Georgetown University last week accepted an olive branch from the Obama administration that puts up a firewall between religious nonprofits and insurance for their employees' birth control, while a court in Oklahoma on Friday nudged the issue toward a Supreme Court showdown on behalf of for-profit companies that have not been given similar leeway.
A federal district judge granted Hobby Lobby, a crafts store chain based in Oklahoma City, a preliminary injunction from the mandate until the merits of its case are decided in court — a decision that religious opponents of the mandate lauded as their most significant legal victory to date.
Battles over the contraception rule tied to the Affordable Care Act have raged for more than a year in the courts, on Capitol Hill and even on talk radio, where conservative radio host Rush Limbaugh had to apologize last year for slurs he used to describe Sandra Fluke, a Georgetown University Law Center student who testified in support of the mandate.
But a confluence of deadlines, regulatory moves and legal decisions have converged in recent months and could force employers to take stock of their positions as the Obamacare law is being fully implemented.
"I think they need to figure out what their benefits are going to look like," said Purval Rawal, a senior manager at Avalere Health, a Washington-based advisory company.
Dozens of corporations and religiously affiliated hospitals and universities have filed suit over the birth control mandate, which requires employers to insure Food and Drug Administration-approved forms of contraception if they offer health coverage to their employees. These employers have complained particularly about covering emergency contraception, which they equate with abortion.
The mandate applies to for-profit employers' health plans issued on or after August 2012, while religious nonprofit employers such as universities and hospitals must comply with the mandate when they renew their health policies on or after Jan. 1.
As it stands, nonprofit objectors have "only got a few months to either comply or get a court victory to protect them," said Lori Windham, senior counsel at the Becket Fund for Religious Liberty.
Houses of worship are exempt from the mandate, and religious nonprofits may offer the coverage without managing or paying for it, but for-profit corporations have not received any accommodations.
The judge's decision in the Hobby Lobby case was based on a June 27 ruling by the U.S. Court of Appeals for the 10th Circuit based in Denver, which cleared the way for the company to fight its case on religious grounds. The Obama administration must decide by Oct. 1 if it will appeal the circuit court's decision.
Four other circuit courts are examining the issue and have split over the for-profit plaintiffs' likelihood of success in pursuing their claims.
"We have, in general, expected one of these cases to get to the Supreme Court," said Louise Melling, deputy legal director at the American Civil Liberties Union. "The question now is just which one."
The ACLU supports the mandate, saying it does not impose a significant burden on employers and that employees should not have to adopt their employers' beliefs.
Some religious nonprofits have decided to comply through the accommodation the administration announced in late June. Under the regulatory compromise, insurers or third-party administrators will cover and pay for birth control through separate policies, so the nonprofit employers are not involved in covering their employees' contraceptives.
Officials at Georgetown — a Catholic university — said "claiming the accommodation marks no change in our mission, our governance, or our commitment to a community of diverse backgrounds, faiths, cultures and traditions."
Ms. Fluke, who made headlines last year when congressional Republicans spurned her testimony in support of the mandate, tweeted in celebration and thanked those who supported her mission.
Earlier this month, the Catholic Hospital Association also announced it would comply with the mandate in line with the accommodation.
But the CHA and Georgetown are at odds with the views of the U.S. Conference of Catholic Bishops and the Southern Baptist Convention, which alongside other religious groups recently drafted an "open letter" opposing the mandate and final accommodation.
Ms. Windham said she would not be surprised if religious nonprofits refiled lawsuits that were dismissed on procedural grounds before the Obama administration finalized its accommodation.