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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. Bob

    Jesus Christ chose to die on the cross because he was a homeless schizophrenic that was out of his mind. After that one act of stupidity, a religion is born. Congrats on following it.

    January 13, 2013 at 10:45 am |
    • Michael

      and your evidence of this...? Seems like it takes a lot of "faith" on your part.

      January 13, 2013 at 10:49 am |
    • Bob

      It is your duty to provide evidence to support your crazy religion. You make the claims that there are gods.

      January 13, 2013 at 10:52 am |
    • Joe

      Our "fairy tale schizophrenic God" is saving this company 1.3 mil a day......Bobaroo!

      January 13, 2013 at 10:57 am |
    • Joe

      You've missed the elusive obvious evidence....

      January 13, 2013 at 10:57 am |
    • Bob

      @Joe

      I think it's their accountant that is saving them from the fine, unless one of the gods does their taxes. If that's the case, why not show us that god as proof?

      In fact, it would cost them nothing extra to include birth control in you insurance plan. That is a mandate of Obamacare on the insurance companies. HL is just incurring extra legal fees on itself by filing this stupid lawsuit.

      January 13, 2013 at 11:03 am |
    • Michael

      I don't have to provide the evidence. God has already done that.
      "For his invisible attributes, namely, his eternal power and divine nature, have been clearly perceived, ever since the creation of the world, in the things that have been made. So they are without excuse" -Romans 1:20

      It's your duty as a person to throw up your white flag and stop your suppression of the truth.
      "For the wrath of God is revealed from heaven against all ungodliness and unrighteousness of men, who by their unrighteousness suppress the truth" – Romans 1:8

      January 13, 2013 at 1:15 pm |
  2. Brad Newberry

    Wouldn't it make more sense just to drop their health care coverage all together. Then you would just face the small penalty for not providing it.

    January 13, 2013 at 10:45 am |
    • RG33

      For large companies, it is not a small penalty.

      January 13, 2013 at 11:14 am |
    • hanson

      Well if that would be their decision that is their choice to make. However on a business of this size we are not talking about a few dollars in penalty. They should face the repercussions of their actions no matter which way they choose to go. Perhaps just perhaps the violence in the USA has as much or more by trying to teach people to ignore the law when it suits their fancy than it has to do with weapons or mental illness. Please teach your children its okay to not obey the law. I respect HL religious beliefs but I do not believe the same. I however was taught that a person has not only a legal right to obey the law but a moral right to do the same. We all have a right to challenge a law we feel is unjust but not none of us has the right to disobey the laws just or unjust.

      January 13, 2013 at 7:23 pm |
  3. livingston

    I'll take my business elsewhere. I won't be a part of supporting such an unchristian company. They don't care about their employees.

    January 13, 2013 at 10:45 am |
    • Brad Newberry

      Where you gonna go Walmart ya cause they are so good to Their customers.

      January 13, 2013 at 10:46 am |
    • Bob

      @brad newberry This is unfortunately a very good point. Maybe we can see a return to mom and pop stores over this, and some good can come out of it.

      January 13, 2013 at 10:53 am |
    • livingston

      I don't shop at walmart.

      January 13, 2013 at 10:54 am |
  4. shmoetheho

    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 ability to impose it's religious beliefs on it's employees and oppose the mandate and any penalties."

    Fixed that for ya.

    January 13, 2013 at 10:44 am |
    • Joe

      and not fund the murder of millions of innocent babies......yeah imposing religious beliefs!

      January 13, 2013 at 10:59 am |
    • Bob

      A lump of genetic snot is not a baby. If your wife miscarries a ball of bloody phlegm do you name it? If I put a week 1 aborted fetus and a big glob of literal snot next to each other on a table, could you tell the difference?

      January 13, 2013 at 11:16 am |
    • RG33

      Your medical insurance DOES NOT FORCE you to use contraception. For that matter, they don't even force you to go to a doctor at all. If you have insurance today, you are paying for all the people that don't. Same for car insurance.

      January 13, 2013 at 11:16 am |
  5. olepi

    Another chain that I will never shop at.

    At lease it is not as bad as food service companies, like Papa John's, Taco Bell, etc, making sure their employees DON'T have health insurance.

    January 13, 2013 at 10:44 am |
  6. Christliva

    Way to go Hobby Lobby! I love it!!!

    January 13, 2013 at 10:44 am |
  7. Andrea

    While I agree that this company has a right to their convictions, I do not agree with those convictions. So I will no longer shop in their stores.

    January 13, 2013 at 10:43 am |
  8. charles darwin

    They lost me as a customer.

    January 13, 2013 at 10:41 am |
    • SteevS

      same here

      January 13, 2013 at 10:45 am |
    • Mack

      It's getting tiring to manage my "boycott list" these days with all of the nonsensical shenanigans these types of companies pull. Off to add Hobby Lobby to the list...

      January 13, 2013 at 10:48 am |
    • Brian

      i doubt you are really a customer; you are the kind that watch house wives and entertainment tonight and not much craft or educational stuff. obamacare is big government imposing its tyrant's will on the people. the 49% who voted to get rid obama are just holding on waiting for him to leave office before repairing damages he did to our great country.

      January 13, 2013 at 10:51 am |
  9. Nadine.

    I know that many times,a doctor will prescribe medication that is usually used for one issue to be used for a totally different reason. For example, if a woman is heavily bleeding from fibroid tumors, sometimes they are prescribed the birth control pill as the only way to stop the bleeding without surgery. I am not a pharmacist, but what if the morning-after pill could be used for another condition – would Hobby Lobby and it's ilk deny it then if the doctor wrote a note of why the medication was being prescribed?

    January 13, 2013 at 10:40 am |
    • Belvarie Varnado

      IF, a very big word.

      January 13, 2013 at 10:46 am |
    • jojo

      What a stupid argument.

      January 13, 2013 at 10:52 am |
    • livingston

      Do you like the idea of having to ask your employer for permission to receive treatment for a very personal medical problem? Who would make the decision?Would they have medical training to make the call? The HR worker? The manager? The company president? Do you believe that the request wouldn't become the office gossip? HIPPA is in place for a reason.

      January 13, 2013 at 10:52 am |
  10. Nick

    People are always hiding behind god for everything. Truth is they are too scared to face issues themselves. God has always been an easy out for them. why stop today

    January 13, 2013 at 10:40 am |
  11. eric72

    Isn't it just a wee bit strange that this summary of the Hobby Lobby case fails to mention that: 1) the so-called abortion-inducing drug the Greens object to is Plan B – which is covered by ObamaCare precisely because it does not cause abortions but is instead designed to prevent pregnancy, and 2) despite the Green family's claim that "the companies' religious beliefs prohibit them from providing insurance coverage for abortion-inducing drugs" they did in fact provide coverage for Plan B last year?

    January 13, 2013 at 10:40 am |
    • Mike

      Again that is incorrect. Plan B is certainly an abortifacient in that it is used after the act, not before. It is not a pharmacological like mifepristone but to say it isn't an abortifacient is incorrect. I've written for it numerous times and have never once written high.l dose OCPs. for initial prevention. However, more importantly plan B gets the coverage on CNN but is not the basis of the suit. Hobby lobby covers OCPs they do not want to cover classic abortifacients or elective surgical procedures

      January 13, 2013 at 10:46 am |
    • eric72

      Mike, you don't know what you're talking about. Their issue (now) is with Plan B – despite the fact that their health insurance policies covered the drug for their employees last year. And like it or not, Plan B is not an abortifacient. RU 486 – a classic abortifacient – is not included in mandated coverage spelled out in ObamaCare, nor are surgical abortions.

      January 13, 2013 at 11:01 am |
  12. Mack

    More than half of women who use birth control pills use them for reasons other than contraception. There are other medically beneficial reasons that doctors prescribe the pill. These organizations who won't pay for the pill are way off base and falling back on old-school thinking when, in reality, more than half their argument is dead wrong.

    January 13, 2013 at 10:40 am |
    • Rational Libertarian

      Aspirin has multiple uses, apparently they help prevent cardio-vascular problems. I still don't expect my insurance to cover aspirin for me.

      January 13, 2013 at 10:43 am |
    • Mack

      We're not talking about non-Rx drugs here. Try again.

      January 13, 2013 at 10:44 am |
    • Rational Libertarian

      I'm a libertarian. I don't believe any drugs should need a prescription.

      January 13, 2013 at 10:47 am |
  13. LI_Bri

    Birth control should be mandatory for Obama supporters.

    January 13, 2013 at 10:39 am |
    • RG33

      I assume Hobby Lobby doesn't care once the child is born. They don't want population control, yet, I bet they holler at the immigrants coming in and don't want to pay to provide education and medical help to those children.

      (I am not sure I understand the difference between killing an unborn child and letting a born child starve to death or die of preventable disease or killed in warfare. Nearly 1,000 children worldwide will die while you are reading this. UNICEF report 2010.)

      January 13, 2013 at 11:00 am |
    • LI_Bri

      @RG33 It is mom and dad's job to provide education and medical care for this kid, not Hobby Lobby's. And if mom and dad cannot provide...and they cannot afford birth control,..they should stick to just watching movies.

      January 13, 2013 at 11:35 am |
  14. Bob

    I'm curious if they will still have "religious objections" if their business drops by 50%. If they hold strong, good for them. If not, then they are hypocrites.

    January 13, 2013 at 10:37 am |
  15. Christina

    Hobby Lobby is a company, not a person. It does not have a religion. It is idiotic for it's heads to state the mandate goes against the companies religious beliefs. It does not have religious beliefs because it is a company not a person. People like the heads of this company need to get over themselves and stop forcing their beliefs on their employees.

    January 13, 2013 at 10:37 am |
    • LI_Bri

      The employees can decide if they want to work there are not. I say government needs to stop interfering with business.

      January 13, 2013 at 10:41 am |
    • Mack

      Companies need to stop interfering with peoples' ability to get legal, medically prescribed products to treat their own common, every-day health situations.

      January 13, 2013 at 10:46 am |
  16. Lily

    I wonder if their health plan covers Viagra? If they cover Viagra, they should cover birth control and abortions. These companies are treating women like second class citizens.

    January 13, 2013 at 10:32 am |
    • Rational Libertarian

      Viagra aids reproduction, it's the complete opposite.

      January 13, 2013 at 10:34 am |
    • Nadine.

      Actualy this is to the Libertain idiotic comment. Reproduction takes two to tango.

      January 13, 2013 at 10:43 am |
    • Clif Watts

      Yeah, you should probably take a class on logic. Those two are not the same, though one might lead to the other.

      January 13, 2013 at 10:45 am |
    • Brett

      Viagra aids in erections. It actually suppresses the ability to reach orgasm for men, thereby interfering with reproduction more than assisting reproduction.

      January 13, 2013 at 10:48 am |
    • Rational Libertarian

      Nadine

      If pointing out the obvious is idiotic then I guess I'm idiotic.

      January 13, 2013 at 10:48 am |
  17. col45

    I will not shop there anymore. Women should stand together and boycott Hobby Lobby.

    January 13, 2013 at 10:30 am |
    • Freedom

      That is your American right, just as it should be for Hobby Lobby to not be forced into something they don't believe in.

      January 13, 2013 at 10:38 am |
    • LI_Bri

      How about paying for your own birth control!?

      January 13, 2013 at 10:40 am |
    • Belvarie Varnado

      Sorry. I agree with Hobby Lobby. Boycott them by yourself.

      January 13, 2013 at 10:48 am |
  18. cgs

    I think contraception and morning after pills are great. Especially in ghetto communities. But I'm am against the government making Hobby Lobby pay for them because they should be able to run their company according to their belief systems. Religious freedom, even for a business, should trump here. I can't believe that so many Americans are ok with this government interference.

    January 13, 2013 at 10:29 am |
    • Diane

      Agree..

      January 13, 2013 at 10:34 am |
    • Bob Jones

      Its the communist way, Fine your company for not doing what the govt tells you to do and if you dont pay, we take your company away from you..

      January 13, 2013 at 10:38 am |
    • StuckInSoCal

      I am a woman and I agree. Obamacare is rediculous. This is not a war on women, this is a war against religious freedom. I am not even religious and I'm fed up. And please stop with the "living wage" bs. Not every job is supposed to support your entire family...you must start somewhere and work your way up. What ever happened to hard work? Did we all turn French overnight? Hobby Lobby isn't the only employer. If you know their policies and don't agree WORK SOMEWHERE ELSE! Or go to a pharmacy and (((GASP))) BUY IT YOURSELF!!! The morning after pill isn't expensive and you don't need a prescription! Why is paying for your own pill out of the question? This administration is saying that you're not responsible enough to handle it on your own without getting your employer involved. Are you women agreeing?

      January 13, 2013 at 10:53 am |
    • MagicBishop

      It's called the cost of doing business. Next thing they'll be saying they don't have to pay taxes, it's a slippery slope. If they don't like playing by the rules that elected majorities make then they should take their arts and crafts business out of this country. Good luck..

      January 13, 2013 at 11:01 am |
    • RG33

      The Govt requires businesses to not kill/injure & protect their employees and customers with fire safety rules, environmental rules, equipment safety rules, unemployment insurance rules, economic SEC rules, food safety rules, construction rules, etc. etc.... so why not health rules?

      Maybe you want to go back to the times of 19th Century Robber Barons, when few to no Govt rules applied to business?
      READ YOUR HISTORY to see what happens when companies are left to themselves.

      January 13, 2013 at 11:11 am |
  19. junghilee

    perfectly in keeping with the fine tradition of bipartisan service to wall street 1% at the expense of main street 99%.

    January 13, 2013 at 10:26 am |
  20. dave

    I know United Health Care insurance company does not force any company with religous objections to birth control coverage ,that is now mandated ,to pay for it as part of the plan cost. In other words, companies like Hobby Lobby can easily avoid fines by selecting a plan that can cover birth control but not pay for the coverage. If they are against it, they don't ever have to use that benefit and they aren't paying for something they don't agree with. Simple

    January 13, 2013 at 10:25 am |
    • jsf12

      That is an absurd argument. The insurance company includes all their costs when deciding on their rates. Every cost the insurance company incurs is paid for by the rates its customers pay. It is meaningless for the insurance company to claim some specific coverage is not being paid for by its customers.

      January 13, 2013 at 10:59 am |
    • eric72

      jsf12 is right. Similarly, if Hobby Lobby employees are allowed to go to doctors who prescribe Plan B for any of their patients – Hobby Lobby they will be violating their religious beliefs. So, obviously, Hobby Lobby should be able to dictate which doctors are appropriate for their employees.

      January 13, 2013 at 11:19 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.