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. Julie

    As a mother of 3 children, including one teenage daughter, I refuse to shop at Hobby Lobby because of their stances on women and girls. We are human. We pay for health insurance. Don't deny us healthcare just because you think women are less than human.

    I hope other women, mothers, fathers, educators, counselors join and protest Hobby Lobby.

    January 12, 2013 at 8:22 pm |
    • Kayla

      You're an idiot. They do provide healthcare. They just don't agree that they should be required to provide abortion coverage as it doesn't adhere to their religious beliefs. There is nothing in their stance about thinking woman less than human. I don't even agree with Hobby Lobby and I think you're acting a fool. Grow up and stop overreacting.

      January 12, 2013 at 8:26 pm |
    • Harry

      Of course you are free to shop or not shop at Hobby Lobby, but if your sole criteria is not providing free contraception for it's employees I can only wonder how many of it's employees have heart conditions that require expensive medications that have co-pays, same for diabetes and other life threatening conditions. It cost me almost $2000 in co-pays each year for medication needed to keep my wife and I alive. I am fortunate that I have decent insurance and fairly low co-pays. But it boggles my mind that you are complaining about not getting something for free.

      January 12, 2013 at 8:36 pm |
    • Sebastian

      Hobby Lobby pays 80% more than minimum wage. How much condom cost, go buy your own,

      January 12, 2013 at 8:38 pm |
    • Tom, Tom, the Piper's Son

      The idiot here is you, Kayla. This is NOT about covering the cost of an abortion drug. It's a contraceptive, Educate yourself on the difference. It's beyond shameful that ignoramuses like you continue to promulgate your idiocy.

      January 12, 2013 at 9:23 pm |
  2. omg123

    I am so disappointed in Hobby Lobby....I love this store....but they now rank with Chick Fil A...another company trying to pawn their religious beliefs on the public and their employees. his company (based on what I see in the store) mainly employees women. I wonder how they feel about someone deciding for them if they want birth control? I bet if this was an issue about Viagra being paid for, this would be a non issue for the owner of Hobby Lobby.

    I will not shop their again. Michaels now has my business!

    January 12, 2013 at 8:21 pm |
    • Joe

      Wow you've been brain washed and just proved how ignorant you are by your comment. How is this like chick fil a? Lol

      January 12, 2013 at 8:23 pm |
    • manderkinz

      I'll have to agree. I don't think it can be called a "boycott" but I will not be spending my money at Hobby Lobby.

      January 12, 2013 at 8:25 pm |
    • Moby Schtick

      What a fvcking dovchebag, you are, Joe. A company has to follow the laws set forth by the congress. PEOPLE have religious freedom, but COMPANIES must follow the law regardless of the religous beliefs of a person or two who work there. Duh. Sounds like you're the one with the fvcked up brain matter.

      January 12, 2013 at 8:27 pm |
    • Jeff

      The government is over stepping itself in this case. Why should companies pay for birth control? That is a personal responsibility. Couple that with the the fact that it is direct affront with many people's religious beliefs and it shows real lack of thought on the art of the government.

      January 12, 2013 at 8:30 pm |
    • baxter2136

      I agree with the previous commenter. Also, if the employee fundamentally believes in abortion, it is not owed to them by their employer to cover the expenses of the procedure; although the current administration would have you believe that personal responsibility is an antiquated outdated idea. People ought to conduct themselves in a way that is sustainable on their own dime, and not depend on an employer to exterminate another human life. If they don't agree with it, then the person ought to take ownership of their own decisions and body and either get a new job or pay for it themselves. Otherwise, we are living in a world where there are no-consequences for your actions.

      January 12, 2013 at 8:40 pm |
  3. nachoknights

    feeling god in the lobby...

    January 12, 2013 at 8:21 pm |
  4. blf83

    HobbyLOBBY long ago lost my business. I saw how they treated customers with returns of items that didn't work, heard their religious bias within the store, heard their dismal religious music played constantly, and learned that their policy of recompensing their vendors is even worse than Walmart. They may have their "religious" values, but I will not shop in their stores until they obey the laws of the land – including the Affordable Health Care Act.

    January 12, 2013 at 8:21 pm |
  5. Uncommonsense

    Separate out health insurance coverage from employment and we won't have these ridiculous conflicts which distract us from truly making quality healthcare coverage available to everyone.

    January 12, 2013 at 8:21 pm |
  6. doofus

    If it were a Muslim organization forcing it's belief system on Christian workers, you all would have your panties in a bunch. But since it's a Christian organization, you could care less. So much for freedom of religion and freedom to choose what we want for our own lives. Glad you all think a for profit business has the right to dictate that kind of thing to it's staff.

    January 12, 2013 at 8:21 pm |
    • Josh

      Absolutely. If a company run by Muslins said it would not allow women into its stores unless they are properly covered from head to foot, there would be a body count from all the "good Christians" who would see it as an excuse to kill Muslims.

      January 12, 2013 at 8:25 pm |
  7. P Liddy

    Can we assume that Chic Fil A is in the same boat?

    January 12, 2013 at 8:20 pm |
    • doofus

      naw... we'd totally hear about that.

      January 12, 2013 at 8:21 pm |
    • Josh

      I'm guessing there are very few employes who get health insurance paid for by Chic-fil-A. Most of these "good Christian companies" keep pay low and benefits minimal. And companies like Hobby Lobby get most of their merchandise from third-world sweat shops with horrible working conditions and child labor. Truly Christian...

      January 12, 2013 at 8:23 pm |
    • Jeff

      Josh, I assume you purchase very little sense almost everything is made in 3rd world sweat shops.

      January 12, 2013 at 8:32 pm |
  8. pbernasc

    I thought there was religion freedom in this country ... so since when can an employer impose its religious belief to its employees?

    January 12, 2013 at 8:20 pm |
  9. Doug from Seattle

    The business have the right to believe in whatever they want. But they do not have the right to impose their moral beliefs on their employees!!!

    January 12, 2013 at 8:19 pm |
    • msdeb

      free country if you don't like their beliefs work somewhere else case solved!

      January 12, 2013 at 8:27 pm |
    • Frank Miller

      So, what caliber handgun does Hobby Lobby have to a person's head to force them to work there? If you don't like the way a company is run or the benefits they provide, go work somewhere else.

      Liberals and their entiltlement mentality.

      January 12, 2013 at 8:28 pm |
    • Sane Person

      Comprehensive health coverage is not an "enti.tlement". It is part of the compensation the employee gets for working there. (The very few that actually gets insurance from this company that claims to be so worried about them). Its time to put the fable book down and deal with reality for a while. There is a reason why no one of import takes your silly bible rules seriously. They know its only for show to keep the sheep in line. When the real work must be done, the magic sky fairy is ignored and people do what they need to do.

      January 12, 2013 at 8:41 pm |
  10. KlintzCNN

    History Lesson: Universal employee healthcare coverage is a "modern" phenomenon.

    In the 80s and 90s, providing various levels of healthcare coverage, including dental and optometry, was Free Market. Company A could get an edge up on Companies B & C by providing better coverage for its employees. Company B provided dental. Company C provided optometry coverage.

    Free Market - Government doesn't tell companies WHAT coverage to provide to their employees.

    January 12, 2013 at 8:19 pm |
  11. Tony

    Hobby Lobby is not a church or a person, it is a corporation.

    IT has no "religious beliefs" to protect; if they fail to comply they should be vigorously prosecuted the same as they would be for tax evasion!

    January 12, 2013 at 8:18 pm |
    • goodfor you

      funny in the eyes of the gov .. a corporation is a "PERSON"

      January 12, 2013 at 8:20 pm |
    • Yeah

      Might want to read hwat "corporate personage" means. It does not mean the corporation is a full human. There is no case law or example to show that a corporation can be religious.

      January 12, 2013 at 8:22 pm |
    • msdeb

      oh please, they are a family run business what ever happened to freedom!! if you don't agree that is your right but don't blow your hot air on someone elses freedom

      January 12, 2013 at 8:29 pm |
  12. lerianis

    They should take this loophole to court. While it might be legal by the letter of the law, by the spirit of the law it's exceedingly low to do this.

    January 12, 2013 at 8:18 pm |
    • Yeah

      The loophole is, at the moment, only the opinion of their lawyer, and it's temporary. It may well fall through. And even so, in a few months, they will be forced to decide between Jesus and money. Guess which one they will choose?

      January 12, 2013 at 8:21 pm |
  13. Rick

    The owners could care less about their employees; it's all about their ideology. A weird view of 'Christianity'... Then again 'GOP Christianity' isn't really Christian.

    January 12, 2013 at 8:18 pm |
  14. Josh

    I'm sure Hobby Lobby isn't so particular in who they take money from. When the chain announces it will no longer serve customers and take payment from anyone who has sinned, then I will think they're true to their Christian ideals. As for their current stand, it's all about their money and politics, not anything to do with religion. So, would it be legal for a company run by a member of the Jehovah's Witness church to say it won't pay for any medical procedure involving blood transfusions since their religion forbids it? If Hobby Lobby wanted to be truly Christian, it would split 100 percent of its profits with the many minimum wage employees who might need an abortion because their company doesn't pay enough for them to raise a family.

    January 12, 2013 at 8:18 pm |
    • msdeb

      abortion is MURDER!! and not only christians believe that

      January 12, 2013 at 8:31 pm |
  15. Jaggar

    I don't believe ANY company should have to pay for birth control. It is not my responsibility to pay for anyone elses birth control, breast pumps, abortions, etc. I am offended that my premiums have gone up to cover those who do not have coverage. I have worked hard to get where I am and it is not my responsibility to support anyone else who made poor decisions in life. Obama promised that those of us who had health care would receive a tax credit for having health care. That was a lie. All I have received is an increase in premiums for two years. Those of you who will boycott Hobby Lobby.....Good luck. As you can see Chick-Fil-A got more business and support when people were upset that they do not support gays.

    January 12, 2013 at 8:17 pm |
    • nachoknights

      seriously, get life, make a hobby of it...

      January 12, 2013 at 8:20 pm |
    • ronnniereagan

      Health care premiums are not taxable. What more do you want?

      January 12, 2013 at 8:22 pm |
    • anagram_kid

      I trust that you pay for all of your HC out of pocket and do not have insurance or belong to a plan then? Because if you are everyone else in that plan participates in your coverage too.

      January 12, 2013 at 8:23 pm |
    • Janine from TX

      Obama promised a tax break for health care...really? When? Care to show us the facts? You obviously know little about healthcare if you think premiums have only recently increased because of the uninsured. People without coverage have been using our emergency rooms forever; long before Obama. I'm assuming that you are ok paying for welfare, food stamps and medical clinics that are free for the poor, the uninsured and all those unwanted children? Or maybe we should just let people die in the streets? I'd gladly pay for abortions anyday given a choice....far less expensive in the long run.

      January 12, 2013 at 8:28 pm |
    • Julie

      So you would rather pay for childbirth than an abortion? Lot more costly. It's all part of healthcare. I may not like paying for your testicular cancer therapy either.. because hey I don't have those issues... but that is why you pay for insurance and so do I. We have different needs from our health insurance. Just cause you don't like it... too bad.

      January 12, 2013 at 8:29 pm |
    • Spotimom

      It's the insurance company that should pay for prescriptions if they offer prescription coverage. Hobby Lobby is not paying for the pills, they are providing their employees insurance coverage. If you have insurance then you should have access to whatever your doctor prescribes for you. I don't have cancer, but do I blame my premiums on those darned cancer patients who need chemo. Of course not! Why do you think women's reproductive health is anything less than any other health issue. Let me guess, your a man. Do you have a mother, wife, daughter, sister? Wake up!

      January 12, 2013 at 8:32 pm |
    • Jeff

      Well, Obama promised it would lower premiums too but we have seen how that is working out. Kind of like how he said the stimulus bill would reduce unemployment to < 6% by the end of 2012.

      January 12, 2013 at 8:36 pm |
  16. Matt

    "war on women

    @Matt. I have the right to worship anything I want or nothing at all. Just as our founding fathers did! I know history and the christians want us to believe that our founding fathers where christian and most where NOT. So you read what ever fairy tale history book you want I will read mine!"

    lol. wait....wuuuut? Please explain in some detail these Founding Father who were not Christian because past the natives ho practiced Animism and the Norse who worshiped the Asgardians it was pretty much one long Jesus parade.

    January 12, 2013 at 8:17 pm |
    • Matt

      And even then only specific kinds of Jesus. It took until JFK for Catholics to have enough love to get a President elected and even that took JFK making a speech to say he wouldn't let the Pope tell him what to do.

      January 12, 2013 at 8:19 pm |
  17. Grundoon

    I won't be shopping there anymore. All they carry is cheap Chinese made crap anyway.

    January 12, 2013 at 8:17 pm |
    • gaggedinusa

      i never did, but definitely won't start now.

      January 12, 2013 at 8:18 pm |
    • You're a moron!

      So does Wal-Mart...are you gonna quit shopping there too?

      January 12, 2013 at 8:21 pm |
    • Matt

      What kind of idiot shops at Walmart to begin with?

      January 12, 2013 at 8:23 pm |
    • Here is for Matt

      These are the people of WalMart. It's pretty damn funny:


      January 12, 2013 at 8:27 pm |
  18. Johan S

    Maybe they can not pay anyone's salary too since salaries can be had to pay for abortion.

    January 12, 2013 at 8:16 pm |
  19. selfevolved

    I always wish I could boycott idiot companies like this... but every time a story like this breaks, it's a store I don't shop at anyway. And would never shop at ever, already.

    January 12, 2013 at 8:16 pm |
    • Yeah

      Yeah, I agree. It's hard to boycott Chik Fil A when you don't eat shit food.

      Interesting how Christian businesses always target the trailer park crowd.

      January 12, 2013 at 8:19 pm |
  20. JDUB

    99.999% of everything in Hobby Lobby is cheap stuff made in China. Way to go in supporting America, Hobby Lobby. And it's so nice to see a Christian organization skirting the law, how surprising.

    January 12, 2013 at 8:15 pm |
    • Chris

      @JDUB, where Hobby Lobby's products are made is totally irrelevant to the issue.

      Regarding "skirting the law", WHAT is your point??

      WHERE did you get the idea that Christians are to obey ALL laws??

      Christians are to obey man made laws insofar as the man made laws do NOT contradict what the Bible requires.

      Regarding what the Bible requires is a different topic.

      Before commenting on an issue PLEASE get informed.

      January 12, 2013 at 8:30 pm |
    • Brian

      What does standing up for their beliefs have to do with not supporting America. I also don't agree with abortion and would do all I could to keep my money from helping someone commit murder. That is my choice with my money as it is theirs. I get so sick of the argument that so many use that Christians do not have the right to tell me what to do. We are not telling you what to do but what we are saying is that we believe that it is wrong and we will not have anything to do with it. I do see repeatedly that those who disagree with us constantly tell us that we do not have the right to believe the way that we do. You and others that believe like you are complete hypocrites.

      January 12, 2013 at 8:31 pm |
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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.