January 11th, 2013
03:40 PM ET

Hobby Lobby finds way around $1.3-million-a-day Obamacare hit - for now

By Eric Marrapodi, CNN Belief Blog Editor
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Washington (CNN) - By Friday, Hobby Lobby would have racked up $14.3 million in fines from the Internal Revenue Service for bucking Obamacare. But in keeping with the great American tax tradition, they may have found a loophole.

The company is facing $1.3 million a day in fines for each day it chooses not to comply with a piece of the Affordable Care Act that was set to trigger for them on January 1. The craft store chain announced in December that, because of religious objections, they would face the fines for not providing certain types of birth control through their company health insurance.

The penalty was set to go into effect on the day the company's new health care plan went into effect for the year.

Peter M. Dobelbower, general counsel for Hobby Lobby Stores, Inc. said in a statement released through the Becket Fund that, "Hobby Lobby discovered a way to shift the plan year for its employee health insurance, thus postponing the effective date of the mandate for several months."

The statement continued that "Hobby Lobby does not provide coverage for abortion-inducing drugs in its health care plan. Hobby Lobby will continue to vigorously defend its religious liberty and oppose the mandate and any penalties."

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Last month Supreme Court Justice Sonia Sotomayor rejected the company's appeal for a temporary relief from the steep fines while their case made its way through the lower courts.

Hobby Lobby announced a day after the ruling 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.

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, dubbed Obamacare, 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."

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.

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

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.

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The Oklahoma City-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. It is still privately held 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.

MORE BACKGROUND: Hobby Lobby faces millions in fines for bucking Obamacare

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.

Part of the reason Sotomayor rejected their appeal to the Supreme Court she wrote was because their case is still pending in the 10th Circuit Court of Appeals in Denver.

A spokesperson for the Becket Fund said on Friday a date has yet to be set for the case to be heard in the 10th Circuit.

- CNN Belief Blog Co-Editor

Filed under: Belief • Church and state • Courts

soundoff (4,609 Responses)
  1. Joe

    I'm just glad that one family has enough on thanksgiving to walk away from $1.3M/day while others starve. Go god!

    November 28, 2013 at 12:17 pm |
    • Mama Gov

      It's a rock and hard place really, a smaller enemy (hobby lobby) stomping on the masses is still preferable to a nearly omnipotent one.

      February 2, 2014 at 2:07 pm |
  2. ollie oiseauk

    Yes, this is ridiculous and atrocious. However, we have no one to blame but ourselves. If we'd fight this inappropriate mix of "church and state" this kind of bologna wouldn't be happening. We the people have power, more than we know in numbers. So, if we don't like what's becoming the status quo it's time to act; fax state & congressional reps, get involved in government, etc. We need to become a part of the solution to make the change we want to see in our states and in this country.

    November 27, 2013 at 9:35 pm |
  3. Bill

    What a disgrace.
    All Americans should boycott this selfish, money grubbing company...

    November 27, 2013 at 12:34 pm |
    • Mama Gov

      A victory for big brother won't help you I the long run. It's too late for that now but remember your thoughts on the subject when you are crying in the soup line.

      February 2, 2014 at 2:06 pm |
  4. samb1

    What about women who need contraceptives for medical reasons(20%) such as ovarian cysts? Are they also to be discriminated against because of your wacko religious dogma?

    November 26, 2013 at 2:44 pm |
    • Mike

      They probably won't look at it that way. Religious dogma will haunt us all. Many versions of Christianity strictly prohibit alcohol or intoxication. Why aren't they trying to get away with NOT paying for alcohol related illnesses? Why not also ban prenatal care for unmarried women? Those questions don't get brought up because even Hobby Lobby knows that the world would laugh at them if they used that as a defense from the ACA. Abortion and birth control, however, are always a good scapegoat. I really think it just comes down to the fact that Hobby Lobby just doesn't want to give it's employees affordable health care and will use religion as a shield. It's business as usual, but this way they can sound holy.

      November 27, 2013 at 1:02 am |
      • Quinn

        I am thankful there are good Christian people running Hobby Lobby who don't approve of the murder of children!

        February 2, 2014 at 1:34 pm |
        • Quinn's guardian angel

          It ain't murder of children. Do you support gun control hillbilly.

          February 2, 2014 at 1:57 pm |
    • jakirk

      Please...get over yourself. There is nothing that prevents the woman from going and buying their own contraception. All this lawsuit attempts to do is allow Hobby Lobby to not have to pay for services (or drugs) that go against their religious beliefs. They have no problem paying for IUD's and other contraceptions, but their main objection is for drugs such as the morning pill.
      Before you make stupid comments, do some research first!

      November 27, 2013 at 5:46 pm |
    • cyndi kelly

      This is about the use of an abortion pill. Not contraception. I am a Christian woman and a medical professional. Enough said.

      February 1, 2014 at 11:45 am |
  5. wayne dehart

    Liberals have now converted America to a form of government in which;

    1). If you exist, you must pay.
    2). If you are health, you must pay for others existing.
    3). ALL citizens must file their medical PAPERS BITTE with the government.

    When a government can FORCE its citizenry to purchase a commercial product, you have crossed the rubicon of 'For the People', to 'FORCE THE PEOPLE'.


    November 26, 2013 at 2:02 pm |
    • samb1

      Do you mean like auto insurance?

      November 26, 2013 at 2:46 pm |
      • Countergod

        You are not required to hold auto insurance for yourself. You are required to hold auto insurance in case you crash into/kill someone else. You may choose whether or not you cover your own car, but if you injure someone else, you're required to pay and thus require insurance to ensure you have the means to pay. This does not violate the right to choose whether you are insured.

        November 26, 2013 at 3:06 pm |
        • In Santa we trust

          The difference is you can decide if you want to drive – you have no control over whether you get sick, have an accident, have complications from a procedure or from childbirth, or even get shot-up in a mall. There is no person alive in the West who has never had medical care or attention.

          November 28, 2013 at 12:33 pm |
  6. Snobby Lobby

    "Amen" to Hobby Lobby's cling to archaic hypocrisy costing them BILLIONS. 🙂 I hope the company is bought out.

    November 26, 2013 at 12:48 pm |
    • wayne dehart

      And if they are forced to close down, all those employees will be on unemployment.

      I LOVE liberals! They are such great problem solvers.

      November 26, 2013 at 1:57 pm |
      • samb1

        If Hobby Lobby is forced into bankruptcy, I will accept that as proof there is a God!

        November 26, 2013 at 2:48 pm |
  7. aCriticalEye

    These christian extremeists make me sick. If YOU personally object to birth control, then dont use it. However, over 90% of women use it.

    November 26, 2013 at 6:24 am |
    • me

      too bad your mother didn't...

      November 26, 2013 at 8:31 am |
      • HotAirAce

        Too bad your mother wasn't completely successful, which puts her in a special class as believer Moms-to-be account for 70+% of the abortions performed each year in the USA.

        November 26, 2013 at 8:47 am |
      • mike

        Haaaaa! Good one!

        November 26, 2013 at 2:23 pm |
    • rick

      Extremist? They are only expressing their right to freedom and religion. Just like you. Why not just add the word "optional".

      November 26, 2013 at 9:42 am |
    • wayne dehart

      How DARE those conservatives disagree with liberals?

      Oh the HUMANITY!

      November 26, 2013 at 1:59 pm |
    • mike

      "Extremists?" Soooo YOU are the gauge of calling "what" is considered "extreme?" Go back under your ROCK from whence you came....

      November 26, 2013 at 2:30 pm |
    • cyndi kelly

      This war is not about contraception. It is about the abortion pill. I am a medical professional. Be sure to read up on facts before you post.

      February 1, 2014 at 11:42 am |
  8. ovei

    great blog. i really love to visit this blog..

    Temp agency in oklahoma city

    November 25, 2013 at 5:12 am |
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About this blog

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.