faith Now

soundoff (4,609 Responses)
  1. Dave

    Use your company to push your religious beliefs (on your employees or customers) and you will have forever ruined its reputation.

    January 12, 2013 at 6:27 pm |
    • Live4Him

      Many people want to work for Hobby Lobby – BECAUSE they are Christian based. I choose to shop there instead of other places that offer similar items – even though it is a longer drive for me.

      January 12, 2013 at 6:33 pm |
    • erivera63

      You are so full of it Live4Him...Hobby Lobby pays minimun wage and they sell crap from china..I doubt people run to those jobs because of their religion..They work there because its the only job they can find... And I doubt people shop there because of their stance on contraceptives..They shop there because their stuff is cheap..

      January 12, 2013 at 8:18 pm |
  2. charles

    I love Hobby Lobby!

    January 12, 2013 at 6:27 pm |
  3. Jules

    So they really didn't find a way around purchasing health insurance for their employees, they just delayed it. A good reason not to shop at Hobby Lobby.

    January 12, 2013 at 6:27 pm |
  4. CHadwick

    HOBBY LOBBY BLOWS VOMIT AFTER VOMIT.. I went in there the other day thinking they could have parts too my remote control airplane thinking it was a Hobby place, all they had was everything Wal-Mart is got like art and crafts stuff. They need to change the name of the store to some Craft store or something cause they aint got jack for people and their hobbies, bunch of con artist, wanna be mafia, owners who will go to hell. store.

    January 12, 2013 at 6:27 pm |
  5. Margie

    Shop Hobby Lobby

    January 12, 2013 at 6:27 pm |
  6. TonyT

    I think the real problem here is not religion, healthcare, or government. It is the IRS which was not ratified by the states and we continue to suck it up and pay. Even when we try to fight them we have no choice but to pay. I got a notification saying I owed $14,000 in back taxes. I re-sent the info to show that I didn't several times and still they told me I owed. Even three accountants and a tax attorney said I was right. Went to court and the judge ruled in the favor of the IRS. After paying the courts and attorney, I lost my job to china and called to ask for some kind of mercy. They basically threw me away like garbage and said I have to pay. I am waiting for them to throw me in jail for not paying and then my family can live off the system.

    January 12, 2013 at 6:27 pm |
  7. Winston Wolf

    Send lawyers, guns, and money.

    January 12, 2013 at 6:27 pm |
  8. Aerin

    Boycott Hobby Lobby. Who do these dictators think they are.

    January 12, 2013 at 6:26 pm |
  9. corpsman

    Funny, I don't remember Jesus teaching anything about abortion in the four gospels. Nevertheless, another business putting their religious beliefs before their country.

    January 12, 2013 at 6:26 pm |
  10. 1nd3p3nd3nt

    the company wants their compensation for their employees to only be spent the way they want it to be spent.
    sounds like they don't want freedom, they want a dictatorship.

    i suppose they wouldn't want employees to spend the money they make working for them on birth control either.
    so when does an employee get to make a decision about their own lives?

    January 12, 2013 at 6:25 pm |
  11. cc

    So Hobby Lobby's 'religious liberty' includes the right to make religious decisions on behalf of their employees? This sounds more like a return to the 'master knows best' days...I'd quit if I worked for Hobby Lobby.

    January 12, 2013 at 6:25 pm |
    • are122

      right to make religious decisions on behalf of their employees? <~~~ This is REALLY funny! Obama makes the rules, makes all the decisions on behalf of the sheeple then exempts himself, the rest of the politicians and pals in unions out of it. Funny post of the night.

      January 12, 2013 at 6:28 pm |
  12. DC

    If another place provides a better benefit you desire to work, go work for that company. It should not ever be a mandate for any company to provide any healthcare.

    Freedom of choice is what you want? I choose to own a gun but your libtards are doing your best to take that choice away from me. Hypocrites. .

    January 12, 2013 at 6:25 pm |
    • Republicanisacurseword

      Right, because there's a clear connection with your "right" to own a death machine and my "right" to proper healthcare. Go back to stroking your rifle.

      January 12, 2013 at 6:35 pm |
    • DIaneRPCFL

      . . . ok contard – are you volunteering to write the obituaries of more five year-old who've died for the sake of your gun rights?

      January 12, 2013 at 6:37 pm |
    • Merle McClung

      This issue is not about religious beliefs, it's about equal rights for women. These same employers provide male employees with health insurance that covers vasectomies 100 percent so they don't have kids, why can't they give women equal coverage?

      You think they won't come after your guns if they take a mind to? What if they say they will not provide major medical insurance if you have a gun in your home? They could quote some religious passage or some statistic that says since you have a gun in your home, you are more likely to have an accidental shooting or an attempted suicide. What's the difference? They would be denying you benefits based on your choice. They would be dictating to you your rights. Roe v. Wade is the law of the land just as much as the Second Amendment is and Roe is a lot less ambiguous.

      January 12, 2013 at 6:37 pm |
  13. NC Guy

    Once again this is not about the law but about control. Obama and his little minions who passed his wonderful healthcare law are lording it over industry. $1.3M/day fine because I don't like how you run your business. Close down, move offshore and tell Obama to shove it.

    January 12, 2013 at 6:24 pm |
    • Stephen Daedalus

      You're funny! Not very bright, but funny.

      January 12, 2013 at 6:25 pm |
    • Scott f.

      The control is coming from h.l. That's what these religious taliban are all about, control and domination over women any way they can arrange it.

      January 12, 2013 at 6:28 pm |
    • Zowi

      Yeah because business owners trying to CONTROL their employee's PRIVATE medical prescriptions isn't at all overreaching. Or should any and all religious beliefs be on the table. How about blood transfusions, or vaccines? Should your employer NOT provide that in their coverage to you because of THEIR personal beliefs? Sorry dude dying on the table, your employer doesn't believe in surgery so you aren't covered, you can die or spend $100,000 to pay for it yourself.

      January 12, 2013 at 6:28 pm |
    • DIaneRPCFL

      Yes, please do move offshore and watch it go bankrupt . Most rational people in other parts of the world – who are quite happy with their universal healthcare – would boycott this retailer out business because of disgust and contempt for ramming it's fundamentalist religious ideology down the throats of its employees.

      January 12, 2013 at 6:32 pm |
    • GTA

      Obama and his minions? You mean Congress?

      Why are you so concerned about Obama controlling this situation but apparently have no objection if a company exercises the same type of control? What if Obama objected to providing birth control but the company had no problem with it? Would you have the same point of view? What if the company objected to paying for blood transfusions?

      January 12, 2013 at 6:33 pm |
    • Merle McClung

      Might as well because I bet a whole lot of people won't be shopping there anymore.

      January 12, 2013 at 6:39 pm |
  14. ratbuddy

    Where do we draw the line? What about a business owned by a religious nut (aren't they all?) whose faith doesn't allow doctors? Would they be exempt from providing any coverage at all?

    The religion defect is a serious drain on the world, and the sooner we all get over it, the better.

    January 12, 2013 at 6:24 pm |
    • DaveB

      So lemme guess: you're an atheist?

      January 12, 2013 at 6:26 pm |
    • NC Guy

      Why should employers provide healthcare at all? Pay your own damn bills, I pay mine.

      January 12, 2013 at 6:26 pm |
    • Anthony

      Can't argue with logic. I also don't agree with the exemptions for "Primarily" religious. If they have a group plan, and most of the people don't use those services or products then the group plan will cost less. You don't get to decide what the minority in your employee ranks does with their lives. THAT IS Freedom of religion. Why is that not hard to understand?

      January 12, 2013 at 6:30 pm |
    • Zowi

      @ NC Guy – Employers are paying for the health insurance because the GOP wanted it that way – government run healthcare is socialism after all.........

      January 12, 2013 at 6:31 pm |
  15. ramos

    You just lost another customer Hobby Lobby!

    January 12, 2013 at 6:23 pm |
    • Bill from Long Island

      Ramos: Now if we could only lose you as a citizen, we be all set.

      January 12, 2013 at 6:27 pm |
    • infavor

      gained one in me

      January 12, 2013 at 6:29 pm |
    • ranlo

      YOU JUST GAINED ANOTHER CUSTOMER HOBBY LOBBY! RIGHT ON!

      January 12, 2013 at 6:31 pm |
    • Zowi

      Never shopped there, never will. Why? Because you are either idiots who actually believe you should be able to wield your ridiculous religion to force your beliefs on to your employees, or you are being cheap. Either way you are a bad employer and I feel sorry for anyone who has no other options than to be part of your business.

      January 12, 2013 at 6:34 pm |
    • erivera63

      It's a lot easier to NOT shop there,than it is to ALWAYS shop there.. I mean, how much cheap ,made in china hobby crap does one need?...They will learn what a stupid decision they made thanks to the media attention and have to give in , much like Chik-a-fil did..A smart businssman knows not to mix personal belief with making money..

      January 12, 2013 at 8:28 pm |
    • pattysboi

      Me too. I went there ONCE, and was not impressed at all. Now with this, it seals the deal. Nope. Wife and I won't shop there.

      January 13, 2013 at 2:39 am |
  16. Bev

    Perhaps Hobby Lobby should look more at their employees who would use these drugs....

    January 12, 2013 at 6:23 pm |
    • pattysboi

      Maybe YOU should get a life, and mind your own business.

      January 13, 2013 at 2:36 am |
  17. johnQ

    Wouldn't it be easier just to give you employees the choice of what they want and don't want as far as health coverage. Do you screen your employees when you hire them to make sure they have your religious believes. Maybe you can turn your stores into temples and use the take loopholes churches get.

    January 12, 2013 at 6:23 pm |
    • Scott f.

      They do not want any woman to have a choice, pverty, suffering and death of women is what they want.

      January 12, 2013 at 6:30 pm |
  18. Travis

    a company that wont let the government bend it to their will, no way!

    January 12, 2013 at 6:23 pm |
  19. Morgue 13

    If the company chooses not to provide birth control, then they also should not provide for Viagra or any of those types of drugs either. Maybe they should also ban the employees for drinking alcohol and they should not open Sundays since according to the bible, its the day for resting.

    January 12, 2013 at 6:23 pm |
    • Tony

      Actually Morgue 13...First of all I don't agree with the stance that Hobby Lobby is taking, but they are closed on Sunday's.

      January 12, 2013 at 6:27 pm |
    • Travis

      A company should be able to press such things upon an employee no more than a government should press things like providing controseptives onto buisnesses. I say good on to the hobby lobby

      January 12, 2013 at 6:27 pm |
    • Zuke

      They aren't officially open on Sundays, but they sure do have employees working there on Sundays.

      January 12, 2013 at 6:27 pm |
    • Zuke

      You might have a point, Travis, except this is part of healthcare, and contraceptives are used for a variety of ailments besides preventing conception. You seem smart. You should know that.

      January 12, 2013 at 6:30 pm |
    • rational minnesota

      Hobby Lobby isn't open on Sundays, so they already have that one in place.

      The issue comes down to religious freedom. The companies owners claim that providing certain coverages violates their freedom. One could counter that failure to do so violates their employees' freedoms. In that case, I would think we should support the legally enacted policies until such time as they are changed. If we don't, we set precedent for any employer to selectively remove specific services on claimed religious grounds.

      Imagine someone covering regular check-ups, dental, and eyeglasses, but refusing cancer treatment for a child because they believe in faith healing only. Do we want that door open?

      January 12, 2013 at 6:30 pm |
    • Vimous

      They are closed on Sundays. It is stated in the article.

      January 12, 2013 at 6:33 pm |
  20. Andy

    Too bad, have really liked shopping at Hobby Lobby -such a poor excuse for trying to do their employees out of health care – jerks! Corporate greed sure sucks!

    January 12, 2013 at 6:23 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 and Eric Marrapodi with daily contributions from CNN's worldwide newsgathering team.