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.
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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.
Sad to see how we have devalued human life and so gladly laid our personal freedoms on the altar of greed and convenience. One by one, Obama and his cronies will suck every last dollar and freedom out of each and every taxpayer until nothing's left. Then Obama will blame someone else and jet off to Hawaii for another $4 million vacation, writing IOUs on our childrens' backs all the way. What a disaster, but hey, we asked for it!
Oh brother. Want a little cheese to go with that whine?
And this is different from the last few administrations how?
Awww, poor baby. Must suck to be you.
How is this devaluing life or infringing on anyone freedoms? Oh wait the freedom of Hobby Lobby corporate ownership to tell it's employees it's our way or nothing! If you look at what the medication that they are fighting actually does in the body you will realize that there is no human life there to value or devalue at that point.
As for the rest of your comment – no different than the Presidents before him – right back to George Washington. There are certain perks that come with the job.
You cannot force your beliefs on your employees. Never buying anything from Hobby Lobby again, and if you work there you are a narrow minded simpleton.
You do realize one is not forced to work there. If birth control or fertility treatments were important to me, I would attempt to work at a company that provided that health benefit.
So they're the simple minded ones, yet you're the one who mocks 13,000 people you don't know simply for holding a job? Apparently you have to agree with your employer on every moral issue or you should quit your job?
Sorry, Ally, but that's not the way laws work. HobbyLobby isn't a religious organization. it doesn't get a pass on following the law.
Or did you miss that memo?
The irony is that even the Vatican has said that some type of birth control is OK. May be Hobby Lobby missed the memo.
I think you need some religious education. Unless you're Catholic, the Pope's opinion pretty much means nothing.
My question is, Why should the government have any say in the insurance offered by a PRIVATE company?
Hobby Lobby is not publicly owned, it is not listed on the NYSE. The government has no right to tell them how to run their company.
If an employee wants a service not covered under the policy provided by their employer, they are free to get it on their own.
@hazard: you are exactly right............................ how dare the government tell private businesses they can't have child labour. it's none of the governments business how they run their company if it's not trade on the open market right.
sweatshops government should do their job and protect the businesses rights to enslave their employees.
you are a true idiot.
Lat Hazard, the government set a minimum policy (consider minimum wage for example), BTW we have had a minimum health care policy for decades now. This is nothing new.
You mean like when the government imposes taxes on businesses, like it imposes taxes on individuals such as the requirement for individuals to get health insurance?
@hazar Right, because child labor is exactly the same as not providing birth control. The government should protect people's rights (i.e. child labor) not force employers to provide certain health benefits. Apparently our country didn't have good parents and now wants the government to step in that role and raise us.
It is really a question of whether a CEO of a company can impose their religious beliefs on their employees.
Remember that our Great Supreme Court Ruled that Corporations are People so that they could donate money to their politcal favorites! What a bunch of idiots. So with that ruling I don't see why a Corporation shouldn't be allowed to follow their beliefs. I the employees want birth controll they can pay for it.
Yesterday I wrote Hobby Lobby should just go ahead and pay the fine. I was wrong. I didn't realize it was $1.3-million/day.
I thought it was a one time payment per employee of $2,500. to opt out and let the employees go on the government healthcare program. Before this whole healthcare thing is done, it will have been easier for the government to just give each of the 30-million souls without coverage $1-million dollars and forget giving them insurance. Let them get their own. Far cheaper in the long run and one heck of alot less paperwork, fuss, and bother.
I love how everyone is saying "corporations can't marry, can't have faith", etc. But didn't they declare that corporations are people too...............soooooooo, if that's the case then they should be able to do what people do – have faith, get married, etc.....
I'm betting Apple gets a gay-marriage LOL!
Caesar Barackus wants his money....there are three things that Liberals love....Other Peoples Money, Dead Babies, and Forced Unionism.
**eagerly awaiting Liberal Response along the lines of "oh yea....well the three things Conservatives love are blah, blah, and blah". Go for it...you know you can't resist. You have no creativity, so now you'll just change a few words around. I'll be waiting!
IndianaGreg, stop watching Rush as a news source, it's warping your thinking. I am a very proud Liberal. I don't want any ones money (just what I earn from a hard days work. I also don't want to live in a country where only the rich has a voice and real options (health care, education and so forth). I am absolutely against abortions, but my beliefs should not effect your decisions as your decisions should not effect mine. The Unions are why we have a middle class, I admit they do go a little too far at times and we should reevaluate their influence but without them we would be all be working in sweat shops (all except the rich).
Great. Another dumfuck tea bagger dipshit.
You cannot be serious – I was a Republican until they started letting bat-sh** crazy religious whack jobs drive the agenda of the party. You cannot possibly believe that Liberals (which I'm happy to say I'm socially liberal and fiscally conservative) are baby killers?!? I have many conservative and many liberal friends – all highly educated – and NOT ONE view abortion as a form of contraception or in any way a good thing. It's about education, and if Hobby Lobby chose to spend that fine on educating its employees about proper contraception then the issue would be moot.
Hobby Lobby will revert to a Plan B, and they will still get their way. Reduce work hours of employees to prevent plan eligibility. Make minimal contributions to the plan. Buy into higher priced plans, so that the high cost forces people out of the plan, or prevents them from electing it. I mean, hey, my company did it to me. "Sure we offer benefits. $1500 per month for a family of three, and we don't blame you if you don't want to opt in to the plan". And, we don't provide any payroll credit if you opt out. So, I bought my own catastrophic plan for $400, and qualified to put my kids on State subsidized plans. We will all be running around with Catastrophic plans, and still pay dearly out of our pockets for well care and prescriptions. Oh well, we had the wife quit her job. Qualified us for more insurance programs on the state teet. Saves us daycare expenses, and we pay way less tax, now. The new work ethic. it just doesn't pay to bust butt anymore.
Truth – sorry for what happened but its the new normal. Imagine though that liberals LOVE that this has happened to you because you are now part of their master plan to remain dependent on them to live your life the way they think you should. Anytime government involves itself in YOUR DAILY LIFE it's designed to enslave you – both parties do it (so this is not just a rant on the liberal manifesto). I hope you find a better job and free yourself from government dependency that is designed to keep you voting a certain way
Don't worry, Phil. I will take their money and still vote the way they don't want me to. It really sucks to open up that Social Security statement, and look how much I have earned and paid taxes on since I was 15 years old and through my military years and into the private sector. So, I don't mind taking back. And, they can't EVER buy my vote.
The fact that everyone is attacking Hobby Lobby is ludicrous. The company was not, in the past, required to provide health insurance but they did. What they should do now is simply provide no insurance and tell their employees to use the government exchanges. Let's see how they like being told what to do by the goverment! The CEO of Hobby Lobby built the company and is within his rights to impose his beliefs on his company.
Actually, a company of that size is required to provide insurance to it's employees. They cannot just decide not to give them health insurance.
Spencer you are wrong. They can choose to pay the 2,000 a year fine for not providing insurance and let the employees get it on their own which THEY MUST DO or face fines themselves. Isn't this a FINE country being told what to do? LOL
I think I'm missing something, Hobby Lobby the company Can Not have any religious objections (it's a company not a person). The owners can but should their beliefs directly effect their employees health care choices?
"Our basic point is the government can't put a corporation in the position of choosing between its faith and following the law."
Patently ridiculous. As another poster pointed out, corporations do not have a faith, natural persons do. But even if you could say a corporation has a faith, then what if my company's "faith" stipulated that it had to sacrifice one employee to Zuul every year? Would laws against murder not apply, since it's a religious belief?
That's an absolutely insane example. The question is whether someone should be required to provide something that violates their religious conscience. To compare that to an employer trying to take someone's life is ridiculous. Could you not come up with something more outlandish?
In that scenario, I would be extremely wary of the "Employee of the Year" award...
As much as I don't like the whole religious objection thing, In many cases, contraceptives and the morning after pill are Lifestyle medications, much like ED drugs. Insurance companies generally don't cover ED drugs unless there is some other medical need for them. I fully understand that there are many cases where there is a medical need for the contraceptives other than birth control. Why can't the drugs be treated the same as if it was a drug for a man?
If their insurance doesn't provide BIRTH CONTROL (not 'abortion inducing medication') then their employees will pay for it out of pocket with money they EARNED FROM THE COMPANY.
So either way, Hobby Lobby STILL pays for it!
Get over yourselves controlling Xtians, this is America, you CANNOT control others!
How do you figure the employee paying for it out of pocket is the same as hobby lobby paying for it? One is a benefit and the other is an expense. They aren't paying the women employees extra in order to afford birth control.
Apparently ONLY our fearless government can do that, HUH FRED! How about YOU THINK before you post stupidity. OH, sorry your a lib. you dont have to or CANT!
"This is America, you can't control others."
Ironic that you're posting this in response to the government forcing companies to provide healthcare for others. Apparently, you can control others, and fine them 1.3 million per day if they don't agree.
Well, there are religions who do, (or not), believe in.: Porcine heart valves, immunizations, blood transfusions, eating meat, sparing the rod, handling snakes, gre gre bags, et al. These are a personal decision. The medical system in the U.S. should be universal coverage paid for under the federal government. Take the employers, and the insurance company, and the pharmacy distributers our of it. Each company who handles a case adds expense including their profits to the costs. Each one has a point of view on what is needed and who could get care. It is so profit driven, and we all pay extra for it. If the rich then can get better care by paying more let them, but everyone now has their hand out.
What about the employees' freedom of religion? There's a downside to the Obamacare provision that I haven't seen anybody mention yet – employers could find out which employees have filed claims for contraception services and fire them. Since these are mostly at-will jobs ("Christian" employers being some of the strongest opponents of any sort of job protection for rank-and-file workers), the employees won't have any recourse at all. I predict we'll start seeing a trend of women getting fired on pretexts like "policy violation" or "poor fit" after they've made insurance claims for contraception.
eh... I think we're missing the point here.... corporations do not have religions.... they aren't baptised, they don't get married and they don't have kids.
Right, they are NOT people!
They are reaping the govt. benefits of incorporation, then they must pay the price.
Last trip I'll take to Hobby Lobby.
The funny thing is all these religious people's kids are doing the deed and taking the pill behide their parents backs. Most plans cover birth control anyway.
"Our basic point is the government can't put a corporation in the position of choosing between its faith and following the law."
Except that 'a corporation' can't have faith. Individuals within it can, but by virtue of growing past a certain threshold, those individuals aren't allowed to affect the rights of other individuals working for the same corporation. Not all employees subscribe to the same morality as the founder.
ditto... you hit the nail on the head there!
I wonder how they'd feel if a Islamic owner of a company prevents their employees from bringing pork and eating it in their cafeteria, because it's against their religious believe. I'm sure they would be screaming up and down about how Islam is taking over our country.
I find it funny that "freedom of religion" to these people means forcing their faith down everyone else's mouth.
To be clear, I would see granting exemptions if the organization was expressly religious, like an actual church, but merely being guided by the religious principles of the founder simply doesn't justify preventing coverage to those within the organization with different beliefs, atti.tudes, and morals. We, as a nation, say "here are the rules corporations play by" and this chain can't take all the benefits of that on the one hand and then ignore or defy the parts the executives don't like on the other.
exactly. hopefully this case will lead to a Supreme Court decision that the "free exercise" clause of the first amendment doesn't apply to corporations. If we're lucky, that could be step one towards depriving corporations of their legal "personhood".