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. BT

    So let me get this straight... conservatives–the people who often speak of their desire for "small government"–want the government to control our bedrooms and corporations to control our personal choices regarding birth control. If that is "small government," then I choose socialism.

    January 13, 2013 at 10:23 am |
    • Common Sense

      Yes - government not forcing individuals to violate their religious liberties equals government controlling our bedrooms.

      Government not being allowed to make you do something equals government control.

      This is why we should have an IQ test for voting.

      January 13, 2013 at 10:36 am |
  2. Pants

    An arts and crafts store that doesn't supports women's rights? That's their biggest customer base. Probably a good time to sell your stock in this company. Get out now.

    January 13, 2013 at 10:23 am |
    • Belvarie Varnado

      They support regular birth control just not the so-called abortion pill.

      January 13, 2013 at 10:53 am |
  3. bigfoot

    It is time to shake these people off like bad DNA.

    January 13, 2013 at 10:22 am |
  4. Blue Dog

    Unless the company in question is a religious organization, how can the company have a religion? I feel the premise to Hobby-Lobby's argument is twisted. Company can not selectively remove services from its health care plan based on "its religious" beliefs.
    But this issue brings another interesting question. Why are we the only developed nation in the world where we have put a person's health in hands of its employer? Why do we have an employer welfare society? Let the federal govt provide a universal health coverage plan for all so that companies can be freed from this responsibility and they can focus on their core business. Then this problem does not arise as it's between the person and their health coverage plan.

    January 13, 2013 at 10:20 am |
    • Nadine.

      The company is definitely NOT a religious organization. The wording was set up for churches and similar places of worship. As to how can a company have a religion, just look at People United, where the Supreme Court has ruled that corporations are people.

      January 13, 2013 at 10:35 am |
  5. david

    I'm happy someone is fighting it. The majority of Americans don't want socialist health care. The bill is so crazy that you would have thought an 8 year old wrote it.

    January 13, 2013 at 10:19 am |
    • bigfoot

      Too bad. You are stuck with it. Unless you want to go to jail. THAT can be arranged.

      January 13, 2013 at 10:26 am |
    • heliocracy

      Oh, go buy a decent health insurance policy for your family without help from your employer or government, see how you do. You'll be on food stamps in a month.

      January 13, 2013 at 10:36 am |
    • Common Sense

      BigFoot is right. Just like other totalitarian governments, we also are headed toward the day when you will have to choose between your soul liberty (as Roger Williams would have put it) or a jail cell. We are going full circle. Salem, Mass would be proud.

      January 13, 2013 at 10:38 am |
    • End Religion

      If you'd put aside the childish need for imaginary friends you wouldn't be concerned about your non-existent soul.

      January 13, 2013 at 11:38 am |
  6. GonzoinHouston

    Since the law requires coverage, and it is against the owner's religious beliefs, then he should sell his interest in the company to someone that is willing to obey the law and resign.

    January 13, 2013 at 10:15 am |
    • Common Sense

      Actually, what the owners should do is move 13,000 employees from full time to part time and drop all health coverage, just like most restaurants are doing to avoid the punitive ObamaCare tax on business.

      January 13, 2013 at 10:40 am |
  7. Laura

    This whole issue is ridiculous. Assuming that Hobby Lobby uses one of the main large insurance companies, all of the major insurers provide coverage for the morning after pill and elective abortions under at least some of their plans. Just because Hobby Lobby wants to choose a plan that excludes coverage for these things doesn't mean that the insurance company never pays for them. Basically, Hobby Lobby's premium dollars will go to pay for someone else's abortion, just not for their own employees. If they really want to be "moral", they should find an insurer that never pays for anything that they find objectionable.

    January 13, 2013 at 10:15 am |
  8. MikeV

    There are many laws that I don't agree with, like charging people with a felony for less than 1 oz of pot in my state of Texas. But all of my complaining won't stop me from getting arrested if caught. Same with ObamaCare. The law says that if a woman wants this prescription pill then the law says that she must receive it. Period.

    January 13, 2013 at 10:14 am |
  9. bigfoot

    This is just another salvo in the ongoing culture war that will come to DEFINE this era in American history.

    January 13, 2013 at 10:09 am |
  10. Tutuvabene

    I wonder if another way for Hobby Lobby to get out of the requirement is to pay the employee for the amount of the employer insurance contribution and then the employee can go out and buy their own insurance.

    January 13, 2013 at 10:07 am |
  11. notaposter

    Abortions are nasty enough as they are, why should the government cover them?

    January 13, 2013 at 10:06 am |
    • heliocracy

      Birth control is not abortion, genius.

      January 13, 2013 at 10:07 am |
  12. Tutuvabene

    Would have been nice if the story provided more of an explanation of what "shift the plan year" means.

    January 13, 2013 at 10:05 am |
    • OneVoiceInFL

      A plan year starts at the start or renewal date of a plan. So, anyone whose plan that started on July 1, 2012 would still be in their 2012 plan year until it renews on July 1, 2013. Hobby Lobby must have worked with the insurance company to shift their renewal date, thus extending their 2012 plan year by several months.

      January 13, 2013 at 10:18 am |
  13. Celeste Zappala

    Do they also object to supporting drone strikes, optional wars, Guantanamo detentions,? Can we all decide which Government programs offend our religion and act accordingly without penalty? Or what would happen if a Christian Scientist employer refused to allow employees to have blood transfusion services, or if Jehovah Witnesses , who have a host of forbidden practices imposed these on their employees? Is this just about Women's reproductive health, or everything??

    January 13, 2013 at 10:02 am |
    • Common Sense


      You mean the Government passed a law to force Hobby Lobby to manufacture and operate drones, conduct wars, and run Guantanamo?

      Perhaps Obama should pass a law forcing you to be a guard at Guantanamo and see how you liked having your liberty infringed upon. Bet you wouldn't be so cynical then.

      January 13, 2013 at 10:10 am |
    • heliocracy

      I've just invented a religion where it's against my beliefs to pay taxes and obey traffic laws. My god will get me if I do either one.

      January 13, 2013 at 10:34 am |
    • Celeste Zappala

      Sorry if I was not clear. We all pay taxes and participate in the support of a variety of government mandated programs and actions. ISome people actually do withhold paying "war tax" and have been prosecuted. My question is, if we find certain pasrs of government rules or actions morally objectionable, what can a person or company do? what should they do?

      January 13, 2013 at 11:03 am |
    • Celeste Zappala

      Sorry if I was not clear. We all pay taxes and participate in the support of a variety of government mandated programs and actions. ISome people actually do withhold paying "war tax" and have been prosecuted. My question is, if we find certain parts of government rules or actions morally objectionable, what can a person or company do? what should they do?

      January 13, 2013 at 11:04 am |
    • Sue Jorgensen

      The employer does not push any of his beliefs on the employee, The Jehovah's Witness would gladly pay out of their pocket for the additional money it used to cost for a bloodless operation. They used to have to search to find a Dr that would do a bloodless operation, so you know that he was probably not on the plan.
      As a rule any Religious Obligation ( Meat that is Kosher or Halal) Observance of a Religious Rule , No blood transfusions, no birth control etc was never asked of the state to pay for Because it is a Religious Belief and there is a separation of Church and state.
      The Federal Government has made the mandates that violate the freedom of the Employer to follow the tenets of their religion
      The Federal Government should make up the difference, for the services that they have mandated which violate Christian Principles.
      But can and should the Governments ( tax money from you and me) money be used to provide abortions? In the past there was alot of discussion on the legality and morality of this. I personally don't care and I think this is where your post about Guantanamo and illegal wars was trying to go

      January 13, 2013 at 11:38 am |
  14. ToldUso

    They're operating a business, not a church. If you follow their argument fully, then they wouldn't pay any taxes. They're not an oil company, afterall.

    January 13, 2013 at 9:58 am |
  15. Lori Jackson


    Disgusted with Hobby Lobby's evasion of the law and treatment of there employees? Let them know it. Don't let them assume that we, as customers, all share their beliefs.

    January 13, 2013 at 9:50 am |
    • Bob

      So they provide a safe, clean job environment, and provide health insurance to qualified employees, including birth control. The only things they do not cover are abortions and morning after pills. This you find disgusting? Why don't you going after strip clubs that submit women to nightly abuse? That is truly disgusting. Or is this more of an agenda thing for you?

      January 13, 2013 at 9:58 am |
    • Steve King

      That is such a typical and dissapointing response. It is their company to run how they believe as long as they do not discriminate against those they hire and maintain as employees. It is up to the employees and customers to decide if they want to work or shop there. If the employee or customers have different values so be it they have other options. If enough people disagree they will go out of business eventually. This is a private company not a public one. Wow....amazing the responses out there where people who have no "skin" in the game attempt dictatee who does what with their money and lives. So tired of these people. While I don't agree with their stance I believe they have a right to not be dicatated to.

      January 13, 2013 at 10:07 am |
    • MikeV

      Sorry, an error has occurred and we cannot complete your request.
      Either they shut down that page or we crashed it from too many hits, lol.

      January 13, 2013 at 10:16 am |
    • Scott

      Great idea. Why don't you tell them to remain open on Sundays, too! In fact, send a letter to your bud Obama and tell him to mandate that, too. Hey, maybe we can just let the US Gov take over Hobby Lobby and run it better than the current owners do. Man, that would be fantastic. Imagine a United States where the government dictates our lives fully! I can hardly wait.

      January 13, 2013 at 10:25 am |
    • daveo

      hobby lobby will end in this house, we teach our kids to obey the law, full boycott of hobby lobby a.k.a. right fringe nut family

      January 13, 2013 at 10:27 am |
    • daveo

      face it ....all thier products say MADE IN CHINA, over 2 billion a year and they want to write thier own laws, BOYCOTT RIGHT WING NUT JOB HOBBY LOBBY.

      January 13, 2013 at 10:29 am |
  16. gg

    Obama doesn't even go to church, so he certainly doesn't care about religious freedom. This is no different than the Pilgrims having to leave England to to worship freely.

    January 13, 2013 at 9:48 am |
    • Sonny

      It's no different that polygamy or use of peyote, you mean – both religious practices ruled illegal, You really should understand the SCOTUS rulings on the execrise clause, it will help you come off as far less ignorant. Your biases are interfering with your ability to think.

      January 13, 2013 at 9:57 am |
    • C Taylor

      He actually does attend church.

      January 13, 2013 at 10:06 am |
    • tdoub

      First of all, President Obama does attend church as much as other past sitting presidents. Secondly, those of us who do not believe in God cherish our religious freedom even more than belivers, lest we be burned at the stake. Which is, if you recall, what the pilgrims began doing when they settled here to escape religious persecution. Ironic, huh? You see, Hobby Lobby is actually not allowing their employees to have a personal relationship with their God. They are sticking their nose into their employees' business. Those benefits were earned through labor and are now the property of the employee, just like money. What an employee does with their hard earned property is their business not corporates'.

      January 13, 2013 at 10:21 am |
    • JB


      You should really research your statements. The only recent generation president who regularly attended church was Bill Clinton. Both Bush presidents preferred to worship at the chapel at Camp David, and Reagan didn't attend church citing issues with the screening process. But, hey, keep spitting out your opinions, they'll stick as facts to a few morons who believe everything they read on the Internet.

      January 13, 2013 at 10:36 am |
    • tdoub


      I'm wondering what I said wasn't factual. I said "President Obama does attend church as much as other past sitting presidents", not more than, not as much as all past presidents, but as much as some others. There is plenty of video evidence of him in church. The l post says that he does not attend church (which is what I was referring to). I wonder why You did not comment on that REAL factual error. BTW name calling isn't nice. I learned that in kindergarten.

      January 13, 2013 at 1:47 pm |
  17. Sarah

    Good for them! I hope more companies stand up and fight this travesty called "Obamacare"! This country was built on Christian values. And that is the only thing holding it together rights now. Let us all pray that good overcomes evil.

    January 13, 2013 at 9:47 am |
    • Michael

      Yeah, good old Christian values, yet you owned slaves. Did the Church speak out on that?
      Right, no answer!

      January 13, 2013 at 10:05 am |
    • Dennis

      It might have been built on Christian values,but it is now based on dollar values.Maybe the owners of Hobbly Lobby can find a brain at Hobbly Lobby.

      January 13, 2013 at 10:06 am |
    • midview132

      Sorry Sarah but this country was founded on money plain and simple, years before the Pilgrims there was this little colony called Jamestown whose only purpose was to make money. Religious freedom means the right to chose your religion not the right to force everyone to chose yours!

      January 13, 2013 at 10:10 am |
  18. JOE

    If Obamacare isn't good enough for politicians and other companies the Obama administration gives exemptions to, why not give Hobby Lobby an exemption?

    January 13, 2013 at 9:46 am |
    • Dennis

      Maybe they should change their name to Hobby Lobbyists....Is their founder named Todd Akin?...What a joke of a company.Stupid business name,too!

      January 13, 2013 at 10:09 am |
  19. Personal beliefs

    I am a big believer in pro choice and women's rights to birth control but this is different. Hobby Lobby truly follows its religious beliefs. They are closed on Sundays, donate profits, etc. They will pay for birth control. What the are fighting is the morning after pill which terminates pregnancy which is totally against what they believe in. Should companies have to pay insurance which covers abortions? This is basically the same thing according to your personal beliefs.

    January 13, 2013 at 9:44 am |
    • Dennis

      How is that different than when your tax dollars are used to execute condemned prisoners?

      January 13, 2013 at 10:11 am |
    • midview132

      Sorry but if you think this is about religious beliefs you are misguided by the magicians show hand. The Repbulicans are using it as their rally point, this is nothing but publicity for the Republicans and the store, the government needs to fine them and jail them for not following the law. Too many people think that they dont need to follow laws in America today. Fine them, jail them, and if they have a problem with that let them take it to the Supreme Court but being a bunch of politically correct wussies.

      January 13, 2013 at 10:13 am |
    • Laura

      The morning after pill does NOT terminate an existing pregnancy. You are thinking of RU486, the abortion pill. All the morning after pill does is suppress ovulation.

      January 13, 2013 at 10:23 am |
    • OneVoiceInFL

      So the argument is that Hobby Lobby, a non-religious corporation, shouldn't have to abide by the law because of its owners' religious beliefs. Let's take that a step further then. Should a company owned by a member of one of the various religious sects that believe in prayer over medical treatment be allowed to not provide health insurance at all? After all, it's their religious beliefs. I can see it now. You'll start seeing huge numbers of owners of privately held companies claiming that their religion forbids medical treatment, therefore they won't be providing health insurance to their employees.

      January 13, 2013 at 10:27 am |
    • Jane

      Yet, the are so moral and Christan that they do business with china, which has a one child policy, actively promotes abortions, and has dismal other human rights.
      Its more likely Hoppy Lobbies religion is money, as most of the right wing seem to be today. Stop be so hypocritical and simply admit the truth. Oh wait, that's another one of those sins you'll chilies to ignore.

      January 13, 2013 at 10:42 am |
  20. Tao

    So do they stone a bad employee? If an employee needs to be compensated do they give him a goat? "Religion" is often an excuse to refuse to do something. I hope these fines stay in place and mount.

    January 13, 2013 at 9:38 am |
    • Dennis

      Drive them out of business if they can't comply with todays laws.They can stand behind their religious beliefs and the laws can dictate the penalties that will be levied against their company.Fair is fair,and law is law.

      January 13, 2013 at 10:16 am |
    • Sue Jorgensen

      TAO, I think you were just being funny, but the modern day Christian is not held to the Old Testament Law, Since Jesus replaces the old Law with the new Law.
      Thus why Christians can eat pigs, don't have to practice Jubilee ( fallowing your fields) or Passover
      However Islam in the old country still Stone violators of the law

      January 13, 2013 at 12:05 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.