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Judge allows NY Archdiocese lawsuit over healthcare law

By Jessica Dye

NEW YORK (Reuters) - The Roman Catholic Archdiocese of New York can proceed with a lawsuit challenging a requirement that employee healthcare plans cover contraceptives, a federal judge ruled Wednesday.

The lawsuit is one of several brought by dozens of Catholic institutions against the contraceptive provisions of President Barack Obama's new healthcare law.

The U.S. Department of Health and Human Services had said the lawsuit was premature and asked the U.S. District Judge Brian Cogan to dismiss it. Cogan denied that motion on Wednesday, saying the archdiocese was already preparing to incur millions of dollars in expenses in connection with the requirement.

Federal courts across the United States are divided on the question of whether it is too soon for religion-affiliated employers and businesses to bring lawsuits challenging the requirement, part of the 2010 Affordable Care Act. It requires private employers offering group health plans to cover preventative services, including contraception, but allows some exemptions for religious employers.

In February, the Health Department announced a "temporary safe harbor" that would stop enforcement of the requirement until August 2013, while it developed regulations to accommodate religious objections.

The finalized rule sparked more than 20 legal challenges, including the one filed in Brooklyn federal court by the New York archdiocese and four other Catholic-affiliated groups. The New York archdiocese, one of the largest in the country, employs more than 10,000 people, and about 9,000 Catholic and non-Catholic employees are covered by its healthcare plan.

The archdiocese argued in court papers that even though it is unclear what its legal obligations will be once the exemption is fully outlined, it expects to incur nearly $200 million each year in penalties if it is forced to comply with the coverage requirement.

The department had argued it is too soon for the Catholic groups to bring legal challenges to the requirement, since it is not yet certain how, or if, it would harm them once the exemption is fully fleshed out. But Cogan said that uncertainty should not preclude groups like the archdiocese from challenging what could prove to be an onerous burden on both their finances and religious freedom rights.

"There is no ‘Trust us, changes are coming' clause in the Constitution," Cogan wrote.

Cogan dismissed claims from two additional plaintiffs -- the Roman Catholic Diocese of Rockville Centre, New York, and the Catholic Charities of the Diocese of Rockville Centre - saying they had not proven they would be affected by the mandate.

A spokeswoman for the U.S. Department of Health and Human Services declined to comment on the pending litigation.

A spokesman for archdiocese said it was "noteworthy" that the judge recognized that it is "facing current and imminent harm from the government's contraception coverage mandate." A spokesman for the Rockville Centre diocese said it was evaluating its options.

The case is Roman Catholic Archdiocese of New York et al v. Sebelius, in the U.S. District Court for the Eastern District of New York, no. 12-2542.

(Reporting by Jessica Dye, editing by Stacey Joyce)

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