By Catholic News Service • Posted March 12, 2013

NASHVILLE, Tenn. (CNS) — The Diocese of Nashville and seven other Catholic entities operating in the diocese have withdrawn their appeal of a judge’s dismissal of their lawsuit challenging the constitutionality of the federal government’s mandate to provide health insurance coverage for artificial contraception and other services the church teaches are immoral.

The appeal to the 6th U.S. Circuit Court of Appeals was withdrawn because the federal government Feb. 1 released proposed new rules for the mandate that would widen its exemption for religious organizations, which was one of the goals of the original lawsuit.

The Department of Health and Human Services is accepting public comment on the proposed changes until April 1.

“We will assess the new rules when they are finalized and determine our next course of action,” said Rick Musacchio, spokesman for the diocese. “The U.S. Conference of Catholic Bishops has indicated that in their current form, the newly proposed rules may not resolve all of the objections to the mandates. A new lawsuit remains a possibility.”

The HHS first issued the mandate in August 2011 as part of the health care reform law. It requires employer health plans to provide coverage for abortion-inducing drugs, contraception, sterilization and related education and counseling.

The mandate’s original exemption was narrowly drawn, applying only to those religious institutions that sought to inculcate their religious values and primarily employed and served people of their own faith. It was so narrow it would not apply to Catholic schools, hospitals and social service agencies.

The Nashville Diocese, Catholic Charities of Tennessee, Father Ryan High School, Pope John Paul II High School, Mary Queen of Angels, Villa Maria Manor and St. Mary Villa along with Aquinas College, which is owned and operated by the Dominican Sisters of St. Cecilia, filed suit against it. It was one of nearly 50 lawsuits filed in federal courts across the country to block implementation of the mandate.

In November 2012, U.S. District Judge Todd Campbell dismissed the Nashville suit, ruling it was premature because the rules for the mandate had not been finalized.

The diocese and other plaintiffs appealed the dismissal but decided to withdraw the appeal because the original rules for the mandate are no longer relevant as the government considers changes, Musacchio explained.

The USCCB said the new proposed rules released in February show movement but fall short of addressing the U.S. bishops’ concerns. Cardinal Timothy M. Dolan of New York, president of the USCCB, said the proposed rules seem to “take away something that we had previously — the ability of an exempt employer (such as a diocese) to extend its coverage to the employees of a ministry outside the exemption.”

The cardinal also noted that the government would require all employees of “accommodated” ministries in religious institutions to have access to contraception coverage, noting that they “may not opt out, nor even opt out for their children.”

According to HHS, even in the case of self-insured religious entities — which includes many dioceses and colleges — employees or insured students who want contraceptive coverage will be able to arrange it through outside insurance companies, at no cost to themselves and without financial or even administrative support of the faith-based institution.

Cardinal Dolan said “gaps in the proposed regulations” make it unclear “how directly these separate policies would be funded by objecting ministries, and what precise role those ministries would have in arranging for these separate policies.”

This lack of clarity, he said, provides “the possibility that ministries may yet be forced to fund and facilitate such morally illicit activities” which the bishops would like to see changed in the final rule.

The cardinal also expressed concern that the HHS mandate “creates still a third class, those with no conscience protection at all” such as “employers sponsoring and subsidizing the coverage, insurers writing it, and beneficiaries paying individual premiums for it.”

He said the proposed rule confirms that HHS “has no intention to provide any exemption or accommodation at all” to this group.