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The state of California sent letters to insurance companies Friday telling them that they cannot go along with the plans of two Roman Catholic colleges to drop abortion coverage from their health insurance plans for employees.

The move (which could face legal challenges) could block Loyola Marymount University and Santa Clara University from carrying out their plans to end the coverage. Both institutions previously offered the coverage, but announced plans to stop doing so. The universities said that they were trying to adhere to Catholic teachings, but faculty members at both Loyola Marymount and Santa Clara -- many of whom are not Catholic -- opposed the shifts. Nonetheless, the universities held firm.

Friday's letters came from Michelle Rouillard, director of the California Department of Managed Health Care. She wrote that under a 1975 California law, as well as various regulations, it is illegal for insurance policies in the state to discriminate against women who seek abortions. "[A]ll health plans must treat maternity services and legal abortion neutrally," the letter said.

Santa Clara issued this statement about the latest developments: "Given the information provided in the letters, Santa Clara University has reached out to its insurers. We will confer with them to ensure that our health plans continue to be fully compliant with state and federal law."

Loyola Marymount did not respond to a request for comment, but California publications reported that it too was consulting with its insurance providers.

The ACLU of Northern California praised state officials for intervening in the case. "The Department of Managed Health Care deserves applause because in protecting abortion access, it conveys simple truths that have become obscured in the political effort to stigmatize abortion: childbearing is a personal decision, abortion is basic health care, and control of reproduction is critical to women’s autonomy," said a statement from the group.

The statement also noted that Loyola Marymount and Santa Clara were large employers that "receive public funds and employ people of different faiths."

But three groups opposed to abortion -- the Alliance Defending Freedom, the Cardinal Newman Society and the Life Legal Defense Foundation -- released a joint letter they sent to the California Department of Managed Health Care, saying that its actions last week violated federal law. The three groups' letter noted appropriations bills that have barred federal funds from going to states or state agencies that have policies that discriminate against groups that do not want insurance to cover abortions.

The letter said that if the California agency does not reverse its positions, these groups will take action to seek enforcement of the federal provisions that the groups say makes the California action illegal.

Debate Over Federal Rules and Religious Colleges

The California dispute comes as some religious colleges have challenged rules issued by the Obama administration that require employers to provide health insurance that includes contraceptive coverage. Wheaton College in Illinois won a reprieve from the U.S. Supreme Court on the issue in July, although the court's order suggested that the Obama administration could come up with ways -- not directly involving the college's funds -- to provide contraceptive coverage to the college's employees.

The Department of Health and Human Services issued new rules Friday in which religious colleges would be required only to notify the government of their objections to providing contraceptive coverage. The government would then work with insurance providers to provide contraceptive coverage to the employees of these colleges.

It is unclear whether the new rules will satisfy the religious colleges that have objected to previous rules. The Becket Fund for Religious Liberty, a group that has been helping the religious college, said in a statement that it was studying the rules.

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