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. jkantor267

    Well my religions says that Hobby Lobby owners are heretics and should be burned at the stake.

    January 12, 2013 at 6:52 pm |
    • rjv252

      and you would be an a**.

      January 12, 2013 at 6:55 pm |
    • Tax Damned Churches NOW

      I guess I am also then because my religion says I should avoid employing kneegrows. You OK with that? ALL religions are misogynistic and unAmerican and so are you, rjv252. Move to Iran and live among your like-minded fundamentalist cretins.

      January 12, 2013 at 7:00 pm |
  2. rad666

    What is America spending on overseas conflicts per day? A billion?

    That would more than provide adequate health care for Americans without stupid laws.

    January 12, 2013 at 6:52 pm |
  3. Marty

    If Barry was actually the Christian that he falsely claims to be, he would drop this requirement from his socialist tax legislation.

    January 12, 2013 at 6:52 pm |
  4. crowstar

    Hobby Lobby shouldn't worry about their employees using the "abortion inducing drugs" because they do not employ people who would even use it, right???

    January 12, 2013 at 6:52 pm |
  5. auntie

    I will no longer shop at Hobby Lobby.....

    January 12, 2013 at 6:52 pm |
    • Dianne

      Ditto. A new Hobby Lobby is being built in my town and I was definitely going to check it out. Not now; not ever. For a company to impose its own strident fundamentalist doctrine on their employees just gives me the creeps.

      January 12, 2013 at 6:55 pm |
  6. Ditch Digger

    How long until GE, AT & T, Lockheed Martin etc. will suddenly find religion if this ridiculous case ever wins.

    January 12, 2013 at 6:52 pm |
    • Russell

      It will be a long time. Publicly trade corporations are very different from closely held private corporations. Publicly traded companies like GE are more politically correct than a Community College.

      January 12, 2013 at 7:05 pm |
  7. Dear Kenyan Leader

    Clearly, it is time for decent Americans to band together and secede from the tyranny in D.C.

    January 12, 2013 at 6:52 pm |
    • midwest rail

      Clearly, you are delusional.

      January 12, 2013 at 6:52 pm |
    • nitrous

      Too bad your mother didn't have the morning-after pill in her day...

      January 12, 2013 at 6:54 pm |
    • Tax Damned Churches NOW

      ALL religions are misogynistic and unAmerican and so are you. Time for YOU to move to Iran and live among your like-minded fundamentalist cretins.

      January 12, 2013 at 7:02 pm |
    • -=gSpin=-

      And cleary you are an assimilated clone of the machine. Enjoy the kool-aid my friend.

      January 12, 2013 at 7:05 pm |
  8. Heather

    Too bad the morning after pill CANNOT induce an abortion. Some of these pro-hobby lobbyists REFUSE to accept fact.

    January 12, 2013 at 6:51 pm |
  9. SV

    Guess I've bought my last piece of cheap crap at Hobby Lobby.

    January 12, 2013 at 6:50 pm |
    • DC

      If you thought it was cheap crap you wouldn't have bought it to begin with. Nice try though moron.

      January 12, 2013 at 6:53 pm |
  10. Bill

    The Hobby Lobby has no religious freedom to exercise. The right to religious freedom is extended to people, not corporations. So unless you're Mitt Romney and believe corporations are people, this company is exercising a right that does not extend to corporations. Furthermore, while the ownership and executives of Hobby Lobby may feel as though abortion and birth control violate their religious beliefs, by imposing their beliefs on their employees, they are violating the religious beliefs of any employee who believes differently.

    January 12, 2013 at 6:49 pm |
    • John

      Hmmmmm....so the government can force its religious views on the owners of a company. It seems that there is something out there about separation of church and state that should prevent the government from doing that. I guess the government simply wants to force all companies to stop providing health insurance so that everyone will be dependent on the government for it. That certainly appears to be this regimes plan.........

      January 12, 2013 at 6:57 pm |
    • Heather

      To JOHN: considering the morning after pill does NOT induce an abortion, how does this change hobby lobby's argument or yours? Is this still a religious argument? The point is, hobby lobby has no right to pull the religious card out when this has nothing to do with abortion whatsoever. That's why most people are disgusted with their ploy. It's one thing to be angry over forced health care coverage, but another to complain it's over religious causes. They can at least have the balls to state what the problem is they really have, instead of spreading more lies.

      January 12, 2013 at 7:01 pm |
    • Russell

      They are not imposing their beliefs on their employees. Their employees are free to kill all of their in utero children and worship satan on their Sundays off. The owners of HL just don't want to be forced to participate in this sin by paying for it.

      January 12, 2013 at 7:01 pm |
  11. Kelly Young

    The people running Hobby Looby are dirtbags and their employees are like Zombies. I will never buy their useless crap again. Less Lobby. More Hobby. Hello JoAnn's! Hello Michael's!

    January 12, 2013 at 6:48 pm |
    • Russell

      No one is making you shop there. You, however, are forcing them to participate in child killing.

      January 12, 2013 at 6:57 pm |
  12. getalife

    Love it or leave it cons.

    Self deport losers.

    January 12, 2013 at 6:48 pm |
  13. Kris

    The morning after pill covered under the Affordable Care Act does NOT induce abortion. It prevents or delays ovulation. NO egg is released, no pregnancy. There is a pill that induces abortion, but that is NOT the pill covered by this act.

    I will never shop at Hobby Lobby again.

    January 12, 2013 at 6:48 pm |
  14. Jupman

    abortion-inducing drugs-–Lack of understanding what "Birth Control" is is entirely.

    January 12, 2013 at 6:47 pm |
  15. Arvn Huac

    I wonder why the Owners of Hobby Lobby don't ban themselves from being rich, considering that Jesus clearly denounces it in numerous places.

    I guess being religious means you only have to follow the rules you want to.

    January 12, 2013 at 6:47 pm |
    • brad

      My daughter worked for them at the Medina Oh store a few years back. They say any employee who works 36 hrs per week can get health insurance. To get around that they schedule everyone at 32 hrs week. They pay a few cents over minimum wage, but brag about the 20% employee discount. Out of 25 employees at that store only 4 worked enough hours to get insurance, all managers. A lot of employees were single mothers who had to depend on medicaid and food assistance to survive. So really all the tax payers were covering Hobby Lobby's employees for health care. Their 'values' only come into play when it affects their bottom line. Christians my butt, they are grave robbers in my book.

      January 12, 2013 at 7:04 pm |
    • Beckster

      Arvn – Jesus never said that a Christian could not be rich. He only said that it was difficult to be rich and enter heaven. You should read the story of Job some time. Job was a very rich man and God allowed Satan to test him by taking everything from him (his possessions, his family, and to some extent his health) In the end God restored Job's riches because he never cursed God and was able to remain faithful to God and not put his riches ahead of his Lord. In addition, just because Hobby Lobby is a relatively successful company does not mean that the owners are "rich." Do you know how much money the owners of Hobby Lobby have? And even if you did, who are you to decide what rich is or isn't? Even if the owners of Hobby Lobby have millions or billions or whatever you determine someone to be rich, doesn't mean that they are doomed to eternal damnation. In fact, it sounds to me like they are putting their Lord before money and risking losing everything for their beliefs. Most "rich" people probably wouldn't do that. And this is exactly what the Lord demands...that money does not become an idol that can become more important than their relationship with God.

      January 12, 2013 at 7:08 pm |
    • Arvn Huac

      If that is true, brad, then Hobby Lobby is even more hypocritical than I ever imagined.

      January 12, 2013 at 7:15 pm |
  16. sean

    Too bad the drugs they are refusing to pay for have nothing to do with abortion.

    January 12, 2013 at 6:47 pm |
  17. svann

    Does this article anywhere specify what the loophole is? They shifted the date? How do you shift a date? Use the Mayan calendar?

    January 12, 2013 at 6:47 pm |
    • CPA

      Accounting tactics. They are throwing as much of this year's funding of health care into last year as they can.

      January 12, 2013 at 6:49 pm |
  18. Anne

    First, they are not denying birth control. They want to deny funding drugs that cause abortions (like morning after pills). Anyone who has a business gets it. Most who are employees of a business, or on any type of assistance, don't. It's wrong for the government to tell us how to run our lives, and run our businesses. What if the government told a citizen they couldn't have an abortion? Or if they could have an abortion? As citizens, and as business owners, we are getting less and less chance to decide our own fate.

    Now I agree what someone said above. All of their christmas trees are made overseas and they change their model numbers every year which makes it almost impossible to return a defected one for a refund (this happened to me). Anyone with a brain knows the conditions overseas and the requirements of Chinese citizens to abort babies if their families are greater than one, or if they don't pay to have the additonal child. For HL to support this kind of requirement by purchasing their goods overseas is wrong. It IS talking out of both sides of their mouth.

    January 12, 2013 at 6:47 pm |
    • Klark

      It's wrong for a business to decide what medical care an employee can or cannot use. That is worse tyranny and imposition of ideology than the government is doing to Hobby Lobby.

      Hobby Lobby is being very hypocritical, angry that the government tells them they cannot tell others what medical benefits they can have. Pure hypocrisy . . . which isn't surprising from Christians, is it?

      January 12, 2013 at 6:52 pm |
    • KimglyCitrus

      Except Plan B doesn't cause abortions. It prevents sperm from ever reaching the egg and stops conception before it occurs. You'd do well to actually look it up.

      January 12, 2013 at 6:52 pm |
    • sean

      First, the drugs they are refusing to cover have nothing to do with abortion. Given that much of your post is based on this lie, the rest of your argument goes out the windows. Stop making this about Abortion when it is not.

      January 12, 2013 at 6:53 pm |
    • t3chn0ph0b3

      The morning-after pill prevents implantation. It doesn't "cause abortions".

      January 12, 2013 at 6:55 pm |
    • BobT

      Got bad news for you business righties. Government tells you a lot already about "how to run your business," if you are in the public arena. You have zoning laws, tax laws, safety and environmental regulations, employment laws, non-discrimination and equal public access laws, just to name a few. In turn, government protects you (army, navy, etc.), provides the banking system and currency, credit laws and other laws to protect your business, etc. You don't like it?-move your business to Somalia or someplace where they don't have any government to speak of, and see how you like it.

      Meanwhile, a whole lot of us have just written Hobby Lobby off the list of businesses we would ever patronize. It's called "customer choice" and you have just alienated a whole large segment of your potential customer base.

      You are another prime example of an cold-hearted corporation who treats its own hard-working lower-level employees like dirt.

      January 12, 2013 at 7:00 pm |
    • asdfasdfasdfasdfasdfasdfasdfasdf

      Serious question, where do you get your information from? The rest of the intellectual world knows the 'morning after pill' DOES NOT CAUSE ABORTION. It does in fact do the exact opposite by preventing an egg from being fertilized therefore there is no need to have the option for abortion.

      January 12, 2013 at 7:06 pm |
    • Jewels

      Actually, Anne - it sounds like you have a hard time dealing with the idea of adhering to the law and try to justify your views by saying it results in abortion or goes against your ethical views. You can use excuse after excuse but, it's not that much more for a business person to provide healthcare - and further, you should want to offer that vs. not - imagine how much more productive employee's are if they feel valued...

      January 12, 2013 at 7:24 pm |
  19. Jewels

    That's it, no more buying my crochet needles at Hobby Lobby. Who's the sucker now?!@

    January 12, 2013 at 6:47 pm |
    • nickposh

      I'm surprised they still sell crochet and knitting needles.

      January 12, 2013 at 6:56 pm |
  20. GIUK

    What? The Taliban run a chain of hobby stores in the US?!

    January 12, 2013 at 6:46 pm |
    • Klark

      They also own a chain of deep-fried fat sandwich "restaurants."

      January 12, 2013 at 6:53 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.