The HHS mandate and the Catholic Health Association: Do Catholics want special treatment?
Much hay has been made over the Catholic Health Association's "reversal"  on the Obama administration's revisions to the original mandate requiring most employers, including some religiously affilitated universities, hospitals, and social service agencies, to provide sterilization and contraception without copay as part of an employee benefits plan. Sarah Posner at Religion Dispatches  says it doesn't matter, Grant Gallicho argues  that CHA is offering the administration another course of action, namely to drop the current definition of exempt religious employer to one that "shares common religious bonds and convictions with a church." (Sister Carol explained the CHA position to Kaiser Health News .)
I think Posner has the right of it on legal grounds; after Employment Division v. Smith, the mandate meets constitutional muster. Like all the rights enumerated in the First Amendment, there are limits to the civil right to religious freedom. (Anyone who wants to really understand the legal ins and outs should read Commonweal's excellent series on this question .)
At the same time, I still think the bishops (and now the CHA) are treading a slippery path. Seeking exemption from a generally applicable law for one religion on the grounds of religious liberty would seem to me to open the door to others. An obvious health care analogy is the Seventh Day Adventists, who object to blood transfusions (CORRECTION: evidently not true, possible confusion with Jehovah's Witnesses BC); another is the objection of some Christian Scientists to any medical care whatever, including in cases of severely ill children.
One purpose of the civil law is to protect vulnerable people, and I would support, for example, intervention in the case of a seriously ill child being denied care for religious reasons. I'll grant that the bishops and CHA are arguing for some kind of institutional religious liberty, but I don't see how the government can grant one set of rights to religious institutions and not to their members.
Pulling the lens back: What about family law? Some Mormons practice polygamy for religious reasons. In some countries with large Muslim populations, family law is adjucated by religious rather than civil courts. What if a city with a large Muslim community petitioned to be exempt from civil family law for relgious reasons? By the legal logic of the bishops, I see no reason why they should not be granted it. Why should "big government" dictate how people marry and raise children, since so much of that dimension of human life is tied up with religion?
These analogies are imperfect, of course, but I'm not entirely sure the bishops' current argument is the best way to go. Life in a pluralistic society requires certain moral compromises, such as letting one's own employees decide if they wish to use contraception with their own money (and their benefits are their own money every bit as much as their salary is). It is a compromise that has worked in every Catholic country with universal health care--where the same indirect cooperation with evil applies. I think it could work here.