Hobby Lobby shifts insurance plan to delay mandate fines

Washington D.C., Jan 14, 2013 / 14:02 pm

Arts and crafts retailer Hobby Lobby has found a way to adjust its employee healthcare plan to delay potentially crippling fines for refusing to comply with the federal contraception mandate.

The company will now "shift the plan year for its employee health insurance, thus postponing the effective date of the mandate for several months," announced attorney Peter M. Dobelbower in a Jan. 10 statement.

"Hobby Lobby does not provide coverage for abortion-inducing drugs in its healthcare plan," Dobelbower said, adding that the retailer "will continue to vigorously defend its religious liberty and oppose the mandate and any penalties."

By shifting its insurance plan year, the company will gain time in its battle against the federal contraception mandate, which would have taken effect for it on Jan. 1, 2013.

The controversial mandate, issued by the Department of Health and Human Services, requires that employers provide insurance plans that offer contraceptives – including some drugs that can cause early abortions – and sterilization.

While a narrow exemption to the mandate exists, it does not apply to for-profit businesses or those that hire members of other faiths.

Hobby Lobby is one of dozens of employers that has sued over the mandate, charging that it violates the First Amendment's guarantees of free exercise of religion.

The company's founder and CEO, David Green, started Hobby Lobby in an Oklahoma City garage in 1972. Since then, the company has grown to more than 500 stores in 41 states.

The Greens describe themselves as committed Christians who seek to serve God through all their endeavors, including their business. The family donates large amounts to charity, maintains a minimum wage that is considerably higher than that required by federal law and closes their stores on Sundays, sacrificing profit to allow their employees to worship and rest.

As Christians, the Greens object to funding or facilitating any drugs that can cause abortions, including the "morning after" and "week after" pills.

The company was recently denied injunctions by both a district court and the 10th U.S. Circuit Court of Appeals. An injunction would have temporarily blocked the mandate from taking effect while the case is heard in court.

Hobby Lobby then made an emergency injunction appeal to the Supreme Court. The appeal was denied on Dec. 26 by Justice Sonia Sotomayor, who is responsible for hearing emergency requests from the 10th Circuit. Sotomayor stated that the case did not meet the extreme standard necessary for the Supreme Court to intervene.

The Supreme Court still has the option to review the case after the Hobby Lobby appeal is completed in the 10th Circuit.

If the Greens had not been able to adjust their insurance plan year, they could have been subject to fines of up to $1.3 million per day, beginning Jan. 1 of this year. By Jan. 11, these fines could have totaled more than $14 million.