UPDATE — The Archdiocese of Philadelphia lost its bid to block regulations of the Affordable Care Act (ACA) June 26, but a new ruling will prevent the church from paying fines of $160,000 a day for noncompliance.

Judge Ronald Buckwalter of the United States Eastern District Court refused to grant the injunction that the archdiocese and its Catholic Charities agencies had sought earlier this month against the so-called HHS mandate, a set of regulations by the Department of Health and Human Services that would force some religious employers to provide employees with access to contraceptives, abortifacients and other services that violate Catholic beliefs.

The archdiocese immediately appealed the decision on Thursday, and by Friday afternoon the Third Circuit Court of Appeals granted a stay of Buckwalter’s ruling, meaning the penalties for not complying with the regulations would not be assessed beginning July 1 as expected.

The appeals’ court ruling directed the archdiocese to review the U.S. Supreme Court’s anticipated decision on Monday morning, June 30, on the cases involving the contraceptive mandate and for-profit employers Hobby Lobby and Conestoga Woods.

Following that review, the archdiocese and Catholic Charities will have until July 9 to file a new appeal on the June 26 decision.

“I’m grateful for the order issued by this court, which allows us to continue our pursuit of the First Amendment principle of religious freedom,” Archbishop Charles Chaput said in a statement late afternoon June 27. “Thankfully, the injunction will allow our charitable entities to continue performing their good works and ministerial outreach to people throughout the Philadelphia region without fear of facing punitive fines.

“We will continue, on behalf of all believing Catholics, to stand up for religious liberty and our right to minister to those most in need according to the teachings of the church.”

Although the archdiocese qualifies as a religious employer and thereby enjoys an exemption from providing the coverage to its employees, the church’s 16 social service and health care agencies organized under Catholic Charities would have faced penalties of $100 per each beneficiary for each day of non-compliance beginning Tuesday, July 1, according to the regulations.

With 1,600 beneficiaries, Catholic Charities’ fines would amount to $160,000 per day. In only six months, the fines would reach nearly $1 million.

Archbishop Chaput said in an earlier statement the morning of June 27 that he was “deeply disappointed” in Buckwalter’s decision and that the archdiocese had appealed it. He said dozens of other cases in the United States similar to the archdiocese’s had been granted an injunction, including the Diocese of Greensburg in western Pennsylvania just last week.

The Pennsylvania dioceses of Pittsburgh and Erie also had been granted injunctions against the regulations last November.

Without relief from the court, next week the archdiocese would been forced “to choose between violating our deeply held religious beliefs or grave financial distress that threatens our ability to continue to perform the good works and ministerial outreach to people in need throughout the Philadelphia region,” Archbishop Chaput said.

“Archdiocesan charities daily assist the homeless, the elderly, immigrants, the disabled, the developmentally delayed and many other segments of our population that are vulnerable. These services are provided regardless of an individual’s religious beliefs or lack thereof. We are grateful for the privilege of ministering to those most in need.

“We seek only to do those works of mercy without government coercion or interference that would compromise our religious convictions. It’s a reasonable request, and for believing Catholics, a fundamentally important one.”

Archbishop Chaput vowed to fight the decision, saying both in his column on CatholicPhilly.com concerning religious freedom and in his statement: “We’ll continue to press it in every way and at every level of judicial appeal available to us.”

Buckwalter rejected the archdiocese’s contention that the ACA regulations violated the constitution’s protections for free exercise of religion or for free speech.

He wrote that the archdiocese and Catholic Charities had not shown “a substantial burden” from the regulations, despite testimony of Joseph J. Sweeney, secretary for Catholic Human Services of the archdiocese, and arguments of lawyers for the firm Conrad O’Brien in Philadelphia.

A large portion of his opinion was devoted to examining the church’s main argument that signing a form authorizing a third-party insurer to offer health coverage under the ACA was “a vital link in a chain toward the provision of contraceptive services.”

Buckwalter essentially stated the government had no authority to force a third-party health plan administrator such as Independence Blue Cross, the Philadelphia-based administrator for the archdiocese and Catholic Charities, to offer contraceptive coverage.

Even though financial incentives for the insurer exist in the form of government reimbursements for offering contraceptive coverage, Buckwalter believed the company would not accept them, saying there was “no evidence in the record” to support the speculation of the archdiocese and Catholic Charities that Blue Cross would offer contraception because it had financial incentives to do so.

“It is equally conceivable that Independence Blue Cross would conclude that it is in its overall economic interest to forego the government benefit and continue to adhere to the wishes of its client,” Buckwalter wrote.

While Buckwalter conceded that the Third Circuit court had not ruled nor heard arguments on the government’s challenge of injunctions granted to the Pittsburgh and Erie dioceses, he cited similar cases seeking injunctions brought by the University of Notre Dame and the Michigan Catholic Conference.

In those cases the Sixth Circuit that found the contraceptive mandate itself posed “no substantial burden” on religious employers, he wrote.