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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. fayray11

    can't have a society if everyone isn't in. Hobby Lobby and their cult leadership should move to some jungle and make juice for themselves.

    January 13, 2013 at 9:37 am |
    • Huff

      Isn't 'IN" what? Submit to the demands of a Govt. mandate without the free will of the people? Sounds like you're all for dictatorships to force a countries population to be 'IN' compliance.

      January 13, 2013 at 9:41 am |
    • just saying

      Don't potential employees have the opportunity to decide if they want to work at Hobby Lobby? It is their choice and if they don't like the health care, they can work somewhere else. That is the freedom of our America isn't it?

      January 13, 2013 at 10:00 am |
  2. Goins

    Hobby Lobby Stores, Inc. is a privately held corporation, not an individual and therefore is not afforded the same rights as an individual citizen. They need to pay their taxes and insurance responsibilities just like the rest.

    January 13, 2013 at 9:36 am |
  3. fayray11

    religion, the biggest scam ever! corporations are people and now also religions. time for this b s to end.

    January 13, 2013 at 9:35 am |
  4. PlainoldWorkerBee

    Muslims are exempt from Obamacare for religious reasons. Why aren't Christians being afforded the same choice? Does anyone else see these as selective discrimination? Or a subtle form of religious persecution?

    January 13, 2013 at 9:25 am |
    • GS

      Shhh....we're not supposed to be talking about Muslims right now, only the Christians.

      January 13, 2013 at 9:28 am |
    • Huff

      Numerous companies have been granted an exemption for Christian religious reasons but most are Democrat campaign donors.

      January 13, 2013 at 9:29 am |
    • AudreyE

      It takes two seconds to Google that and find out it's FALSE (as if any reasonable person would believe it in the first place).

      January 13, 2013 at 9:30 am |
    • Goins

      Hobby Lobby Stores, Inc. is a privately held corporation, not an individual and therefore is not afforded the same rights as an individual citizen. They need to pay their taxes and insurance responsibilities just like the rest.

      January 13, 2013 at 9:37 am |
    • hanson

      Christian churches and certain organizations are exempted. Muslim businesses are not exempted

      January 13, 2013 at 4:32 pm |
  5. G_Edwards

    News Flash!

    Freedom of Religion IS the law of the land!

    .

    January 13, 2013 at 9:24 am |
    • AudreyE

      So is employment law. Hobby Lobby is a store, not a church. Do they get tax exempt status in any other capacity? Nope.

      January 13, 2013 at 9:31 am |
  6. Huff

    How come Hobby Lobby can't apply for an exemption as 100's of other companies have done? Oh wait, exemptions are mostly granted for Democrat donor companies.

    January 13, 2013 at 9:21 am |
    • El Presidente Oboso

      Cuz they're Christians and we don't like them.

      January 13, 2013 at 9:23 am |
    • AudreyE

      Gosh, I'm so tempted to believe that with absolutely no evidence whatsoever, but maybe I'll just kinda invite you to back that up. How about a list of every company granted an exemption, followed by a list of donations they made to both campaigns. Or just quit talking. Whichever.

      January 13, 2013 at 9:33 am |
    • Huff

      @Audry, there are nearly 1700 exemptions to Obamacare granted. Of those 68% are union. Not many unions donate to Republicans. I can show links to support this and I'm sure you could show some liberal blog that says otherwise. Point is, do your own research and believe as you may. I have, and it is what it is.

      January 13, 2013 at 9:59 am |
  7. Chairman Mao

    I starved 40 million people to death.

    But at least they had free healthcare.

    January 13, 2013 at 9:21 am |
  8. Jim

    Maybe I should claim my company is Christian Scientist and refuse to pay for healthcare, or fire any employee that goes to a doctor.

    January 13, 2013 at 9:20 am |
  9. GS

    It should be optional. If the company doesn't want to use the benefits, the employees can go to a company that does. No...instead everything has to be forced by a bunch of "liberals" that are so against forcing people to do things against their beliefs or freedoms. What hypocrites.

    January 13, 2013 at 9:17 am |
    • AudreyE

      By such logic, the company could pay less than minimum wage, and we could say, "Well, work somewhere else," but we don't, because we have a minimum wage law. Sorry. Try again.

      January 13, 2013 at 9:34 am |
    • Stacey

      This is a family business which is based on the word of the Lord and they do not support abortion drugs, I support Hobby Lobby and Government quit trying to tell us how to run our households and our businesses. If the government supports the business fine , you have to abide by certain laws. But this is family owned. If someone does not believe in the Mission, Values, and Vision of Hobby Lobby then go get a job somewhere else that supports Anti abortion drugs.

      January 13, 2013 at 9:35 am |
    • Huff

      @Audry, the minimum wage law has never increased the buying power of those earning it. Most fast food and retail stores entry level jobs already pay above minimum wage. Why? Because free market demand dictates salaries. You cannot control salaries unless you also control the cost of goods....which countries such as Venezuela does. That where we are headed?

      January 13, 2013 at 10:03 am |
    • hanson

      I guess this means if a company doesnt believe in minimum pay or a safe working environment thats Okay also. They all are called labor LAWS including what a company must provide in healthcare benefits

      January 13, 2013 at 4:39 pm |
  10. .

    Obamacare. And how much did the SSI tax increase take out of YOUR wallet to help support people who have given up all hope of finding employment and have instead filed disability claims with the SSA - that are being granted in unprecedented numbers never before seen?

    Hope?

    Are you kidding me?

    Welcome to the new idiocracy.

    January 13, 2013 at 9:15 am |
    • GS

      We're not supposed to talk about that right now....we're drinking kool-aid.

      January 13, 2013 at 9:19 am |
    • YeOldeDave

      How much did the SS tax RETURNING to its original level keep SS from going broke even sooner then the politcally expedient BHO? The "cut" trumpeted when passed was ridiculous. SS is in such sorry shape, to cut its revenue stream by 1/3 to "stimulate" the economy was nothing but politically inspired nonsense to BS folks into thinking that BHO was "helping" them.

      January 13, 2013 at 9:35 am |
    • RickInNY

      Dave, SS would be in much better shape, had Clinton not stolen 2 trillion dollars from it, to "balance" his budget.

      January 13, 2013 at 10:02 am |
  11. deez

    Had Obamacare been actually thought out and not rammed down the people's throat the US government wouldnt have this problem of companies finding loopholes. I applaud Hobby Lobby for standing up for their religous beliefs.

    January 13, 2013 at 9:13 am |
    • Julie

      Its obvious tha all evangelicals do.

      January 13, 2013 at 9:16 am |
  12. Durannie

    Freedom of Religion is NOT absolute in this nation – the laws of the land take precedence. Hobby Lobby does not get to hide behind religion while trying to force its scientific ignorance on its employees.

    January 13, 2013 at 9:06 am |
    • GS

      =p

      January 13, 2013 at 9:16 am |
    • .

      Freedom of Religion is NOT an absolute in this country?

      Welcome to the new idiocracy.

      Here's your sign, Durannie.

      January 13, 2013 at 9:25 am |
    • Josh

      Even the eighth grades I teach understand the importance of freedom of religion.....I am sad that you don't.

      January 13, 2013 at 9:33 am |
    • AudreyE

      It has nothing to do with Freedom of Religion. It is employment law. Hobby Lobby is not a church.

      January 13, 2013 at 9:35 am |
    • Mark

      Any company should have the right to refuse to pay for abortion drugs or birth control. They are not refusing healthcare. Abortion and birth control are not healthcare.

      January 13, 2013 at 9:44 am |
    • Josh

      Lets see...hobby lobby closes early so employes can go home early to be with their family, they are closed on Sundays, they play christian music in the story, they give to Christian charities.......yea your right.....they don't resemble a Christian business at all.

      January 13, 2013 at 9:50 am |
  13. ron

    No one is trampling on their owners of Hobby Lobby's beliefs. I f they, personally do not wish to use the the benefits set forth in the new health care guidelines, they may choose as their faith dictates. However, a rational person would not say that every sinle one of their 13,000 employees would share that same belief. And for them, Hobby Lobby is dictating their decision, their health, & their conscience for them. And that is not right. Freedom of religion, and religious choices, including those on health, does not extend to foisting those beliefs on everyone one else. At least not in America. And that, iswell established.

    January 13, 2013 at 9:02 am |
    • GS

      Then the employees can practice their freedom to employ themselves with another company.

      Herpa derp....not rocket science there buddy.

      January 13, 2013 at 9:14 am |
    • Steve

      The employees can purchase a rider that covers contraception and early abortion. Such riders are very inexpensive.

      January 13, 2013 at 9:29 am |
    • RickInNY

      Well Ron, they can just go work somewhere else then. Simple.

      January 13, 2013 at 10:05 am |
    • Tom, Tom, the Piper's Son

      That idiocy is remarkable even for THIS blog. "They can just go to work somewhere else." THEY don't have to. They have the right to have health care insurance offered to them, for which they pay premiums, according the the law. What part of that do you not comprehend?

      January 13, 2013 at 12:47 pm |
  14. Ticktockman

    Health insurance should be our right as citizens, so I support the single-payer option. I agree with those who advocate decoupling health insurance from employment. However, as long companies are obliged to provide health benefits to their employees, there should be no exemption from any coverage just because the company leaders happen not to like one medical procedure or another, regardless of their reasoning. If a company or organization operates in the US, then their employees should have any legal medicines and procedures covered. If they do not like having to provide health coverage that includes contraception or abortion, then these companies are free to follow their convictions and cease doing business in this country. That goes for religious and non-religious employers equally.

    January 13, 2013 at 8:59 am |
    • Skimeister

      Why is that liberals always find it easy to give away someone else's rights?

      January 13, 2013 at 9:08 am |
    • .

      Because liberals find it a lot easier to give away your rights if it fits in their grand scheme of the all knowing centrally planned government controlled by liberals.

      You must bow to the central planners or you will be forced to attend a re-education camp.

      What the heck. It worked for Pol Pot.

      Didn't it?

      January 13, 2013 at 9:18 am |
    • Ticktockman

      Why is it that when a conservative has no point to make, they just keep repeating the word "liberal"? As if that means anything.

      January 13, 2013 at 9:21 am |
    • .

      Well, you're right about one thing... liberal really doesn't mean anything.

      It's just another epithet for stupidity.

      And just how much did the meaningless liberals take from YOUR paycheck on Friday?

      January 13, 2013 at 9:27 am |
  15. Carol

    They can speak with their wallet, but so can I, in not buying their made-in-China junk.

    January 13, 2013 at 8:57 am |
    • Bob

      Good luck finding many items, if you refuse to buy items made in China. Often it is difficult to find out where it was made and other items like shoes are made , almost entirely, in China or other third world nation.

      January 13, 2013 at 9:14 am |
    • Chairman Mao

      Yooo shut up!

      January 13, 2013 at 9:19 am |
    • Carol

      Bob, who said I was going to boycott China? I'm boycotting Hobby Lobby

      January 13, 2013 at 12:44 pm |
  16. TSB8C

    This is not a case of Holly Lobby trying to force their beliefs on their employees. This is a case of the liberal government trying to force their beliefs onto private companies. No official at Hobby Lobby is telling employees that they can't have or use abortion inducing drugs. They are simply saying that they, as the owners/managers of the business, shouldn't be forced by government to pay for and provide such drugs. If an individual employee wants them, then they are free to go purchase all they want with their own money or other supplemental insurance they may have or go get.

    January 13, 2013 at 8:57 am |
    • Julie

      Liberal government my be-hind. This is a case of a company not wanting to follow the law. You know, "THE LAW". Like minimum wage, and other laws that apply to employers. They aren't a church, so follow the law or pay the fine and keep their evangelical nonsense out of the work place.

      January 13, 2013 at 9:08 am |
    • mikithinks

      An employer can believe anything he/she wants. People do not believe in blood transfusions, porcine heart valve replacements, viagra, serving meat in hospital meals, DNA testing, transplants. The list could go on and on. That is one of the good reasons that there is separation of church and state. If the employee does not believe in the treatment she need not use it. Getting a litte weary of the pro-birthers, (not lifers, since they care less about children after birth), being such a noise making minority. Most of the hobby supplies can be bought less expensively on Amazon, with a larger selection, tax free, and often postage free. It is only right and well that we give Hobby Lobby's owner more time to pray.

      January 13, 2013 at 9:18 am |
    • Getaclue

      Just because a service is OFFERED, does not mean it has to be accepted. If you go into a restaurant that serves alcohol and you don't approve of drinking alcohol, then you CHOOSE not to ACCEPT the OFFER of a drink from the bar. Or if eating shellfish is against your beliefs, or eating pork, then you don't have to ACCEPT the shrimp or pork chop OFFERING on the menu. Get a clue.

      January 13, 2013 at 10:03 am |
  17. Jenny

    So, can I now violate any law I do not agree with, or do I first have to have religious grounds to do so?

    January 13, 2013 at 8:46 am |
    • Guest

      The "corporation" may have certain religious beliefs but they cannot force their beliefs on their employees. Answer is to only hire people with the same beliefs – good luck with finding that many backwards applicants.

      January 13, 2013 at 8:49 am |
    • John

      I find their whole argument on religious ground to be completely non-sensical. I wonder how the CEO would feel if he had to work for a company that is run by someone who is Buddhist and only allow vegetarian food to be consumed for their employees, because of his/her religion.

      They are effectively forcing their personal religious believes on to their employees, which is a form of discrimination.

      January 13, 2013 at 8:58 am |
    • Bubba

      Sure, all you have to do is be willing to pay up.

      January 13, 2013 at 9:05 am |
    • Josh

      This religious rights that you speak of is what our nation was founded on....If their are women that are employed by hobby lobby that want these manufactured abortion pills then they can pay for it themselves..

      January 13, 2013 at 9:26 am |
  18. SixDegrees

    Why not just offer the coverage, as the law requires, and when an employee or other covered member actually uses covered birth control the company can fire the employee for violating company policy?

    That would work, right? They might have to insert an explicit prohibition into their employee handbook first, but how hard is that?

    January 13, 2013 at 8:41 am |
    • Carol

      So you think a company should monitor their employees' prescriptions? How about posting the photographs, in their front lobbies, of male employees who take Viagra?

      January 13, 2013 at 8:59 am |
    • Sonjah

      Legal medical procedures cannot be reason for firing.

      January 13, 2013 at 9:11 am |
    • SixDegrees

      First – companies already do monitor employees prescriptions and health care activities; they receive detailed reports from the insurance companies for every procedure and drug paid for. It's been that way pretty much forever.

      Second – yes, I'm completely aware that companies can't fire people over medical issues.

      Third – companies can't fire people for religious issues, either. In other words, what I posted was sarcasm. I thought it was blindingly obvious, but never underestimate the dullness of Internet readership, I guess.

      January 13, 2013 at 11:01 am |
  19. Molly Winston

    They should be required to annually tally up their employees' responses to the question of whether they subscribe to the same tenets of faith of the religious denomination of the owners... Meaning that ifthe owners are Catholic, a majority of employees must also affirm in writing that they are also Catholic.

    January 13, 2013 at 8:40 am |
    • SixDegrees

      Or fire them when they receive the insurance report that they used birth control, in violation of written company policy.

      Oh, wait – that would be a lot like discrimination based on religious grounds, wouldn't it?

      January 13, 2013 at 8:42 am |
  20. Standford

    Oh good! Another place we won’t have to shop for cheap junk! We have a choice too! These businesses that think their phony religious beliefs will somehow increase their profits will get another lesson in American consumerism. We do not have not to shop at Hobby Lobby; what does that do to the profit line? Ask Papa John’s, Olive Garden and Denny’s!

    January 13, 2013 at 8:32 am |
    • Fiz

      You probably have never even shopped there in the first place. I don't think your threats are going to hurt their business. Good day!

      January 13, 2013 at 9:25 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 and Eric Marrapodi with daily contributions from CNN's worldwide newsgathering team.