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December 27th, 2012
07:20 PM ET

Hobby Lobby faces millions in fines for bucking Obamacare

By Eric Marrapodi, CNN Belief Blog Co-Editor

Washington (CNN)– Craft store giant Hobby Lobby is bracing for a $1.3 million a day fine beginning January 1 for noncompliance with the Patient Protection and Affordable Care Act, dubbed Obamacare.

The company opposes providing some contraceptives to employees through its company health care plan on religious grounds, saying some contraceptive products, like the morning after pill, equate to abortion.

After failing to receive temporary relief from the fines from the Supreme Court, Hobby Lobby announced late Thursday through its attorneys 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.

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"All they're asking for is a narrow exemption from the law that says they don't have to provide drugs they believe cause abortions," Hobby Lobby attorney Kyle Duncan, a general counsel for the Becket Fund for Religious Liberty, told CNN affiliate KFOR in November. "Our basic point is the government can't put a corporation in the position of choosing between its faith and following the law."

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 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."

In the face of that opposition, the Department of Health and Human Services tweaked its original rule in February to require health insurers, not employers, to cover the cost of contraception coverage, reasoning that would prevent religious groups from having to finance such coverage. Critics have argued that exemption for nonprofits is far too narrow and a host of nonprofit religious groups have sued the administration over the regulations.

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.

The Oklahoma City, Oklahoma, 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. The company's attorneys say January begins a new health care plan year for Hobby Lobby and that excise tax from the IRS would amount to $1.3 million a day.

Hobby Lobby is owned 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. Each year the company also takes out full-page ads in numerous newspapers proclaiming its faith at Christmastime and on Independence Day.

The store is not formally connected to any denomination, but the Green family supports numerous Christian ministries and is behind the Green Collection, one of the largest private collections of biblical antiquities in the world. The family plans to permanently house the collection in Washington at a museum set to open in 2016.

On Friday, attorneys for Hobby Lobby petitioned the Supreme Court to intervene and provide temporary relief from the the fines until the case was decided by the U.S. 10th Circuit Court of Appeals in Denver.

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Wednesday evening, Justice Sonia Sotomayor, who handles emergency appeals from the 10th Circuit Court, said the company failed to meet "the demanding standard for the extraordinary relief," and that it could continue to pursue its challenge in lower courts and return to the higher court, if necessary, after a final judgment.

"Hobby Lobby will continue their appeal before the 10th Circuit. The Supreme Court merely decided not to get involved in the case at this time," Duncan said in a statement.

A spokesperson for the Justice Department declined to comment on the high court's move.

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.

"It's just so sad that Hobby Lobby is facing this choice. What company, even a successful family owned business like Hobby Lobby, how can they afford the government $1.3 million in fines every day? It's just really absurd that government is not giving on this," said Maureen Ferguson, a senior policy adviser for the Catholic Association. Religious liberty groups like hers are watching the Hobby Lobby case closely.

"I am optimistic that these cases will eventually snake their way back up to the Supreme Court and given a full hearing on the merits of the case, I am confident that the Supreme Court will rule in favor of religious liberty," Ferguson said. "But in the meantime there is serious damage being done to businesses like Hobby Lobby and nonprofit charitable organizations."

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.

After this piece of the law went into effect in August, religious nonprofits were given "safe harbor" of one year from implementing the law. "In effect, the president is saying we have a year to figure out how to violate our consciences," Cardinal Timothy Dolan, the Archbishop of New York, said in January when the administration announced the move.

Dolan's New York Archdiocese won a victory this month in its legal battle against the administration and the mandate. In May it sued the government in federal court in Brooklyn over the mandate, saying it "unconstitutionally attempts to define the nature of the church's religious ministry and would force religious employers to violate their consciences."

The government moved to have the case dismissed. On December 4, Judge Brian M. Cogan denied the government's motion to dismiss the case, saying the government's promise of changes to how it will implement the law were not enough to merit dismissal. "There is no, 'Trust us, changes are coming' clause in the Constitution," Cogan wrote in in his decision to let the case proceed.

UPDATE: Hobby Lobby's $1.3 million Obamacare loophole

- CNN Belief Blog Co-Editor

Filed under: Belief • Christianity • Church and state

soundoff (5,627 Responses)
  1. Angel Moronic

    Hobby Lobby is following its core religious principle the golden rule: Love thy fellow man . ( Nothing in the bible say anything about love thy fellow woman (wink) ) So viagra is OK but no other little pills

    December 28, 2012 at 4:45 am |
  2. g.r.r.

    Interestingly, a republican SCOTUS decided in late 1800 that the gov. controls when it comes to businesses wanting religion. For example, what would happen if you have a religion that demands a human sacrifice? With what the neo-cons want, businesses (or ppl) could actually sacrifice somebody.
    That is why gov. rules to prevent this.

    December 28, 2012 at 4:35 am |
    • Tortfeasor

      It is a very slippery slope....there's really no other rational way for the court to rule on these issues...

      December 28, 2012 at 4:40 am |
    • cassius

      Can a orthodox jewish owned business tell its emplyees that they cant use their paychecks to buy pork? Or will the govt "force" them to use their money to pay for pork for their employees?

      December 28, 2012 at 5:05 am |
  3. Mark Davis

    can a man use his insurance to buy condoms. or is it only women that get the free contraception?

    December 28, 2012 at 4:17 am |
  4. worldcares

    My favorite verses from the bible are Matthew 19-21:
    Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal:
    But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal:
    For where your treasure is, there will your heart be also.

    Adding verses 22 and 23:

    The light of the body is the eye: if therefore thine eye be single, thy whole body shall be full of light.
    But if thine eye be evil, thy whole body shall be full of darkness. If therefore the light that is in thee be darkness, how great is that darkness!

    To conclude, I add Matthew 7:

    Judge not, that ye be not judged.

    For with what judgment ye judge, ye shall be judged: and with what measure ye mete, it shall be measured to you again.

    December 28, 2012 at 3:59 am |
  5. myuntidydesk

    For those of you who believe Hobby Lobby has the right to not provide the morning after pill, look at it this way... maybe one day you will need a medication that your employer does not believe you should be taking. It is not up to ANY company to decide which medicines are holy enough for their employees take.

    December 28, 2012 at 3:55 am |
  6. Joe B

    So let me get this straight. Religious folks want to pass laws that force the rest of US citizens to adhere to their religious doctrine, yet have a hissy-fit when the people want of all religious denominations want laws that impact them?

    Does that pretty much cover it?

    December 28, 2012 at 3:51 am |
  7. Roger Ogilvy Thornhill

    Hobby Lobby, the anti-gay company, isn't having it's religious freedom infringed upon. They are free to practice whatever religion they want. They will also have to comply with the laws of the U.S. which means they will be providing whatever healthcare options the law says they need to provide. Should Jehovah's witness religious CEOs be able to prevent coverage for blood transfusions for their employees? NO. Should Jewish CEO's be able to deny coverage for pig heart valves? NO. Hobby Lobby has a silly argument - nobody's religion is being eroded here. It's a ruse.

    December 28, 2012 at 3:46 am |
  8. lance corporal

    this is a for profit business not a church.............

    wow I just realized what I wrote and most churches are for profit businesses too

    December 28, 2012 at 3:41 am |
  9. jdoe

    Conservatives should support universal health care. Then people don't need to depend on their employer for health care, and companies like Hobby Lobby don't need to provide for any coverage they don't want to.

    December 28, 2012 at 3:39 am |
    • Peter

      Far right religious organizations are starting to realize their mistake in this area. Probably too late though.

      December 28, 2012 at 3:46 am |
    • TruthPrevails :-)

      Hobby Lobby offers medical coverage for their employee's and unless they stop doing this, they have no choice but to follow the law.

      December 28, 2012 at 4:40 am |
  10. Jo Hargis

    Hey, if this guy, Green, wanted to make this his defining issue, he should have opened a religious store or a church or something. What a total crock of crap he's trying to pull. It's none of his damn business what his employees use for health care or reproductive choices. Good grief, he acts like he's personally handing them an abortion pill, which is ridiculous. Funny how companies like this have been doing this for years; now suddenly because the extreme right wing nutjobs need an issue, they decide to cry about it. What a bunch of hypocrites. Keep it up, nutjobs. America is getting more and more fed up with your crap every day that goes by.

    December 28, 2012 at 3:38 am |
    • mique

      Amen!

      December 28, 2012 at 4:48 am |
  11. Scott

    There will come a time when there is true seperation of church and state. Then if you are not a religious organization using your funding for specific religious actions (not profits) you will get no exemptions from the US Government. What gives Hobby Lobby the right to be exempt from goverment law in business any more than my small business. Is it because it is worth millions or is it because they can afford lawyers. I object to exceptions that effect employees that may not share your personal religious beliefs. You can not descriminate in hiring by religion, you should not descriminate in your employees medical coverage because you do not believe in a treatment that is legal.

    So as an employer, if I do not believe in blood transfusions for religious beliefs, should I also not cover that? Don't believe in doctors only prayer, so I do not have to cover any employees? Hobby Lobby should pay a fine or comply.

    December 28, 2012 at 3:26 am |
    • FKell

      I have to agree with you. What gives anyone the right to force their religious values/beliefs on anyone else? The company may not like the fact that abortion is legal, and contraceptives are legal, and say that they don't condone their use, but they have no right to force those beliefs on people who are employed by them.

      December 28, 2012 at 3:43 am |
  12. Wigglymump

    Me too! Uh...I don't want to pay $300 to fix my van's power stearing...hmmm...oh..."I believe that power stearing is a god given right of all who own a vehicle, and that paying for it is like trying to bribe god to get into heaven"...can I get an exception too? No? Hmmm...ok...uh, *I* may/may not believe that, but my business believes that and it told me it doesn't want to pay because of religious objections. Hey, it's not me...it's my business's religious beliefs, it needs a "narrow exception". KTHXBY!

    December 28, 2012 at 3:24 am |
  13. CMB1255

    Mark Davis:
    No, I didn't forget that corporations are people. However, corporations do not practice religion.

    December 28, 2012 at 3:22 am |
    • Phil

      I started a small business about 6 months ago. It is just me running it. I am registered as a corporation. I am a person.

      December 28, 2012 at 4:02 am |
    • cassius

      a corporation is not a person....a person can own a corporation. I own a home, I am not a home, nor is my home a person.

      December 28, 2012 at 5:10 am |
  14. DNA

    My religion says I must have an abortion every six months. HOW DARE HOBBY LOBBY INFRINGE ON MY RELIGIOUS RIGHTS??? SHUT THEM DOWN SHUT THEM DOWN !!!!

    December 28, 2012 at 3:19 am |
  15. sarah

    Sorry but business should not have religious preferences. They aren't people. If you disagree with birth control then you as an individual don't have to take it. A business doesn't need birth control because it cannot reproduce therefore businesses aren't people and should not have an opinion about what it's required to provide for its employees. AND a business should not be able to push its religious or moral beliefs onto it's employees. THAT is forcing your beliefs onto others and should be illegal.The only thing a business should concern itself with is whether or not the employee is able to do his or her job.

    December 28, 2012 at 3:19 am |
  16. CMB1255

    "Our basic point is the government can't put a corporation in the position of choosing between its faith and following the law."

    Isn't breaking the law also a sin???? And, since when did a corporation belong to a certain faith? I never saw a corporation in my church; only people.

    December 28, 2012 at 3:14 am |
    • Mark Davis

      corporations are people too according to the supreme court. or did you forget about that?

      December 28, 2012 at 3:17 am |
  17. Rationalintn

    Yet another example of why health insurance should not be the responsibility of employers.

    December 28, 2012 at 3:13 am |
  18. VicMorrow

    Forcing a company to fund child murder is a simply unbelievable abuse of government authority.

    December 28, 2012 at 3:08 am |
    • TheRationale

      The Inquisition called, they want their ignorant backwards ideas back. Want to know a surefire way to increase teen pregnancies and abortions? Preach abstinence only and deny people access to contraceptives. Great move.

      December 28, 2012 at 3:38 am |
    • TruthPrevails :-)

      Vic: The government is supporting child murder! They are supporting equal rights for all and enforcing the law. If you do not wish to have an abortion due to your absurd belief's, feel free not to do so but as with your belief, you do not have the right to infringe it upon anyone else.

      December 28, 2012 at 4:38 am |
  19. Mark Davis

    i would just close the all the stores out of spite and call it a, day. if i owned hobby lobby.

    December 28, 2012 at 3:06 am |
    • Larry

      They are pretty much on the verge of closing as it is. Hobby Lobby is the Circuit City of the retail hobby industry. While it has the ability to leverage mass purchasing power it can't compete with the purchasing power of box stores. The real threat to its continued existence is local hobby stores and its own poor management. It refuses to invest in staff that are knowledgeable about its products resulting in its inability to compete with mom and pop hobby shops. Left to its own devices it will be out of business in about five years.

      December 28, 2012 at 3:44 am |
    • cassius

      great idea...close your business and crawl in a cave somewhere. They formed the business to make money, they will still make money. closing the business over this would be insane.

      December 28, 2012 at 5:12 am |
  20. Robyn

    .

    All I am asking for is a narrow exemption, that says that I don't have to obey any law I disagree with.

    .

    December 28, 2012 at 2:57 am |
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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.