The U.S. Supreme Court has sent its strongest signal yet that it's unlikely to allow the federal government to force religious nonprofit organizations to offer prescription contraceptive coverage to their employees.

The high court last week vacated a February 2014 ruling by the 7th U.S. Circuit Court of Appeals in Chicago that denied the University of Notre Dame's bid to be exempted from having to provide cost-free coverage of birth control prescriptions and related services for its employees, as required under the federal health care reform law.

In its one-paragraph summary disposition March 9, the nation's highest court directed the 7th Circuit to reconsider Notre Dame's request for a preliminary injunction barring enforcement of the contraceptive mandate in light of its June 2014 ruling in Sylvia Burwell v. Hobby Lobby Stores Inc. et al. The landmark ruling gave closely held for-profit companies broad protection from the coverage requirement if they object on religious grounds.

“I think the Supreme Court is saying that they think their ruling in Hobby Lobby has an awful lot to say about how the courts should treat these nonprofit organizations,” said Mark Rienzi, senior counsel of the nonprofit Becket Fund for Religious Liberty in Washington. “The lower courts can't just keep going ahead as if nothing changed when they issued the Hobby Lobby ruling.”

Following Hobby Lobby, the Department of Health and Human Services last August finalized two regulatory accommodations for nonprofits that object to providing contraceptive coverage through their health plan. The rules require the nonprofit to notify the agency that it is opting out of providing contraceptive coverage, thereby authorizing its health insurer or third-party administrator to provide the coverage at no cost to the employer.

Attorneys for Notre Dame argue that that the South Bend, Indiana, Roman Catholic college — and other institutions with religious affiliations or deeply held beliefs — should have no direct or indirect role in providing benefits that it finds objectionable on religious grounds, regardless of which entity funds the benefits.

In an emailed statement, a Notre Dame spokesman said the university is “gratified” that the 7th Circuit's ruling was vacated, but also noted that “absent injunctive relief, the objectionable aspects of the third-party insurance coverage remain in force.”

“What Notre Dame was really arguing is that although the HHS accommodation provided that Notre Dame itself did not have to pay for the contraceptives, the plan that it sponsors would still have to provide that coverage,” said James Napoli, a Washington-based partner at Seyfarth Shaw L.L.P. “Their position is that it really doesn't matter who pays for it; it's the employer/employee relationship that provides access to those benefits.”

Although the Supreme Court granted some manner of injunctive relief to religiously affiliated nonprofits in three other cases prior to last week, experts said the decision to vacate the 7th Circuit's previous ruling is especially significant, since it effectively strips the government of precedential language that has been crucial to its defense of the coverage requirement in other federal courts.

More than 50 religiously affiliated colleges, charities and other organizations have argued in federal courts that the notification requirement violates their rights under the U.S. Constitution and the Restoring Freedom of Religion Act by forcing them to still provide access to medications that conflict with their religious beliefs.

So far, religious schools, charities and other institutions have been denied preliminary exemptions from the relaxed coverage requirement in four federal appeals court circuits — the 3rd, 6th, 7th and District of Columbia. Preliminary injunctions barring the government from enforcing the requirement have been granted in the 10th and 11th circuits (see box.)

Most recently, a three-judge panel of the 3rd U.S. Circuit Court of Appeals in Pittsburgh ruled in mid-February against Geneva College in Beaver Falls, Pennsylvania — as well as several Catholic-affiliated organizations in Pittsburgh, Erie and Greensburg, Pennsylvania. The panel ruled unanimously that HHS' relaxed requirements do not violate employers' rights to freedom of expression of their beliefs.

However, in light of the Supreme Court's summary disposition in favor of Notre Dame, experts said the 3rd Circuit's ruling might not stand for long.

“I would expect to see the same result as what we saw in the Notre Dame case if the 3rd Circuit ruling heads up the judicial ladder,” said Royal Oakes, a Los Angeles-based partner at Hinshaw & Culbertson L.L.P. “The Supreme Court doesn't seem to have any appetite for taking one of these cases on for a full review right now.”

While experts agreed that a hearing before the Supreme Court seems likely, it may be a year or more before the underlying legal questions in Notre Dame and Geneva College are ripe for review.

In the meantime, experts said religiously inclined nonprofit employers risk little from a legal perspective by notifying HHS that they intend to opt out of providing contraceptive coverage.

“It seems like a fairly accommodating process,” said Sharon Cohen, a Washington-based principal at Buck Consultants at Xerox. “If you're trying to take a conservative approach and balance between preserving your religious beliefs and incurring the penalty that can be imposed for not complying with the requirement, it's a good approach, but only as long an employer is agreeable to it.”