The United States Conference of Catholic Bishops, which sets official Catholic healthcare policy in the U.S., says it has no choice but to sue the federal government if Congress fails to rescind a rule that forces insurers for religious employers to offer contraception coverage.

The Washington-based bishops' conference submitted a 21-page letter this week (PDF) in response to a call for public comments on a revised HHS policy that calls for commercial health plans to offer contraception services free of charge as part of a requirement to provide preventive health services in the Patient Protection and Affordable Care Act.

The bishops warned that Roman Catholic institutions in the U.S. faced a decision of whether to forgo offering coverage altogether rather than comply with a rule that contradicts the church's teaching on birth control, surgical sterilizations and drugs that terminate pregnancy.

And one Catholic university promptly did just that. Franciscan University of Steubenville in Ohio has announced that it is no longer offering healthcare coverage to students and will no longer require undergraduates to carry insurance, in response to the Obama administration's rules requiring coverage of contraception.

“Up to this time, Franciscan University has specifically excluded these services and products from its student health insurance policy, and we will not participate in a plan that requires us to violate the consistent teachings of the Catholic Church on the sacredness of human life,” the university said in the statement.

Initially, HHS officials proposed requiring all commercially insured employers, including religious organizations, to provide employees with such coverage, but in February HHS Administrator Kathleen Sebelius announced what was billed as a compromise that would force insurers, not the employers themselves, to offer the coverage.

The rule includes an exemption for religious employers, but critics say it was crafted to apply only to churches, and not religious hospitals, universities or other large employers with diverse workforces.

The bishops responded this week in the form of public comment to a notice of proposed rulemaking by several federal agencies, saying that the compromise rule did not address their concerns that the policy lacks an adequate exemption for religious employers.

“Absent prompt congressional attention to this infringement on fundamental civil liberties, we believe the only remaining recourse, in light of the approaching regulatory deadlines, is in the courts,” states the letter, submitted by USCCB Associate General Secretary and General Counsel Anthony Picarello Jr. and Associate General Counsel Michael Moses.