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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. Catholic

    Anyone who thinks "the pill" and many other forms of birth control NEVER function as abortifacients has never read the fine print. Ask your doctors. If anyone says otherwise they are lying to you and that includes Planned Parenthood. All you bigots go back to school and get educated before you even start shooting off your mouths and showing how out of touch with science you really are.

    December 29, 2012 at 6:31 pm |
    • Tom, Tom, the Piper's Son

      You are getting YOUR info from anti-choice sites and you're dumb enough to believe it. These pills do not kill fertilized eggs. They do not cause abortion. And furthermore, you're free not to take them if you're so moronic that you believe such crap. What you are NOT free to do is to prevent others from using them if they choose. And neither are the owners of Hobby Lobby. They are also not free to flout the law.

      Go soak your head in the holy water.

      December 29, 2012 at 6:34 pm |
  2. Run4DaHills

    I always feel like I need to hose off with Purel hand sanitizer after walking through a Hobby Lobby. Any of their stores I've ever seen were in near-dead shopping plazas/strip malls. Very, very 80's and "has-been" sort of shopping experience. Hobby Lobby is very unevolved and in drastic need of a retail facelift. I think I read somewhere they don't even have UPC code scanners at the registers? Hey Hobby Lobby, it's 2012, ok?

    December 29, 2012 at 5:53 pm |
  3. Run4DaHills

    I"m a man and don't want children or a wife. I believe money that for my insurance shouldn't go to pay for women having babies, maternity leave or breast care. I believe my money should go to abortions and pregnancy termination pills. So, if I start a craft store, I should expect all my employees to worship my garden gnome and too bad for all the prego women who want free time off to squirt out a runt when all they gotta do is swallow a pill and show up on time for work the day after.
    So, maybe Hobby Lobby should be allowed to refuse on certain parts of insurance. After all, it mostly just concerns womens' rights and health – and all the world's good theocracies have never really elevated women to the same status of men, anyway. Hobby Lobby is just trying to do their part to restore the old order of the men on top – and women 10 paces behind -and silent (as it should be, right?)
    On January 5th, protest Hobby Slobby's out-dated stance on a woman's right to decide their health care options.
    Instead, shop MICHAEL's & JoAnne stores for all your craft and hobby needs.

    December 29, 2012 at 5:43 pm |
  4. Atheism is not healthy for children and other living things

    I am baaaaaaccccccck, daFrank

    December 29, 2012 at 5:39 pm |
  5. Theo

    I stoped shopping at hobby lobby when I found out they where bible thumpers

    December 29, 2012 at 5:25 pm |
    • david deLiar

      More like bible humpers. They screw their own supposed principles

      December 29, 2012 at 5:31 pm |
  6. bob

    "saying some contraceptive products, like the morning after pill, equate to abortion."

    maybe they should read about it, its nothing more then a preventative measure, not abortion

    Religious people swim in ignorance.

    December 29, 2012 at 5:24 pm |
    • Bill Deacon

      Dr. Horacio Croxatto, professor at the Chilean Instiitute of Reproductive Medicine, said in 2006 that the morning-after pill “is not abortifacient because it only prevents pregnancy by stopping ovulation.”

      Nevertheless, the most recent study (2007) by Doctors Mikolajczyk and Stanford of the Department of Medicine in Public Health of the University of Bielefeld (Germany) clearly indicates that the pill’s “real effect” includes mechanisms that prevent implantation.

      Published by the magazine Fertility and Sterility, the study used data from multiple clinical studies with advanced mathematical models and concluded that if emergency contraception only inhibited ovulation its true effectiveness would only be in a range of 8-49 percent. If it acted before ovulation and if it inhibited ovulation completely, its true effectiveness would be between 16-90 percent. The rest of the pill’s effectiveness consists in its anti-implantation mechanisms, which cause an abortion.

      December 31, 2012 at 12:18 pm |
  7. Britney Smith

    I work for this company, they dont care about their employees!!! All they care about is getting their work done. They are hypocrits who show favoritism to the employees who dont have a backbone to stand up to them. He claims his employees dont work on Sundays, but his warehouse workers are. They worked 7 straight days before Christmas. So this lawsuit doesnt surprise me at all. It really sucks that David Green didnt think about his 13,000 employees and how this could effect how they provide for their families. Its all politics. He is just greedy and wants more money. SHAME ON HOBBY LOBBY

    December 29, 2012 at 5:05 pm |
    • Urban Sidhe

      I have heard about the terrible way they treat their employees from several employees. I once decided to shrug off the warning and go apply any way. The lady (cashier) I asked for an application looked around pulled me close and asked quietly "Do you REALLY need a job?" I said no, to which she replied "Then do yourself a favor and go apply somewhere else."

      I have all but stopped shopping there...

      December 29, 2012 at 7:04 pm |
  8. Run4DaHills

    January 5th – Shop Michaels's & JoAnne stores for craft supplies instead of supporting Hobby Lobby's call to support them in their decision to infuse management's religious beliefs into a corporate environment and upon a diverse set of employees, as if those employees were all like-minded members of the same religious faith. Hobby Lobby is not a church. There should be no exemptions, merely because the owners have chosen to hold one set of personal beliefs over all their employees' personal beliefs and their right to work and receive benefits from Hobby Lobby.

    December 29, 2012 at 5:03 pm |
  9. George

    It will always amaze me that when the Liberal side wants something struck down, or changes that goes against THEIR BELIEFS or WANTS ...immediately they cry "ITS MY RIGHT"...whether it is a choice of lifestyle, doing "medical" marijuana (?), women's lib issues, etc., etc. But, when the Conservative Christian or Christian group says, "THIS IS MY RIGHT"...the Liberal side cries even louder, "YOU HAVE NO RIGHTS, YOU MUST DO AS WE DO AND THINK!" ... So, if the Liberal side wants to have those RIGHTS, I say have at it; for the same token, when a Conservative Christian or Christian group wants to have their RIGHTS, then shut-up ... thus, the shut-up issue goes both ways. See, God says that anything having to do with an abortive process is against His Will ... now granted, Liberals and Conservatives have very different opinions about God, or His Will for that matter; but in the end, God's Will, will be done ... the only questions is, on what side of His Will, will YOU be on? God says a "woman's body" is not her own, but her husband's, and vise-versa; so be careful what you decide you have a RIGHT to do, because you will answer eventually for it ... today, tommorrow, or in the future ... time is on God's side, not yours.

    December 29, 2012 at 4:41 pm |
    • Belinda

      Read again. The Holy Bible does not say that a woman's body belongs to her husband.

      December 29, 2012 at 5:46 pm |
    • Argle Bargle

      You live in the United States, you follow the laws of the United States. If you want to have free reign to practice your beliefs and legislate them into lawm move to a Theocratic country. You're American; you're free to go.Good luck.
      Hobby Lobby is trying to circ umvent the law, and they are not a religion, they are a retail business. They are pursing this the proper way: through a court of law. If their Conservative beliefs are lawful, they will win. But again, as they are not a church OR a religious non-profit organization, they really don't have a leg to stand on.
      I wonder why Conservatives don't GET this.

      December 29, 2012 at 5:49 pm |
    • Argle Bargle

      Not to mention that this whole case has nothing to do with abortion, and you cannot legislate your belief into law, not matter how you and your ilk try. Roev. Wade made abortion legal. Get over it. If you don't want an abortion, GEORGE, don't get one. Don't worry about everyone else's salvation. Worry about your own.

      December 29, 2012 at 5:53 pm |
    • Tom, Tom, the Piper's Son

      Every time you post, George, you look more like a dinosaur.

      December 29, 2012 at 5:55 pm |
  10. david defrank

    akira you said it right as we no we are not complient with danny false acussation or with the act.did you no us catholics have closed a few adoption agency because of wierdo in washington and people who run cnn they could not afford the fines.we may and will close all catholic hospitals to.get over it the law sucks..

    December 29, 2012 at 3:38 pm |
    • Akira

      The problem, david defrank, is that the morning after pill isn't an abortion-inducing drug.
      It is a contraceptive.
      If that hospital, whether it's a Catholic one or not, makes a profit, it isn't a religious non-profit organization.
      I begin to see what it is you are really protesting: contraceptives.
      Unfortunately, HL doesn't stand a chance of winning, as it is a retail business that is profit-driven.
      They don't have a specific religious affiliation, either.
      They are free to practice whatever beliefs they hold dear; they just cannot pick and choose what LAW they follow, based on their religious beliefs, in a business that makes profits.

      December 29, 2012 at 3:49 pm |
  11. Bob

    Insurance is part of employees' compensation. So are the employees' paychecks. Is Hobby Lobby opposed to employees' using their paychecks (which is Hobby Lobby's "money" in the exact same way their employee insurance contributions are) for birth control? What about the portion of the insurance that the employees are contributing? Hobby Lobby-please stop using religion to play politics. Christians in name only if you ask me.

    December 29, 2012 at 3:19 pm |
  12. Cindi

    So they won't use birth control? Humm how many children do they have? Yea..thought so..they use birth control..
    They do not have the right to tell someone they can not get birth control through their insurance. They are not a religious organization. They are a for-profit business.

    December 29, 2012 at 3:02 pm |
  13. Tedd

    I think what Hobby Lobby, like many other Christian organizations, is going to do is: not cover the items they believe to be intrinsically evil; and 2. NOT pay the fine. That is the only course of action that is really possible and still stay true to Christ and conscience. THEN we'll see what Obama and Queen Kate do in response.

    December 29, 2012 at 2:58 pm |
    • Sane Person

      Actually, Obama would not have to do anything. He is the President of the United States. They don't generally get personally involved in law enforcement. The law would be enforced by the IRS who would simply take the money or eventually shut the business down if needed. I have no idea who Queen Kate is, we dont have a monarchy.

      December 29, 2012 at 3:13 pm |
    • JWT

      If they do that the solution is very simple – seize the business and sell it to pay the fines and/or taxes owing.

      December 29, 2012 at 4:18 pm |
    • Saraswati

      queen Kate? What the heck are you smoking?

      December 29, 2012 at 4:23 pm |
  14. david defrank

    the editor danny boy mislead you .hobby lobby did not state or equate morning after pill with abortiion.you see that makes them look bad.

    December 29, 2012 at 2:46 pm |
    • Akira

      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.

      So tell me, what0 are they protesting then, david defrank?

      December 29, 2012 at 3:23 pm |
  15. david defrank

    i like Atheism is not healthy for children and other living things. Stalk me sometimes

    December 29, 2012 at 2:04 pm |
  16. david defrank

    --–o---- thats a great idea fortune cooki e with christian thoughts your smart and witty .i would market that cookie but how did i get a huge raise to cookie seller

    December 29, 2012 at 2:04 pm |
  17. david defrank

    saneperson hobby lobby should not stop trade there in cuba africa where abortion is free or any where there can be open dialoge but i see your point.maybe you should go through your clothes throw them away with your lots of furniture lay off poor hooby looby

    December 29, 2012 at 1:48 pm |
    • Sane Person

      I'm not the hypocrite claiming religious persecution. So, I dont think I'll be tossing my clothes. They are not prinicipled. They are greedy. They willingly pay for goods from non christian chinese folks who get birth control. They just are not willing to pay thier employees here decent wages or standard healthcare.

      December 29, 2012 at 1:53 pm |
  18. sokesky

    Hobby Lobby can't expect to control their employees pay after they've received it, just like they can't control the healthcare their employees receive once the premiums are paid for (and I'd guess the employees actually pay at least part of their premiums). I for one do not want my employer to say what MY healthcare, which is MY benefit (along with my pay) can and cannot cover.

    December 29, 2012 at 1:47 pm |
    • Saraswati

      The problem is that they see this as their money, not money earned by the employee which has to be spent as a group to guarantee coverage...which is what this really is.

      December 29, 2012 at 4:30 pm |
  19. david defrank

    athest no good let me correct last statement are you o. if not im sorry for the nonesense

    December 29, 2012 at 1:40 pm |
  20. Sane Person

    So, we can expect Hobby Lobby to stop retailing items made in China, where they have a 1 child policy and women receive free contraception. Right?

    December 29, 2012 at 1:40 pm |
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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.