(Bloomberg) — The Obama administration’s revised rules on insurance coverage for birth control designed to dispel concerns of religious groups haven’t appeased critics who say the policy violates employers’ rights.

Insurers who provide coverage for religious nonprofits, or companies that administer the benefits, will provide contraceptive coverage without cost to the organization or its workers should the group object on religious grounds, the government said last week.

The rules provide a broad exemption for nonprofit organizations — but not for-profit companies — from a requirement in the Patient Protection and Affordable Care Act that health plans cover birth control without cost to their workers. Sen. Orrin Hatch (R-Utah) says the requirement violates a 1993 law on religious freedom because for-profit companies don’t get the exemption under the compromise announced Friday.

“Freedom of religion and the right of peoples of faith to be protected against government intrusion must be sacrosanct,” Hatch says. “Unfortunately, this White House doesn’t seem to believe in that constitutional guarantee — forcing private companies to provide health care services in violation of their beliefs.”

Fourteen for-profit firms have sued the government over the mandate; 10 have won an injunction against complying, according to the Becket Fund for Religious Liberty, a legal group fighting the requirement.

PPACA requires insurers and employers who provide health coverage to their workers to pay for government-recommended preventive services without copayments. In August 2011, the Obama administration said those services would include contraception such as birth control pills, implants and sterilization procedures. The decision was backed by a recommendation from the Institute of Medicine, nonpartisan scientific advisers to the government.

Religious organizations opposed to birth control demanded an exception to the requirement. The Obama administration initially provided a one-year delay until this August to allow the groups to comply, while promising further compromise.

“The administration is taking the next step in providing women across the nation with coverage of recommended preventive care at no cost, while respecting religious concerns,” says Health and Human Services Secretary Kathleen Sebelius.

The issue has drawn enormous scrutiny. About 200,000 people and organizations sent formal comments on preliminary rules outlining a compromise the administration issued in March 2012.

The government said the rules announced last week would broaden the types of organizations eligible for an exemption from the birth-control mandate and make it easier for them to escape it. Nonprofits that object to the requirement need only lodge a protest with the health insurer that covers their workers, or the company that administers their health benefits if they are self-insured.

The rule “would limit any accommodation to nonprofit organizations that hold themselves out as religious,” the administration says, a definition that may include church-affiliated hospitals and universities that weren’t previously exempt.

It’s unclear how the new rules affect 30 lawsuits filed against the government by nonprofits, says Kyle Duncan, general counsel for the Becket Fund.

The owners of for-profit companies that have sued object to covering certain types of birth control such as Teva Pharmaceutical Industries Ltd.’s morning-after pill, Plan B One- Step.

“Today’s proposed rule does nothing to protect the religious liberty of millions of Americans,” Duncan says.

Groups that advocate for civil liberties and abortion rights, including the Planned Parenthood Federation of America and the American Civil Liberties Union, have argued that employers shouldn’t be able to decide whether Americans have insurance coverage for birth control. They applauded the government’s proposal.

“Over the last year, we’ve seen a disturbing number of instances where employers are trying to impose their religious beliefs on a diverse workforce that does not share them, and opponents of the law have made it clear that they won’t rest until no insurance plan, whatever the source, is required to cover contraception,” says Sarah Lipton-Lubet, policy counsel for the American Civil Liberties Union, in a statement.

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