However, a diocesan spokesman said employees will be warned against using the benefit and that open defiance of Catholic teaching on the issue could ultimately lead to termination.
St. Mary's Hospital in Madison has notified employees that it, too, soon will be required for the first time to cover contraception.
Both entities sought to get around the mandate by becoming self-insured, but the costs proved prohibitive.
The law, which took effect Jan. 1, requires all commercial insurance policies with a drug benefit to cover prescription contraceptives. Self-insured policies are exempt.
The law allowed employers to honor their current insurance contracts until they expire, which is why the diocese had until Aug. 1 to make a decision. Officials decided a self-insured plan wasn't financially feasible, said Brent King, a diocesan spokesman.
The diocese's commercial insurance policy now will offer birth-control coverage, but employees will be expected to employ their consciences in not using it, King said. "If someone were to misuse that freedom in this regard, it could be grounds for termination," he said.
Such a step would be taken only if the employee, after being counseled, refused to get in line with Catholic teaching, King said. "It wouldn't be the first thing we do," he said.
The Catholic Church teaches that contraception is immoral because it diminishes God's role as the giver of life and interferes with the full giving of each spouse to the other.
All diocesan employees sign a morals clause in their job offers saying they will abide by Catholic teaching, so the diocese expects them to follow the prohibition against prescription contraception, King said. He acknowledged that the diocese has no way to police the issue - an employee would have to offer it up, he said.
St. Mary's Hospital, a Catholic-based institution, became self-insured eight months ago to avoid the law. But in a July 27 memo to employees, President Frank Byrne said the switch is proving too costly. Also, many hospital employees are having problems accessing specialty medical care, he said.
Beginning Jan. 1, St. Mary's will return to commercial policies provided by Dean Health Plan and Group Health Cooperative, said Steve Van Dinter, a hospital spokesman. Hospital employees do not sign moral clauses, he said.
Byrne said the hospital will work toward getting a religious exemption inserted into the law.
Chris Taylor, public policy director for Planned Parenthood of Wisconsin, said she is pleased with the turn of events but disappointed that institutions would spend energy trying to thwart the law.
"Birth control is basic health care that 95 percent of women use at some point," she said. "I would hope that we don't have entities - Catholic or otherwise - trying to erect obstacles to health care for their employees."
SIC: WSJ