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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. TomNPitt

    If your religion won't let you provide your employees with contraceptive care as part of their insurance coverage, then the simple solution is for these organiztions to provide free health care, and cash bonuses for the employees who become pregnant while in their employment. If you have no desire to prevent it – then you should provide a major benefit care resulting from that decision. I'm tired of people ducking ther responsibilities by blaming others for actions they themselves have created. Pay now – or pay later!!

    December 28, 2012 at 9:27 am |
  2. Crafter

    Hobby Lobby can not force it's religion on me – it will NOT see another penny from me

    December 28, 2012 at 9:26 am |
  3. LeeCMH

    Christians doing what they do best, being hateful.

    December 28, 2012 at 9:26 am |
  4. rockysfan

    Good, I hope you pay and pay dearly. Keep your religious fanaticism to yourself, nobody else needs or wants it or YOU!

    December 28, 2012 at 9:24 am |
  5. Get Real

    Typical Christian CEO. Yeah, he is so Christian, I bet he cheats on his wife and does coke like most other high powered exec's and CEO's too! I can guarantee this will not be won by Hobby Lobby, as long as there is 1 Jewish or Muslim person working there, his "Christian" defense is out the window.

    December 28, 2012 at 9:21 am |
    • Bill Deacon

      So his tactic should be to fire all the Jews and Muslims? Then go buy some more coke?

      December 28, 2012 at 9:23 am |
    • Pete

      Not a bad idea Bill, but if it is anything like where I work then the Jew and the Muslim are the only two employees worth a dam.

      December 28, 2012 at 5:07 pm |
  6. Marcia

    BUT I will bet they gladly pay for Viagra-Companies should NOT put their religious beliefs into employees health care-I did not agree with my taxes being used for the Iraq war but I still had to pay the taxes

    December 28, 2012 at 9:20 am |
    • Bill Deacon

      Why do people conflate taxes with forced health care coverage?

      December 28, 2012 at 9:22 am |
    • Brian

      Actually they don't because most insurance plans treat ED medicines as lifestyle drugs that aren't covered. Your doctor has to show that the drug is intended to treat some condition other than (or in addition to) ED.

      December 28, 2012 at 9:30 am |
  7. Wonderer

    It is amusing that we differentiate between someone who says "I don't agree with that" and one who says "that is against my religion". Why give credence to one and not the other? We defer way too much to religion.

    December 28, 2012 at 9:19 am |
  8. nothing new here

    I believe that Gov. Bobby Jindal made a great case for making birth control pills "over the counter".

    December 28, 2012 at 9:15 am |
  9. George

    The Mormons just hate Obama so much that they are willing to pay millions a day to make their stupid point. Obamacare, love it or hate it, is the LAW. Comply or pay the fine and shut up.

    December 28, 2012 at 9:15 am |
  10. TrueGreen

    "When followers of a particular sect enter into commercial activity as a matter of choice, the limits they accept on their own conduct as a matter of conscience and faith are not to be super imposed on the statutory schemes which are binding on others in that activity."

    –Antonin Scalia

    December 28, 2012 at 9:15 am |
    • rockysfan

      True dat!

      December 28, 2012 at 9:27 am |
  11. Ryan Dygulski

    The morning after pill does not equate to abortion. The morning after pill prevents fertilization. If fertilization has already occurred the pill will not work. Pay the fines Hobby Lobby, your wrong in your assessments.

    December 28, 2012 at 9:13 am |
    • Bill Deacon

      If I understand correctly, their argument is not the efficacy of the medications or even the rights of their employees to use them. It is whether the federal government has the authority to impose fines on them while the case is being adjudicated.

      December 28, 2012 at 9:25 am |
  12. child of midian

    Such a load of crap, they are NOT paying for abortions! What garbage! if it makes them feel better they can say the percentage that the employee pays can cover birth control. Whatever. The doctor / patient makes the call and the insurance pays. Many insurances already did this! They find it's cheaper to prevent births than to pay for them. This is just political, it's all about making a statement, but they are on ice so thing it's rippling from the water they are about to fall into.

    December 28, 2012 at 9:13 am |
    • Bill Deacon

      If you are willing to allow the employee contribution cover the cost of contraception, why not make it a rider on the policy and allow the Green family to preserve their beliefs at the same time? That way employees who want it can get it and those who don't won't have to subsidize the cost.

      December 28, 2012 at 9:29 am |
  13. Dave

    Attempting to bring religion into a government decision is ludicruous. The CEO doesn't need birth control, and his objections are all his personally. The decision is most likely NOT shared by the workers and since they are the majority of the company, the CEO should just back off and shut up.

    December 28, 2012 at 9:09 am |
    • Bill Deacon

      Yeah! Workers Unite!

      December 28, 2012 at 9:30 am |
  14. SJ

    Why would anyone think it's okay for a company to try to control the personal lives of their employees? This is why we need regulation, to keep self-righteous company execs like those at Hobby Lobby from forcing their views on employee's bodies.

    December 28, 2012 at 9:09 am |
    • Phil

      Work somewhere else

      December 28, 2012 at 9:14 am |
    • WASP

      hmmmmm yeah you still lose.
      supreme court up held it's verdict, if they fail to cover their employees they get fined.
      DAM ISN'T AMERICA GREAT. I LOVE THIS COUNTRY I FOUGHT FOR.

      December 28, 2012 at 9:20 am |
  15. Basher

    They should shutter the place and blame it on the Democrats.

    December 28, 2012 at 9:08 am |
  16. Dann

    New respect for Hobby Lobby. I don't agree with them but they are the first company I can recall to put their money where their mouth is and pay more in fines than they would for the additional insurance coverage. This (for now) is not the false indignation that I am used to seeing from the extreme right.

    December 28, 2012 at 9:07 am |
    • Steve - Texas

      Fines don't begin till Jan 2013...

      December 28, 2012 at 9:10 am |
    • Bill Deacon

      I look for late breaking news today on this story.

      December 28, 2012 at 9:31 am |
  17. ElectricLion

    It's against the religious beliefs of the corporation? Excuse me? Corporations don't have religiousw beliefs. People have religious beliefs. I have no problem with the president, ceo, or chairman of the board being a closed-minded bigot who thinks women are second-class citizens (Actually, I do, but I also respect a person's right to believe as he chooses, regardless of how stupid his beliefs may be in my opinion) but to force his entire business organization to adhere to his draconian beliefs should be a crime. Looks like there should be a separation of church and business to go along with the separation of church and state.

    December 28, 2012 at 9:01 am |
    • Bill Deacon

      Read a book

      December 28, 2012 at 9:32 am |
  18. chuck

    Too bad for HL ..it simply does not matter if you dont "believe" in abortion. Its legal. So if I dont "believe" in fuel taxes I should get a discount at the pump right? Stupid is as stupid does.

    December 28, 2012 at 8:57 am |
    • JeremyH6

      Wrong. Abortion is ILLEGAL in just about every state in this country.

      December 28, 2012 at 9:03 am |
    • TruthPrevails :-)

      JeremyH6: You're an idiot!! Abortion is not illegal in your country anywhere...thus the reason for Roe v Wade which guarantee's it isn't.

      December 28, 2012 at 9:07 am |
    • Steve - Texas

      JeremyH6 says:
      December 28, 2012 at 9:03 am
      Wrong. Abortion is ILLEGAL in just about every state in this country.

      What country you living in? In America a woman has a Right to abort a fetus....read the Roe V Wade decision

      December 28, 2012 at 9:08 am |
    • WASP

      @jeremy: WRONG ABORTION CLINICS ARE IN ALMOST EVERY STATE IN THE UNION.
      it is called FREEDOM OF CHOICE.
      you religious types enjoy your right to choose to deny everyone else their rights to choose.

      December 28, 2012 at 9:10 am |
    • MilitaryAF

      @JeremyH6, What part of Latin America do you live in? Here in the U.S., abortion is a federally protected procedure.

      December 28, 2012 at 9:12 am |
  19. Fladabosco

    I hope these companies do get fined. What their employees do with their health and their health care is NONE OF THE COMPANY'S BUSINESS. They should just butt out and let the employees decide if they want contraception or not.

    December 28, 2012 at 8:56 am |
    • Scrappyike

      Not when the company pays for their health insurance. Right now, a company chooses what insurance to use and what types of coverages. So Fladabosco, it is the company's choice, If the employees do not like it, they can work elsewhere.

      December 28, 2012 at 8:59 am |
    • Simon

      Mo one is saying that employees can't use contraceptives, just don't make the employer pay for them when it goes against their belief, it should be up to the business.

      December 28, 2012 at 9:06 am |
    • Norm

      If you want the company to butt out of the employee's decsion then they should be able to butt out of paying for the employee's decsion too.

      December 28, 2012 at 9:07 am |
    • Wonderer

      Everyone pays for something they don't agree with – tough beans HL. Didn't we refund the Quakers' taxes because they didn't believe in war?

      December 28, 2012 at 9:12 am |
    • WASP

      @simon: and what if it's against the companies belief to contact medical attention for you if you are shot in their store?
      what you going to do drag yourself outside and cry for help?
      idiot if the government (thankfully they didn't) allowed this company a freebe then other companies would use the same tactic to subvert the law.
      how about your children? should your company be allowed due to religious faith to say bring them to work for us as well.

      December 28, 2012 at 9:15 am |
    • ladyscot

      My feeling is that if you do not agree with the Bible and intend to support it, then do NOT go to work for a Christian company. Period. There are millions of businesses that do support everything under the sun. Go work for one of them. But if the rules and beliefs of a business are against your own, then why work there? It is NOT right for the government to force ANYONE to go against their beliefs. How about they force YOU top go against yours? Still fair?

      December 28, 2012 at 9:29 am |
    • Bill Deacon

      All good companies are run on financial basis. As a business decision, I wonder if the board of directors has considered cancelling medical insurance coverage as part of their compensation package. Then the employees could get on the Federally funded system and the taxpayers could provide this coverage for the 13,000 additional people. If a good number of companies did that then a lot of people would be on the government system. I wonder if that isn't the strategy anyway.

      December 28, 2012 at 9:38 am |
  20. CSX

    Gov: Thou shalt help them to kill.

    December 28, 2012 at 8:55 am |
    • WASP

      @CSX: yeah but we can all see how well you religious fanatics adhere to "thou shalt not kill"
      it tends to be optional with you freaks, plus it's not killing and if you don't want to use the "day after pill" THEN DON'T.

      YOU RELIGIOUS TYPES ARE SO IGNORANT.
      why is it the rest of us understand that it is only placing the option on the table, not forcing it into your mouth?

      December 28, 2012 at 9:05 am |
    • child of midian

      "Gov: Thou shalt help them to kill." except with assault weapons or by lethal injection.

      December 28, 2012 at 9:16 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.