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.
I'm sure Quakers don't appreciate their tax dollars going to the current wars and Jehovah's Witnesses don't like the idea that they may be helping pay for blood transfusions. Making specific exemptions for specific religions is fun at first, but at the end of the day, just cough over the dues for a (somewhat) healthy and (somewhat) civil society like the rest of us.
One thing I notice, people are confusing the terms "abortion" and "contraception". The distinction is very clear, contraception is prevention, abortion is murder of a living child. It is the latter that Hobby Lobby is objecting to.
Birth control: also known as contraception and fertility control, refers to methods or devices used to prevent pregnancy
Abortion is the termination of pregnancy by the removal or expulsion from the uterus of a human child prior to viability
And the morning after pill is categorized as an Emergency Contraceptive. It's not an abortion, so your point fails.
No. They're objecting to contraceptives on the grounds that *they*, in their oh-so-medically-informed-opinions, think they equate to abortion.
Read it again. It's only the second sentence of the article.
right, thanks for illustrating my point perfectly. You don't understand the difference between prevention and termination (murder).
the second sentence "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.
now, follow this.
The "morning after pill" operates the morning after, that's how it got its name.
"after" refers to after the act of conceiving the child (fertilized egg).
"after' is the opposite of "before". that's important to understand.
contraceptives prevent conception
abortion (morning after pill), destroy a newly conceived being.
Sorry chad but a woman isn't considered pregnant under after the egg has embedded itself in the uterus, and as the morning after pill stops the process from occurring it is not terminating a pregnancy.
Apparently Chad now wants to redefine what constitutes a contraceptive. Talk about pathetically desperate.
No ones religious freedoms or belief are being imposed on, the company leaders who don't want to make use of contraceptives aren't being forced to use them.
I agree. If your faith prevents you from using contraceptives, then don't, but not providing it equates to forcing your religion on someone else by preventing them their right to choose. Religious freedom for ALL, not just those that share your religion.
I don't really agree with abortion, having said that, no corporation should be allowed to impose their religious views on the poeple. If someone they employ wnts to have an abortion, it is that persons choice, not the choice of the corporation. And, let's face it, without employee health plans covering that procedure, the wages they make slaving at the store wont cover the cost. I hope they nail Hobby Lobby to the wall, follow the law. Your employees are not slaves who's lives you can dicatate based on your choices and views, and the people cheifly responsible for your carrying out 1.2 billion in sales should enjoy the same freedom as the people with the ownership that had decided adversely.
No one is trying to force their believes on anyone, people working for Hobby Lobby are still free to get abortions. However, Hobby Lobby shouldn't be forced to have pay for insurance that facilitates abortions. You want one pay for it yourself, or here is a clue prevent it. Birth control pills and the morning after pill should be OTC.
If we simply sterilized everyone (reversible of course), there would be no problems like this, especially if we also banned people from having children or being around children until they've passed some sort of minimum requirements.
It would work, but too many would scream about it because they are stupid. They should probably be the first ones to be sterilized, imho.
Too bad they are not big Obama supporters. If they were they would qualify for one of the hundreds of exemptions that the pro-Obama companies and the unions receive. After all, some are more equal than others....
Really, name the exemptions and those who are receiving them or is this just more false or misleading rhetoric from the right?
The corporate CEO has no right to force his religious beliefs onto his employees. Ultimately the choice of utilizing services in the health care field is the choice of the individual who it affects. If their religion has no issues with contraceotion they have every right to utilize those services. If their religion is against those services they have the CHOICE to use or not use. The CEO's and board do not violate their faith just because an employee chooses to follow their own beliefs and utilize a service. The only time those individuals would violate their faith is if they themselves make the choice to utilize those services themselves, or f or their family.
contraception does not cost that much. should not even be forced on insurance
Mark: stated like a man who has never had to pay for critical oral contraceptives that go beyond preventing pregnancy, they have other, life saving benefits.
Yep, retphxfire, poor women who can't get birth control for free because some narrow few use it for some other reason.
When insulin, without which I'll be dead in a month or two, is covered free of charge to me, I'll stop caring that women don't get what they want free.
Hobby Lobby is one of the most expensive stores.. I think they can afford it, they just don't want it , too bad I can't afford anything in their store, that I want.
No more 40% off coupons. How soon before they object to another prescription like heart meds or cancer meds because they are too expensive. Get real, it's just a prescription and none of their business who takes it.
Did you read the article, it's not because of expense but because of their believe. BC should be OTC period!!!!
"honoring the Lord in a manner consistent with biblical principles" It does not say anything about abortion. This is all made up by religious fanatics trying to over-turn a woman's right to choose.
people have the right to believe what they want in the USA. but you are a liberal so you are against that.
Who said I was liberal? We can believe all we want but it should not hurt others.
No one is trying to stop us from choosing, Hobby Lobby just doesn't wanna pay for it, nothing wrong with that.
Why should the beliefs of a few determine the benefits and coverage their employees get? Sorry you don't agree with contraception. Let me guess...you are also against welfare, food stamps and abortion as well? Well, pick a side, because you can't have your cake and eat it too. That's without mentioning...birth control pills aren't just for contraception. There are many women that take them to control pre-cancerous growths in their uterus, among other uses.
Socialists are such bullies. Did they learn their demobocracy from Sodom and Gomorrah?
they learned it from right wing nazi's
if i was the owner i would just close all the stores and put all the people on unemployment. or just stop all health care benefits. the workers can thank obama.
No. They'd thank you. And they'd be right.
Yes, that would make perfect financial sense for them. See... they have these things called leases and other financial commitments. but obviously you are a business genius. So, what company are you the head of? Apple, Microsoft?
Actually, they can thank the owner of the store that decides not to obey the law, rather than push his religious views on his employees illegally.
Mark, your extremist views are showing, also the fact you are a poor loser. Millions can thank President Obama for their lives being saved now that they will be receiving medical insurance and care. People like you usually have insurance and never had to face the devastating fact a loved one will die, even though there is medicine or care that could save them, just because they don't have insurance or their child is born with a preventable birth defect because they couldn't afford pre-natal care or had to choose between eating/shelter or medical care/prescriptions...the self-centered extreme right.
What the owner should do is drop everyone down to part-time and not have to pay for health insurance at all.
Not exactly sure why so many people think all these companies will drop healthcare and pay fines because it is cheaper. I mean they are providing healthcare now and they are not legally required to. So makes people, idiotic people, think they will all of a sudden drop healthcare?
Thus continues the era of absurd, unnecessary regulations. All together now: "All hail the nanny state!"
Really, so giving individuals free choice in there services to follow according to whatever faith they hold is the state being a nanny? Sounds more like they are giving them freedom to choose their own utilization of services and choice as to following their own beliefs.
Sad day for American when the details of an insurance policy are supposed to trump freedom of religion.
Worse still when some Americans actually support that arrangement.
It's called the separation of church and state. Some dude named Thomas Jefferson was known for putting that in there. You might want to look into it.
What church does Hobby Lobby attend? Is there a pew just for it, or do they hold services in the building to make it easier for it to be there? How long did it take to baptize? Do you think they just poured the River Jordan over its roof, or ...?
But the CEO and owners of Hobby Lobby are free to trample the freedom of religion of their employees because the believe differently?
Sorry it forcing your religion on others is just as much a violation. By the same token please let me know how the choice of another individual influences your own religion? If you CHOOSE to violate your religion that is your poragative. If another CHOOSES to follow their own beliefs that has nothing to do with your religion or belief.
jeepguy6//"It's called the separation of church and state. Some dude named Thomas Jefferson was known for putting that in there. You might want to look into it."
Yup, so you agree then. The gov't shouldn't be telling people they can't follow their religious tenets. The so-called Sep of Church and State works BOTH ways.
SCOTUS ruled the BSOA were a religious group when atheists pitched a fit. Same rules apply to HL.
Er...why do you think the religion of the few people at the top of the company trumps those of the thousands of employees?
The government isn't telling anyone not to follow religious tenats. The individual has every ability to make the decision not to use the service and tereby meeting their religious convictions.
You cannot force that belief onto others who do not share that religion or belief.
Nope G_Edwards, you just don't get it. Separation of Church and State means they cannot opt out of a federal regulation because they feel it goes against their religion. The government requires these types of things because in the long run it will save people money. But I am sure you don't have the brain capacity to understand that.
Hobby Lobby is *not* a person. It has no religious beliefs. Hence, those beliefs cannot be violated.
Let's just let all employers dictate what will and will not be covered in insurance policies according to the employers religious belief. That way a Jahovahs Witness owner would not have to cover blood tranfusions. Seems like a good solution.
HL is privately owned. It's not a public company.
It's no different than you hiring a maid and being told that you have to help her to do something religious on your dime and time that you oppose.
jeepguy6//"Nope G_Edwards, you just don't get it. Separation of Church and State means they cannot opt out of a federal regulation because they feel it goes against their religion."
You have a gross misunderstanding of the law. Why do you think religious organizations can be tax exempt???? Because the can opt out of the federal tax regulations if they meet certain criteria for religion.
Both ways. Gov't can't tell someone how to practice their religion, and gov't can't tell someone to practice a religion.
G_Edwards needs to actually read the Constltution and realize that religion has no legal standing in view of this nation's laws.
Only the people who follow a religion can have legal standing.
The religion itself has no legal standing, no legal representation, and is only a delusional belief system without any credibility at all. (believers have no credibility either for that matter)
If my religion says that I must shoot a school full of kids, why can't I freely express that part of my religion?
Well, it's because no religious value, rule, law, tenet, or bit of dogma EVER trumps this nation's laws and we all agree on that, otherwise you might as well make the sleazy pope President and let the Ayatollah Khomeni be Vice President and we will live under religious sharia law with death for anyone who speaks blasphemy or who "dishonors" any religious figure whether real or not.
Is that where you'd like to go with this? Because that's where you're headed with your pathetic, fucked up "logic" and clearly worthless "legal knowledge."
"because no religious value, rule, law, tenet, or bit of dogma EVER trumps this nation's laws"
BS. Easiest example? Christian denominations allowing those under 21 to partake in Communion, where they drink wine.
Why is that allowed, despite laws against under age drinking? The 1st Amendment.
the way i see it, hobby can just put everyone on a part time status, and not provide insurance. very simple. And would therefore create more jobs for others.
Oh, yeah, great idea. Now no one employed would have any kind of insurance for medical emergencies.
Then their employees can pay thousands of dollars for health emergencies. Of course since they are part-time they do not have the money to pay the hospital bills.
Lol..more jobs. Who cares how many jobs you have if they are all part time and pay minimum wage with no benefits? You want people off of welfare? Yeah, well that ain't going to cut it. Better to just go on welfare than make $150 a week with no benefits, which won't even put food on the table, much less housing.
they can go to the state fronted medical clearing house and pay for it, with a stipen from the company
Worked for WalMart, didn't it? Because what we really need is another few dozen thousand people on Medicaid.
People would just leave the company. see, companies do not provide insurances because they want to be nice. They provide insurances and other benefits as incentives to keep good employees. So take away peoples benefits and people will leave a company in droves. And if you know ANYTHING about business you know it takes a LONG time to recoup the money spent on training new employees. So go ahead and make everyone part time and Hobby Lobby will be out of business in NO time.
Fighting on the side of Morality is superficial if all you want is a child born but not educated, fed, or sheltered. This is not Pro Life but Pro Birth. What have anti abortion advocates done for the living? We need freedom from religion...Health care and Jobs go hand in hand. Sick people may not be productive enough to keep their job. Politics and Religion cause harm in the name of Morality.
they should close up shop and retire. Let the employess draw welfare.
Let the War begin...
Drop healthcare as a benefit and problem goes away. What most corporations will be doing in 2014. Paying fines less than cost of healthcare.
Oh really? So a sick America will mirror the economy and infrastructure?
Many American corps and companies do not pay healthcare now. Now they only have part-time employees so they do not have to pay for care. It is the big bucks they want and damn the workers.
Best to just go to single payer and scrap our current system. Linking healthcare to employment was one of the worst mistakes we've made as a country.
Totally agree, Saboth