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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. TNPatriot

    The owners of these companies are free to practice their religious beliefs, however they are NOT free to force their religious beliefs and practices on their employees. I would normally drive 50 miles west to the Hobby Lobby store and spend about $500 a year in supplies. When Hobby Lobby announced several weeks ago that they would fight this coverage, the timing was perfect. I had not done my Christmas shopping for the wife's art supplies, so a 50 mile trip east resulted in my spending about $200 at a Michaels store.

    January 13, 2013 at 11:18 am |
  2. Mike

    I'm finding it very hard not to laugh at those of you who are boycotting Hobby Lobby just because of this article. If you really cared that much about what you claim you do in your posts, then you should make it a practice to question the HR department of every establishment you shop at so you'll be able to make a shelfish, self righteous, ignorant, and objective opinion. You would've never come to your short-sighted conclusions if the ObamaCare program(which will bankrupt our country, thankyou very much) was never put into law. What you really should be complaining about is the gun that congress is holding to Hobby Lobby's head which will put all of their employees out of work if they don't grant them exemption over a pill. Hobby Lobby isn't trying to dodge paying for health insurance by cutting hours like a lot of other companies are doing in order to save money.

    What you are forgetting here is the key founding freedom of which this country was founded for my dear misguided citizens of this great nation; which is the freedom of choice. Nobody is holding a gun to the employees of Hobby Lobby and forcing them to work there; not to mention, there is a plethora of places which woman can go to get birth control for free or at reduced prices.

    I'm very disappointed in all of you who are placing hate on the only retail establishment I know of that closes it doors on Sunday so their employees can have time with their families.

    January 13, 2013 at 11:18 am |
    • James PDX

      Jesus instructed his followers that they must follow all secular laws that don't prevent them from worshipping their god. Therefore, Christianity is not a leg they can stand on in this fight.

      Hobby Lobby doesn't get to tell their employees what they do with their pay, so why should they get to tell them what they can do with their healthcare? Including the Morning After pill in coverage doesn't cost HL any extra. So Hobby Lobby's money (wages) will still pay for the pill, the only differences are that their employees will get a lesser health coverage for the same price and will have to spend more of their hard earned money on something that their health insurance premiums already pay for.

      Meanwhile, HL hypocritically continues to buy cheap products from sweat shops in China where the government forces their population to have abortions. If they were so against any form of abortion, they would halt all business with China. Also, the Morning After pill is not an abortion. It prevents a single cell organism from attaching to the uterine wall. This whole thing is nonsense.

      January 13, 2013 at 11:28 am |
    • james

      Mike what version of the Bible are you reading? I do not disagree with your China argument but that is not what we are talking about presently.

      January 13, 2013 at 11:45 am |
  3. Joey Isotta-Fraschini ©™

    "My religion tells me that I can and must break the law."
    All right, but you have to pay the fine anyway.

    January 13, 2013 at 11:16 am |
  4. Billy

    The law does not require participants that don't believe in something to use those benefits, but does require a company to provide it's employees that don't believe like them the coverage if they want it. For this company to be able to not provide the coverage allows them to push or demand their religous beliefs upon all their employees.

    January 13, 2013 at 11:14 am |
  5. Reality

    All the "free" contraceptives will not end the abortion and STD epidemics because said contraceptives are not used properly.

    Added details are available on p. 39.

    January 13, 2013 at 11:14 am |
    • Tom, Tom, the Piper's Son

      Nobody claimed any such thing, bozo. Research DOES show that free or low-cost contraceptives DO lower the rate of abortions and unplanned pregnancy among teens.

      Maybe you could try actually reading about the study that was done in St. Louis. Find the details yourself.

      January 13, 2013 at 11:18 am |
    • Reality

      Obviously, you cannot find the study to support your comments. And condoms at 33 cents each from Amazon.com are already "free" but as per the details on p. 9, said condoms are not being used properly resulting in the abortion and STD epidemics.

      As noted previously:

      Put a pack of condoms and a box of Pills in cereal boxes. Unfortunately, that would not ensure the condoms and/or Pills would be used. Based on Guttmacher Insti-tute data, said condoms and/or Pills are currently not being used as they should. (one million abortions/yr and 19 million cases of S-TDs/yr because either the daily Pill was not taken or a condom stayed in the pocket.)

      Maybe selling Pill-enriched sodas??? Hmmm?

      Condom-fitted briefs for men?? Hmmm?

      The door is open for other ideas!!!

      January 14, 2013 at 12:01 am |
  6. rob

    The religious nuts in this world, especially the U.S., are getting crazier by the day. We need to rid society of this dangerous vermin.

    January 13, 2013 at 11:11 am |
    • N&W 1000

      Achtung baby.

      January 13, 2013 at 11:12 am |
    • Rational Libertarian

      How? Mass execution? They did that in Russia and the religious crazies there are as crazy as they are here and are very powerful politically. Look at P.ussy Riot. Would they have been imprisoned here? Maybe for vandalism, not for offending a religion.

      January 13, 2013 at 11:16 am |
    • Sherron Teal

      I so agree, no they don't want to pay for birth control but we all end up paying for children on welfare! IDIOTS,

      January 13, 2013 at 11:26 am |
  7. volsocal

    So, the 10th Circuit Court will get around to the case one of these days. Meanwhile, real damage is being done. If it were a referendum on gay rights or moslem prayer rugs, I'm sure they would have fast tracked the case in a week. The bigger our government, the more corrupt it becomes.

    January 13, 2013 at 11:11 am |
  8. Joan

    If they only hired people of thier own religion this might work. I doubt they do. Therefore the law should prevail. I for one would not want to have a child I did not plan for. I have 4 children and they were well planned. I took birth control as to not have any surprises. My husband and I raised them and I taught the boys and girls about birth control. Hobby Lobby is using thier christian beliefs to harm individuals that do not agree with thier religion. This is not fair to all of the employees and actually is a form of discrimination.

    January 13, 2013 at 11:10 am |
    • volsocal

      The issue is about abortion, which is killing unborn children. The company owners do not want to participate in this practice. By ramming this down everyone's throat, the Left may cause Roe vs. Wade to be overturned.

      January 13, 2013 at 11:17 am |
    • MM

      Seriously Joan? Hobby Lobby isn't saying their employees can't take birthcontrol. They just don't want to pay for it and contribute to something contrary to their beliefs. When has someone paying for your birth control become a right in this country?

      January 13, 2013 at 11:17 am |
    • Jose

      If someone wants pills or an abortion like your self in case of an unplanned pregnancy, you should pay for it yourself you leech.

      January 13, 2013 at 11:19 am |
    • James PDX

      HL isn't being asked to pay for birth control. They are being asked to pay for health insurance. When HL provides their employees with fair comepensation for their hard work, why should they get any say in what they do with their compensation? Should HL be able to only pay their employees if they agree not to spend their pay on the Morning After pill? Nonsense.

      January 13, 2013 at 11:33 am |
  9. kristinakaye

    Did I miss what the LOOPHOLE was that is mentioned in the Headline???

    January 13, 2013 at 11:08 am |
    • N&W 1000

      Well, whatever this "loophole" is, it was written by OUR side, because there was no republican participation or input in that bill.

      I don't know why CNN is boohooing since we created the loophole?

      January 13, 2013 at 11:11 am |
    • joethejuggler

      They managed to change the plan year to postpone when the fines would start taking effect. It's not a loophole that gets them out of the ACA minimum coverage requirements–just a loophole to postpone when the fines start racking up for non-compliance.

      January 13, 2013 at 11:18 am |
    • joethejuggler

      @N&W: Not really. The loophole involved changing the start time of their plan year. It's not about a loophole in the ACA.

      My understanding is that the new employer coverage requirements go into effect whenever a company's next plan year starts. I suspect Hobby Lobby managed to extend whatever plan they already had so that their next plan year doesn't start for a few weeks.

      January 13, 2013 at 11:22 am |
  10. N&W 1000

    IF Bush and Cheney had rammed through some type of oppressive law that made liberals compromise their very religious abortion beliefs, then liberals would be screaming bloody murder; but, it is OK to do this to somebody else.

    January 13, 2013 at 11:08 am |
    • rsrsrsrsrsrs

      And were your convenient religious convictions upset at the Bush/Cheney wars of choice? One hundred thousand dead Iraq civilians might challenge your Christian values. As I do.

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

    This is BS. If a company believes blacks should not have rights should they be forced to abide the law?

    January 13, 2013 at 11:06 am |
    • Rational Libertarian

      If you own a company and you don't want to hire blacks then that's nobody else's concern.

      January 13, 2013 at 11:08 am |
    • James PDX

      That's not true, Irrational Libertarian. Anything that a company does that breaks standing laws is everybody's concern.

      January 13, 2013 at 11:35 am |
  12. N&W 1000

    What kind of so called "Health care" system depends upon the IRS to fine everybody to ensure compliance? Sounds like thuggery to me.

    January 13, 2013 at 11:06 am |
  13. Jillian

    I find the religion in a Hobby Lobby to be so annoying, with their music choices and all the associates with their religious greetings that I won't shop there. If I can't find it in the other craft stores I'll buy online rather than go there. I think every business should be closed one day a week so the employees know they have that one day, the slowest business day would be my choice and not for religulous reasons. There are many reasons for an abortion what if the mother's life is at risk?

    January 13, 2013 at 11:06 am |
    • PPPPWWWWEEEeaaaassseee

      Hobby Lobby is not stopping anyone from having abortions or taking the Morning after pill, thier just not paying for it.

      January 13, 2013 at 11:11 am |
  14. ironside

    My religion states that when I fill up my cart at Hobby Lobby I don't have to pay. I hope they will honor my religious freedom as well.

    January 13, 2013 at 11:04 am |
    • Reason

      thats interesting because my religion states I get to punch the cashier at Hobby Lobby when he is ringing me up.

      January 13, 2013 at 11:11 am |
  15. VBDVDB

    Maybe the owner of the Hobby Lobby should have gone into the religious business instead of the hobby business. There is something seriously wrong with all these religious nuts.

    January 13, 2013 at 11:01 am |
    • Rational Libertarian

      Whether they're wrong (which they are) doesn't enter into the equation. They still have religious freedom.

      January 13, 2013 at 11:05 am |
    • james

      Yes absolutely something wrong with them religious nuts. They actually believe in right and wrong they have a moral compass they try to live by a standard set by God and not man. They are crazy! Liberal laws will not drive christians or religious people to accept anything that is opposed to Gods will. God is the ultimate authority not you or your perception of what is fair

      January 13, 2013 at 11:08 am |
    • TomCom

      What is religous freedom for a corporation? Free to pick and choose what laws apply to them. Should they have tax free status like a church? Should an employee be forced to follow thier religous practicies?

      January 13, 2013 at 11:09 am |
    • Rational Libertarian

      It should be no tax or tax for all, whether you're a profit, religious or charitable organization. Also, a business is your property. If you want your employees or customers to fit a certain description, that's your business.

      January 13, 2013 at 11:13 am |
    • james

      Tom as I said Christians or Religious people believe there is a higher authority than man. They are instructed to follow the laws of the land unless it opposes the law or will of God. This has nothing to do with taxes it has to do with religious freedom. No one is saying women should not have a right birth control or whatever that is the law of the land for now. But when you try to force religious people to violate the will of God and his authority that is where the problem lies. No one is making anyone work at Hobby Lobby if an employee disagrees go buy these things on your own just do not try to force religious people to pay for it. They will not no matter what Obama and his Libs demand or percieve as fair.

      January 13, 2013 at 11:25 am |
  16. Jonline

    Companies are not people. They do not have religious convictions. They cannot have religious convictions. They are things. If they are allowed to do this, I am going to require all women in my business to cover their heads to comply with my religion.

    January 13, 2013 at 11:01 am |
    • Rational Libertarian

      And that's your right, and they have the right to say no and seek employment elsewhere.

      January 13, 2013 at 11:07 am |
  17. beachgalone

    of course Hobby Lobby is right. we should be free to run our businesses in the manner we like. You don't have to go to work there people! Planned Parenthood will provide birth control on a sliding scale. Employers are not your owners. You can quit anytime you want if you don't like the arrangement.

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

      With that logic, "If you don't like it, you don't have to work there".
      What if they refused to serve or employ black people?
      What if they insisted on having children under 10 years old as employees?
      What if they insisted their employees work 100 hr weeks?
      What if they insisted they release toxic chemicals into the ground and air?
      Some laws are for the good of the country and to protect individual freedoms!

      January 13, 2013 at 11:13 am |
  18. Travis

    This should be put down to the state level. Let the state decide this for Hobby Lobby. But if Hobby Lobby winds up in state that doesn't support their argument then they should be forced to cover it or close up shop and leave the state. That simple. The state should have the final say and if HL can't abide by the state's ruling then GTFO. They need to understand that their values can't just go into every single state and push it on everybody as they are doing. No business should be given exclusivity for being religious. IF they want this "special treatment" then let them have the special treatment but remove the business tax credits status if they are going to operate and want separate rules give it to them. But it should be TREATED differently as the next secular business sitting right next to them. Here we go again with the far right pusing their values and beleifs on everyone else. They may have the 1st ammedment right but SO DOES EVERYOONE ELSE. So leave it up to the states. IF the state doesn't support their position the company should have to close up shop and leave the state. SImple as that.

    January 13, 2013 at 11:00 am |
  19. Teresa

    So do they also pick and choose for things other than Birth control? Like, do you have to be married to get Viagra?

    January 13, 2013 at 10:59 am |
  20. nytewind

    I am pro-choice, but abortion is not contraception. Hobby Lobby or any other company shouldn't be forced to pay for it.

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

      nytewind, well said!

      January 13, 2013 at 11:04 am |
    • Dan

      How about in the case where it is absolutely essential to save the life of the woman?

      January 13, 2013 at 11:12 am |
    • Reason

      Ive got news for you, abortion is a LEGAL medical procedure, just like all the procedures you will pay for that are being done because people spent their lives sitting on their couches stuffing their face with junk food and not exercising. Same as the procedures for skin cancer for people that spent their years not getting treated promptly before things got worse. Same as the procedures you will pay for for HAVING an unwanted child under parents that have no means to support such child.
      I promise you your contribution to any abortion will be cheaper than the life of that child when the parents dont fund its proper care, and the child grows up being used to government handouts because it wasnt taught differently.

      January 13, 2013 at 11:16 am |
    • Tom, Tom, the Piper's Son

      HL isn't being forced to pay for abortion.

      January 13, 2013 at 11:19 am |
    • Kiki

      They are being asked to cover emergency contraception; not abortion. Plan B does not cause abortion so the whole argument is based on a lie.

      January 13, 2013 at 1:20 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.