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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. Belvarie Varnado

    People, people. They are not talking about regular birth control. Hobby Lobby isn't against that. Only the abortion pill.

    January 13, 2013 at 10:59 am |
    • Tom, Tom, the Piper's Son

      Plan B is not an "abortion pill."

      January 13, 2013 at 11:20 am |
  2. Bo

    Everyone gets to pay for their healthcare. The Hobby Lobby freeloaders get to avoid paying for it. They just love to live on charity.

    January 13, 2013 at 10:59 am |
  3. LeeLee

    Went to a HL one time b/c I was trapped in a town that didn't have Michael's. HL's strangely bizarre Jesus statue display (and other religious items) was right next to the display of creepy redneck and paramilitary plaques to hang in the home. That says it all.

    January 13, 2013 at 10:57 am |
  4. ba1450

    This is really rich on the part of Hobby Lobby given that they make all their profits selling junk made in China which has state mandated birth control.

    January 13, 2013 at 10:57 am |
  5. shawn

    How does a company have religious beliefs?

    Oh yea Citizens United...

    January 13, 2013 at 10:56 am |
  6. cyclegurl

    Add me and my family to the list of non-shippers st Hobby Lobby. It'd okay to stand by your convictions but not at the expense of the folks that work for you. Your personal beliefs should not be a detriment to the health and lifestyle of others

    January 13, 2013 at 10:55 am |
    • Rational Libertarian

      It's a free country. If they don't like it they can get another job.

      January 13, 2013 at 10:57 am |
  7. Pr_Boxer

    Religion has nothing to do with Hobby Lobby's opposition, their motivation is strictly to maximize profits. You know I'm right!

    January 13, 2013 at 10:55 am |
    • Ann

      Yes in deedy when the bottom line is affected companies become religious. That is their choice if they choose not to be a good employer, but my choice is do I want to support Hobby Lobby and shop there... think my shopping days at Hobbly Lobby are over...hello Michael's and that is my choice.

      January 13, 2013 at 10:58 am |
    • Rational Libertarian

      So? The government shouldn't have the right to reduce their profits through ridiculous mandates.

      January 13, 2013 at 10:59 am |
  8. Pat

    Hobby Lobby is forcing their religious beliefs on others, plain and simple. Funny, how Hobby Lobby all of sudden is Christian bible belt bs based.

    January 13, 2013 at 10:55 am |
    • lerianis

      That is exactly what this is: Hobby Lobby forcing their religious beliefs on their workers and I am shocked that people cannot realize that. If you personally have a problem with birth control, fine and dandy.... don't use it. But to keep people from having that coverage under their insurance as 90% of society wants is simply wrong and forcing your religious beliefs on other people.

      January 13, 2013 at 10:57 am |
  9. jen

    I have just taken Hobby Lobby off my approved list of places to shop. I was a customer and bought supplies for my art school students there... Now I will replace them with another supplier.

    January 13, 2013 at 10:53 am |
    • Brad Newberry

      Where you gonna go cause atleast they are providing some type of health coverage. Not many else can say the same.

      January 13, 2013 at 10:56 am |
    • Honest John

      And I just added it.

      January 13, 2013 at 11:17 am |
  10. Phil

    I will NEVER shop again at a Hobby Lobby store!

    January 13, 2013 at 10:52 am |
  11. oldleftcoastdude

    There should be no exemption for religious organizations or churches from taxes, period.

    January 13, 2013 at 10:52 am |
  12. deb

    There is no Hobby Lobby in my state but if there was I would certainly be boycotting it!

    January 13, 2013 at 10:50 am |
  13. Flooby

    I'll never shop at this cr@p store. As far as I'm concerned they can merge with chick fil a and become one huge crappy company.

    January 13, 2013 at 10:50 am |
    • dutchtown

      Fine,you want birth control.Pay for it yourself.What is difficult about that,I dont even have eye care where I work.Is obama care mandating that companies pay for eye care?

      January 13, 2013 at 11:06 am |
    • Tom, Tom, the Piper's Son

      Dutch, you don't buy a pair of eyeglasses every month. If you don't wear your eyeglasses, is the result as costly as an unwanted pregnancy?

      January 13, 2013 at 11:21 am |
  14. Michael

    Compromise is perhaps what Hobby Lobby should do. They can move all their employees to part time, hire more workers to make up the difference, and avoid paying for both the insurance as well as the fine. That way both the government and HL get something. The government gets to tout a lower unemployement rate and HL gets to keep their values intact.

    January 13, 2013 at 10:49 am |
  15. Pete

    If Hobby Lobby cares about their employees as they claim to then shouldn't they allow their employees to make a choice about what drugs to take?

    January 13, 2013 at 10:47 am |
    • Staszek

      including heroin funded by taxpayers?

      January 13, 2013 at 10:52 am |
    • Rational Libertarian

      They have no right to tell somebody what drugs they can take (nor should the government) but they do, or at least should, have the right to not cover certain drugs and procedures if they don't want to, assuming it's contractually stipulated.

      January 13, 2013 at 10:53 am |
    • For Pete's Sake

      Low information voters such as yourself are a lot of the reason for the problems in this country. HL is not restricting their employees' choice. They are objecting to paying for their choice which violates the company's conscience.

      January 13, 2013 at 10:59 am |
    • george is truthfull

      Hobby Lobby isn't telling anyone what they can take as far as medication is concerned. They are simply saying that because of there religious belief they are not paying for it. Thats all.

      January 13, 2013 at 11:01 am |
  16. Peter

    Either Hobby Lobby has very discriminatory hiring practices, or they are forcing a particular religious belief on their employees, and violating the employees right to freedom of religion. Nice try though.

    January 13, 2013 at 10:47 am |
    • Michael

      As far as I can tell working for any particular company IS a choice. If a person doesn't agree with the guidelines of working there they are always free to seek employment elsewhere.

      January 13, 2013 at 10:53 am |
  17. G24U

    So why do these sleez-ball companies get to choose what is provided in health insurance when the employee is paying over half of the bill? Truth is they are just hiding behind religion to make a larger profit.

    January 13, 2013 at 10:47 am |
  18. 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 10:47 am |
  19. deb

    Lily, I agree – I'm sure Viagra is covered – and no Ration Libertarian it is NOT for reproduction – guys who use Viagra are older and not looking to have babies! This is just another example of men trying to control women like they did back in the 50's.

    January 13, 2013 at 10:46 am |
    • Honest John

      Don't knock the 50s. It was a time of great economic prosperity.

      January 13, 2013 at 11:20 am |
  20. dave

    The government should force everyone to do everything including making the politicians rich.
    How many of our fine upstanding elected officials have a vested interest in the insurance companies who will make millions by forcing everyone to have their insurance.
    Amazing how we let the minority rule the majority.
    Stand up what you belief is right Hobby Lobby.

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

      Your about as bright as a 5 watt light bulb.

      January 13, 2013 at 10:50 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.