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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

soundoff (4,609 Responses)
  1. Optimistic.Being

    If you're a Church I can see the exemption. But Hobby Lobby is a CRAFT STORE that may be owned by a Religious BOOKSTORE chain; not a CHURCH! That means the are a business that has religious beliefs that fall into the personal realm which has nothing to do with business. If the employees pay a portion of their healthcare, which is the norm for a lot of companies, that is yet another reason that Hobby Lobby and their parent company and others like them, shouldn't be allowed to pik and choose what health services their employees can have. If they don't like the law give up their exemption status if they have one!

    January 13, 2013 at 10:19 pm |
  2. altalks21

    Is Hobby Lobby Christian enough to pay their employees enough to support their families or are they like Pharisees, throwing their employees to government assistance, so that the rest of us taxpayers have to foot the bill and feed their hungry kids.

    January 13, 2013 at 10:05 pm |
    • Larry L

      Good point. Interesting that right-wingers are always opposed to welfare but want to restrict the ability of the working poor to control their family size.

      January 13, 2013 at 10:10 pm |
    • Michael

      Well, no worries Hobby Lobby because I'm going to shopping there more as a result of this and lots of other people will as well. Typical liberal hypocrisy..."we respect others unless they disagree with us." NOBODY does sanctimony, hypocrisy and intolerance like liberals.

      January 13, 2013 at 10:21 pm |
    • Tom, Tom, the Piper's Son

      Goody for you, Mikey. Do make me a macrame noose, won't you?

      Moron.

      January 13, 2013 at 10:22 pm |
    • Tom, Tom, the Piper's Son

      After you finish that, knit yourself a straitjacket.

      January 13, 2013 at 10:23 pm |
    • Michael

      Wow, Tommy, you're very emotional, aren't you? My two points were 1) there are many of us who are sympathetic and will support HL while others will not, and 2) liberals are intolerant of those who don't share their beliefs. I believe you've validated my second point quite effectively. And "moron" with nothing else? C'mon Tommy, you can do better than that! :)

      January 13, 2013 at 10:35 pm |
    • Tom, Tom, the Piper's Son

      Don't need to. Any "man" who shops at Hobby Lobby is one with no taste and little sense. The emoticons make you look even more effeminate.

      January 13, 2013 at 10:38 pm |
    • Michael

      You are completely and laughably wrong, Tommy, in so many ways. I have other things to do so I won't be able to respond to what I'm quite sure will be yet another "clever" comment from you, but you go ahead and keep commenting. And be careful about that big mouth of yours, you hear? Coupled with that pea size brain, it could/likely does get you into trouble. You see an emoticon now?

      January 13, 2013 at 11:10 pm |
    • Tom, Tom, the Piper's Son

      Yeah, I'm terrified. Goshers, are you going to decoupage me?

      January 13, 2013 at 11:12 pm |
    • Moby Schtick

      NOBODY does sanctimony, hypocrisy and intolerance like Michael.

      January 13, 2013 at 11:15 pm |
    • The Other Bob

      @Michael: AAs opposed to your conservative, pseudo-Christian intolerant hypocrisy?
      @Tom: Don't toy with the simple. They just get upset.

      January 14, 2013 at 8:50 am |
  3. Old Biker

    If Hobby Lobby shuts their doors how many of you idiots will blame Obamacare? Personally I hope it doesn't come to their closing. But if something violated my beliefs as bad as this does theirs I would close the doors. Then all you idiots infringing on their beliefs can provide jobs for everyone layed off. Maybe this would send a good message to people fawning over our current adminatration.

    January 13, 2013 at 10:01 pm |
    • Larry L

      I have shopped at Hobby Lobby many times. That will never happen again.

      January 13, 2013 at 10:03 pm |
    • Ingourious

      By "their beliefs" you mean the employer's beliefs. Don't you care about the employee's beliefs and their right to be free from religious coercion by their employers? It is far cheaper for the insurance company to pay for prescriptions than to pay for child birth and care, so this is not a financial argument.

      January 13, 2013 at 10:40 pm |
  4. Ellen Barks

    Hobby Lobby is not telling their employees they can’t use birth control (ie pills, surgeries or abortion)..they are only refusing to become complicit in it by paying for those services. They have always provided all other health care to their employees and will continue to do so. Please get the facts straight.

    January 13, 2013 at 9:45 pm |
    • Larry L

      Hobby Lobby is implying their employees who use birth control are immoral. Would they discriminate against those they consider "immoral".

      It's 2013 and we have people who consider birth control pills "immoral". Ever wonder why the right-wing is being left behind by the American people?

      January 13, 2013 at 9:55 pm |
    • Dan C

      So if the employee goes out and purchases an abortion (which these pills are NOT) with Hobby Lobby pay, wouldn't that be considered the same thing?

      January 13, 2013 at 9:56 pm |
    • barbraS

      They should not be making that decision for their employees. Birth Control is a part of all around health care. Next, they won't cover lung cancer because they don't approve of smoking. Etc. Etc.

      I will be avoiding Hobby Lobby from now on.

      January 13, 2013 at 9:57 pm |
    • Indecline

      Why does providing proper health coverage contravene their religious beliefs? The Act does not require the employer to use birth control. I am a Catholic, I don't see why the company can't comply, other trying to score political points and avoiding paying for health care

      January 13, 2013 at 9:59 pm |
    • Fan

      That logic is flawed. If an employee goes and purchases an abortion with Hobby Lobby pay it is basically like Hobby Lobby paying for it. They've funded the employee. Regardless of if they pay using health insurance or pay out of pocket, the money is coming from the same source.

      January 13, 2013 at 10:02 pm |
    • Larry L

      Hobby Lobby is refusing to give their employees a choice! What some radical freak at Hobby Lobby thought surgery was "against God's way"...? Should that religious viewpoint justify restriction of surgical procedures? How about an abortion to save the mother's life? Should the executives get the opportunity to make that call? How about the children produced by mothers who didn't want them and couldn't feed them on the crappy money they make at Hobby Lobby? Will the religious radicals who run that place pay for the raising of those kids?

      January 13, 2013 at 10:02 pm |
    • Justin

      Hobby Lobby's religous rights(which are absolutely none since it is a company and NOT a person – What church has Hobby Lobby become a member of?) do not preclude the freedom of the employees to not have their employers beliefs forced on them. If Hobby Lobby were Muslim owned and they required females to wear a burkha and not allow pork products in the lunch room would everyone be so supportive?

      January 13, 2013 at 10:11 pm |
    • kenny

      its a bogus argument. they pay taxes. taxes go for everything, a lot of which is against whatever delusional religious beliefs you have. I served two tours in Iraq and saw lots of innocent people get killed in an illegal and unjust war paid for by YOUR TAX DOLLARS. YOU are paying for your employees healthcare. If it subsidizes things YOU don't agree with tough shhhhh... YOU can choose not to do those things and your employees can do the same. WE LIVE IN A SECULAR society. that means, for u xtians that don't seem to get it, WE DON'T FOLLOW xtianity or any other set of religious b s.

      January 13, 2013 at 10:19 pm |
    • Michael

      Ellen, there's no reasoning or even intelligent discourse with these folks. Your motivation is laudable but don't expect much from them...it's their way or the high way. In any case, in about 12 months from now Obamacare is going to be in a huge world of hurt as this ill-conceived monstrosity continues to cripple our economy.

      January 13, 2013 at 10:41 pm |
  5. Calvin

    The killing of babies has to stop. Obama has innocent blood on his hands. But he can change.

    January 13, 2013 at 9:43 pm |
    • Larry L

      Birth control pills is "the killing of babies"? Moron. Go to school.

      January 13, 2013 at 9:57 pm |
    • Gir

      They care about babies - till they leave the womb.

      January 13, 2013 at 10:05 pm |
    • 0G-No gods, ghosts, goblins or ghouls

      So Obama is personally responsible for the 700,00+ believers that have gotten abortions in the USA each year for far more than the last 5 years?

      January 13, 2013 at 10:11 pm |
  6. KellyF

    Hobby Lobby has no right to force its beliefs on it's employees. This is the UNITED STATES OF AMERICA. This country was founded on FREEDOM. This idiot needs to leave the USA an go to a country that pushes religion on it's people.

    January 13, 2013 at 9:43 pm |
    • Ellen Barks

      Kelly...please read my post above.

      January 13, 2013 at 9:49 pm |
    • Larry L

      Ellen... read your own comment. People who have insurance need the benefits. Hobby Lobby isn't in the position to make religious decisions for every employee. You aren't in the position to make moral decisions for everybody else. That's what's wrong with the religious right-wing. You can't simply mind your own business and quit trying to legislate morality. You are driving people away from the church and making yourselves appear foolish and out of touch with reality. Women use birth control pills and it's not "killing children"... regardless of what a bunch of old pedophiles in Rome have to say.

      January 13, 2013 at 10:08 pm |
  7. jbazingo

    I believe each one if will eventually have to account for our sins. So, I believe there is more than just this earthly life. That's me. Killing babies has to be a big one. I seriously doubt God is going to look to Roe v Wade for an opinion. Hilarious. If that doesn't make sense and you are hell bent on killing babies. Adiós. Say what you want in reply now. But, you might want to spend a few nights working on a defense ... just in case you are wrong. SCOTUS. Hahahahahaha. God, SCOTUS said that wasn't really life. Hahahahah. One word: "Nuremberg". Hahahah. Those lives will be restored and yours while you drop to your knees and beg for forgiveness. Good luck with that plan. Maybe your only saving grace is that God is a loving and kind and fire giving god, because if it were up to me, on that day, I would break those strong advocates of killing (my) babies like a lightbulb on a concrete floor. Practice my friends. Practice your defense.

    January 13, 2013 at 9:35 pm |
  8. Grden Valley 6

    Hobby Lobby can make that decision. They are paying the insurance. If they don't want that provision in the policy that's fine.

    January 13, 2013 at 9:34 pm |
    • Justin

      That was fine before it became part of the law that they MUST provide it. THere is a religous exemption but Hobby Lobby is NOT a church or a church organization.

      January 13, 2013 at 10:14 pm |
  9. tony

    Here we go again... Religion not practicing what they preach! So, THEY own stocks in healthcare that provide what THEY want others not to benefit from, etc. etc. Case close..so..pay up hypocritical workers of breaking CAESARS LAW!! P.S. see Mathew 7:1-5, 23 in your own Bible and LET GOD be the judge!!!

    January 13, 2013 at 9:11 pm |
    • Logic

      Tony, taking one part of the Bible out of context and using it to your benefit does not make any kind of good argument. Christians believe in the WHOLE Bible. Not sure what you mean about "THEY" owning stocks in healthcare. THEY (Hobby Lobby) runs their own insurance plan that does not provide services and drugs that are not compatible with their religious beliefs.

      January 13, 2013 at 9:26 pm |
  10. manycatsonekid

    I'll say this once more: IF your business is 100% religious-based, IF you only hire people from within your religious sect, IF you only deal with people from within your religious sect, and IF you ONLY deal with any suppliers, vendors, transport systems that are made up of those from within your particular sect–only then do you get to make the choice to claim your religion is exempt from all secular law. Even Jesus said "render unto Caesar" and obey the laws of the land.

    January 13, 2013 at 8:55 pm |
    • Logic

      OK then, I demand that all vegan restaurants start selling hamburgers. How dare they impose their deeply held beliefs on me! I'm a MEAT EATER! I have RIGHTS!

      January 13, 2013 at 9:01 pm |
    • Logic

      AND... I demand that they only hire other vegans.

      January 13, 2013 at 9:03 pm |
    • J.W

      That is a horrible analogy. Of course a vegan restaurant would not have to sell hamburgers, but they cannot tell their employees they cannot eat hamburgers.

      January 13, 2013 at 9:04 pm |
    • Logic

      Now that I've said that bit of silliness, you're telling me that I have to have _ABSOLUTELY NO CONTACT WITH ANY OTHER PEOPLE ANYWHERE THAT HAVE DIFFERENT BELIEFS THAN ME_ in order to qualify for keeping my deeply held beliefs in everything I do?

      And JW, really? I am being forced to go against my deeply held beliefs by this law. Are you saying that a vegan should not have to leave their beliefs at home? How on earth is that fair? And as far as imposing their beliefs on their employees, nobody was forced to apply for a job at Hobby Lobby. Not one. If you disagree, take your business elsewhere. That's what freedom is about. They are not a government agency or public property. They are a private business, owned and operated by people with beliefs. These beliefs are ones on which they base their entire lives, not just their home lives. Tell me why you get to tell them how to run their business?

      January 13, 2013 at 9:16 pm |
    • Ellen Barks

      JW, of course they can't tell their employees they can't eat hamburgers, neither is Hobby Lobby telling their employees they can't use birth control (ie pills, surgeries or abortion)..the are only refusing to become complicit in it by paying for those services.

      January 13, 2013 at 9:20 pm |
  11. amber

    Good Job Hobby Lobby!!!! Obamacare sucks!

    January 13, 2013 at 8:42 pm |
    • Michael

      Just wait...in another six months some of the real hidden costs of Obamacare are going to be seen, and in 18 months Dems are going to be tossing each other aside to dissociate themselves from it before the elections. Obama's only legacy will be leading the country to mediocrity and debt that will take us many many decades to resolve...all because some people fell for someone who is waaaaay more style than substance.

      January 13, 2013 at 10:27 pm |
    • Tom, Tom, the Piper's Son

      Oh, look. You have crystal balls. Yippee!

      January 13, 2013 at 10:29 pm |
  12. TAZTlh

    Hobby Lobby is making a decision for their employees that is none of their business.

    January 13, 2013 at 8:38 pm |
    • CM

      Maybe you should go work for them so they can make decisions about your life too, since you are supportive of such a concept.

      January 13, 2013 at 8:54 pm |
    • CM

      cancel that, no delete button and missed the "none"!

      January 13, 2013 at 8:55 pm |
    • Thinker

      Hobby lobby can kiss my ass, and not get any more of my money. Its not very "christian" to deprive their employees health care. Pure sleeze.

      January 13, 2013 at 9:32 pm |
    • Ellen Barks

      Hobby Lobby is not telling their employees they can’t use birth control (ie pills, surgeries or abortion)..they are only refusing to become complicit in it by paying for those services.

      January 13, 2013 at 9:38 pm |
    • gloria P

      "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." I think it is important to read CERTAIN types of birth control. MANY forms of "birth control" are actually abortive. I may be assuming incorrectly but I assume those are the ones spoken of.

      January 13, 2013 at 10:18 pm |
  13. Terri

    Hobby Lobby is making a decision for their employees that should be their private affair.

    January 13, 2013 at 8:36 pm |
    • Ram

      If it's private then the employee can pay for it.

      January 13, 2013 at 9:01 pm |
    • dan

      Yeah Ram because Hobby Lobby is privy to all private healthcare decisions of their employees.

      January 13, 2013 at 9:51 pm |
  14. Scottish Mama

    I remember someone said," Hobby Lobby holds stock with Teva Pharmacies." When they want to make a buck on stocks it is okay to put money behind the company that makes money from the pill. Just do not let the workers use it.

    January 13, 2013 at 8:24 pm |
    • Kiki

      They don't seem to have any problem peddling lead ladened crap made by child slaves in China either.

      January 13, 2013 at 9:09 pm |
  15. Pirate65

    I will continue my perpetual boycott of their store. I can buy art supplies from law-abiding people at Michael's.

    January 13, 2013 at 8:22 pm |
    • Calvin

      You support the killing of babies. Sleep well.

      January 13, 2013 at 9:45 pm |
  16. Scottish Mama

    Obamacare may not be perfect, but we can work together to have insurance for everyone and change what is not working. Said by President Obama.

    January 13, 2013 at 8:18 pm |
  17. samstubbs

    I also believe that abortion is wrong. But I also believe that if you choose to have one, that is up to you; though I think in most cases that's an incredibly calloused and selfish thing to do. I DON'T however believe that forcing someone else to pay for your abortion is right in any way. If you want a Health Plan that pays for an abortion, work for a different company, or pay for it yourself. People, take responsibility for your own actions and choices!

    (I do understand that in certain health situations, or ra-pe, or inc-est, or abuse, there may be exceptions, and something could be worked out.) But other than the exceptions, it's not really a difficult concept: if you don't want to get pregnant, don't have s-ex! duh! And definitely don't force other people to pay for your dumb choices. Good grief!

    January 13, 2013 at 8:17 pm |
    • Scottish Mama

      I believe that is why women take contraceptives to prevent pregnancy.

      January 13, 2013 at 8:20 pm |
    • Pirate65

      If you don't believe in abortion, don't have one. Can you even have one to begin with? Are you female?

      January 13, 2013 at 8:29 pm |
    • Ingourious

      Let's say the owner's of Hobby Lobby were devout Jews or Muslims, and don't eat pork. Would they be right to deny healthcare coverage for their employees who became ill from pork-related trichinosis? Under US laws, employers cannot punish or discriminate against employees who do not hold their same religious beliefs.

      January 13, 2013 at 8:30 pm |
    • Kiki

      Lousy strawman. This isn't about abortion it's about contraception.

      January 13, 2013 at 9:02 pm |
    • Ellen Barks

      Ellen Barks says: January 13, 2013 at 9:20 pm

      JW, of course they can’t tell their employees they can’t eat hamburgers, neither is Hobby Lobby telling their employees they can’t use birth control (ie pills, surgeries or abortion)..the are only refusing to become complicit in it by paying for those services.

      January 13, 2013 at 9:29 pm |
    • Kiki

      Ellen If a company offers a prescription drug plan as part of their insurance plan (which is part of compensation an usually includes hefty premiums on the part of employees) then it should cover prescriptions period. Doctors should decide what medications patients take...not businesses.

      January 13, 2013 at 9:36 pm |
    • Ellen Barks

      Kiki, you have the answer partly right...you have to read the formulary offered by the policy the company offers. Each ins. policy has it' own formulary. It has always been that way.
      And if Hobby Lobby is providing the insurance they should be allowed to provide one that does not compromise their religious beliefs.

      January 13, 2013 at 10:08 pm |
  18. The Other Bob

    They aren't a religious organization, and prescription birth control doesn't induce abortion. Let the fines begin!

    January 13, 2013 at 8:17 pm |
  19. tony

    Human Beings have Consciences and Morality. Corporation only have Legal Departments and Shareholders who only require Profits. Something Republicans somehow manage to reconcile in their minds as they take their 30 pieces of Silver every election.

    January 13, 2013 at 8:17 pm |
  20. Scottish Mama

    Many have taken PPACA to court and failed.

    January 13, 2013 at 8:16 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 with contributions from Eric Marrapodi and CNN's worldwide news gathering team.