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Hobby Lobby appeal tests limits of federal birth-control coverage mandate

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DENVER - In the most prominent challenge of its kind, Hobby Lobby Stores Inc. asked a federal appeals court Thursday for an exemption from part of the federal health care law that requires it to offer employees health coverage that includes access to the morning-after pill.

The Oklahoma City-based arts-and-crafts chain argues that businesses — not just the currently exempted religious groups — should be allowed to seek exception from that section of the health law if it violates their religious beliefs.

The owners should have their religious views protected even though they run a store that makes a profit, said Kyle Duncan, who argued before the U.S. 10th Circuit Court of Appeals on behalf of the Green family, founders of Hobby Lobby Stores Inc. and a sister company, Christian booksellers Mardel Inc.

The stores are a "profit-making company, yes, but also a ministry," Duncan argued.

A lawyer for the U.S. Department of Justice noted for-profit businesses aren't covered by an exemption added to the law for religious organizations. Alisa Klein said allowing Hobby Lobby to avoid covering contraceptive devices it doesn't like is in effect imposing its religious beliefs on employees.

"If you make an exemption for the employer, it comes at the expense of the employee," said Klein, who argued the government's case in a similar contraceptives mandate appeal heard in a federal appeals court in Chicago.

More than two dozen other businesses in multiple states are challenging the contraception mandate. Hobby Lobby is the most prominent company making the claim.

The 10th Circuit in Denver opted to hear the case before eight active judges, not the typical three-judge panel, indicating the case's importance.

Hobby Lobby, which is self-insured, will face fines by July 1 if it does not provide the coverage, Duncan said.

Hobby Lobby calls itself a "biblically founded business" and is closed on Sundays. Founded in 1972, the company now operates more than 500 stores in 41 states and employs more than 13,000 full-time employees who are eligible for health insurance.

The Hobby Lobby case has attracted broad interest from health and religious groups. A panel including reproductive rights organizations and the American Public Health Association banded together last year to ask the court to reject Hobby Lobby's claim. The groups argued it would be dangerous precedent to allow for-profit private businesses to use religious beliefs to deny coverage.

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Kristen Wyatt can be reached at HYPERLINK "http://www.twitter.com/APkristenwyatt"

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