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Hobby Lobby: Shooting Fish in a Barrel

July 11, 2017

 

Everybody’s favorite cheap-arts-and-crafts-supply-store-cum-religion is back in the news. Turns out Hobby Lobby itself had a hobby – buying black-market artifacts from Iraq. Not exactly very Christian of them. You probably know Hobby Lobby best from their recent Court Case – taking the Obama Administration to the Supreme Court over the Affordable Care Act. Burwell v. Hobby Lobby was a major case – it created new law. Since we now have this precedent, I thought it might be fun to apply it here.

 

As you know well from reading the Commentary, one of the critical pieces of the Affordable Care Act is the list of Essential Health Benefits, or EHBs. Anything that counts as health insurance for the purpose of the ACA must cover its EHBs. We can quibble about exactly what health services should be required for all comprehensive health plans. But the ACA’s list is pretty common sense: ambulatory care, prescription drugs, maternity care, etc. One of the things on the list is birth control, contraception. Now, the vast majority of American women will use birth control at some point in their lives. Many use it to prevent pregnancy, but others use it for unrelated, perfectly sound and often critical health reasons. The most common reason women give for not using contraceptives is the out of pocket cost (before the ACA, many plans did not include them). In other words, inclusion of contraception on a list of EHBs is, from a medical perspective, not controversial.

 

Ah, but there are some people who are against contraceptive use for religious reasons. As long as they are of an appropriate age and sound mind and body, that’s just fine. It’s their decision to make – just them and their doctor, no government, no company telling them what to do. Unfortunately, we live in a world where many Americans get their health insurance through an employer – this causes a problem.

 

Religions that are both opposed to contraception and operated as employer objected to the Obama Administration; an accommodation was made. If a religion (or affiliate) filled out a form, then they could be excepted from the need to provide contraception. The cost would be picked up by the government directly. Now – some religious institutions complained that the act of filling out a form was, itself, impinging on their exercise of religion. A further accommodation was made. The Obama Administration was really trying to strike a balance.

 

Hobby Lobby is owned by the Green Family. I don’t doubt the sincerity of their religion – they proclaim it pretty openly. They are starting a Museum of the Bible in Washington, D.C. And they don’t like contraception. Don’t like it so much that they did not want to offer it in their employee health plans, as the ACA required.

 

Let’s talk a bit about corporations. Corporations are legal entities, operating under the laws set up for them by the jurisdiction in which they were established. This is different from actual, living people, who have fundamental rights, in the Constitution. This isn’t to say that corporations don’t have any rights – they have the exact ones included in the laws governing corporations.

 

Why do people create corporations? Well, there are a lot of reasons – but the one relevant to this exercise is liability. The owners of a corporation are (generally) not responsible for its liabilities. If you sue General Motors and win, you can’t collect from the people who own GM stock. The corporate structure acts as a shield. It’s called, the “corporate veil,” meaning that the court can’t see who is behind it. It is very effective at protecting the owners of a corporation; the veil can only be pierced in very rare instances. For all everyday purposes, the corporation is treated as a completely separate entity from its owners.

 

So, many people were surprised when the Green Family said that their (personal) religious rights were being infringed because their (corporate) employee benefits were required to include contraception. There is a law, the Religious Freedom Restoration Act (RFRA), that says the government has to be careful when it impinges on religious beliefs. OK, fine. But a corporation is a legal entity, a piece of paper. How can it have religious beliefs?

 

You can see how this is going – the Supreme Court ruled that, at least for closely-held private companies like Hobby Lobby, the religious beliefs of the owners could be applied to give corporation itself rights under the RFRA. The decision was theoretically narrow, but you can easily see the potential extension. What laws (or, at a minimum, regulations) can be waived due to beliefs? The beliefs need to be “sincere” – I ask my small-government readers if they really want the Government deciding which beliefs are sincere and not.

 

And the Greens did have other options. The could have not offered health benefits, rather paying a fine (which would have cost less than the benefits themselves). But, they didn’t want to do this. If their beliefs were really so sincere, then they didn’t have to start a corporation in the first place. Basically, they wanted to take advantage of the corporate shield for liability without following the requirements needed to maintain the shield. Nice setup if you can get it.

 

Fast forward to 2017: Hobby Lobby pays a $3 million fine for trafficking in black-market artifacts for the aforementioned Museum of the Bible. The Greens claim that the whole thing is an issue of “incomplete paperwork” and they should have “exhibited more oversight.” But, the laws against trafficking these items exist for valid reasons. One of them is that black-market sales like these are a common means of financing terrorism; ISIS has raised a significant portion of its funding in exactly this way. Now, the transactions in question here date from 2010 – before the rise of ISIS, so it is incorrect to say that “Hobby Lobby funded ISIS.” But, believe it or now, there were terrorist groups in Iraq before ISIS; it seems safe to postulate that significant Hobby Lobby money went to fund said groups.

 

But what really got me thinking was – why was Hobby Lobby involved at all? The Greens are starting the Museum – why didn’t they buy the items personally? It seems to me like they missed out on the potential to donate the objects to the Museum, taking a nice deduction in the process. Whatever I think of the Greens, I don’t think they are stupid. Doesn’t it seem plausible that the reason to buy black-market artifacts within a corporate structure was specifically to gain the legal protection it provides? I have no way to know their thinking – but I don’t have any other good ideas.

 

So let’s bring this full circle. The entity Hobby Lobby is so closely related to their personal beliefs that it can use a religious exemption to prevent its employees from receiving contraception. (Yes, prevented. Many women working the floors and cashiers in Hobby Lobby stores are certainly unable to afford it otherwise). On the other hand, the Greens are so separate that they can’t be prosecuted personally despite potentially funding terrorists. I don’t know about you, but the whole thing just doesn’t seem very Christian.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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