Associated Press
Sister Sheila Galligan, a professor at Immaculata University, demonstrates with others against the Obama administration mandate that employers provide workers birth control coverage, at Independence Mall, Friday, June 8, 2012, in Philadelphia. The event was organized by Stand Up For Religious Freedom.

Religious non-profits that have sued the federal government over a mandate to provide insurance coverage for birth control reacted with disappointment Friday to the latest offer by the Obama administration to settle the legal standoff.

The latest accommodation does nothing to address the claims made in some 44 lawsuits brought against the government in the past year by schools, hospitals and private businesses saying the mandate violates their religious freedom, said religious liberty advocates.

"After more than a year of litigation our clients and many others like them were hoping for much, much more," said Kyle Duncan, general counsel for the Becket Fund for Religious Liberty, which represents eight clients suing the government over the mandate. "We are extremely disappointed in seeing this kind of inadequate proposal."

Women's health advocates and liberal religous groups, however, say the measure is responsive to the concerns of faith-based organizations.

Friday's proposed rule is the second attempt by the Obama administration since the Affordable Care Act passed to find middle-ground between faith-based employers that object to contraception coverage on religious grounds and women's health advocates that have lobbied for free contraceptive services under the Affordable Care Act.

“Today, 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,” Health and Human Services Secretary Kathleen Sebelius said in a statement. “We will continue to work with faith-based organizations, women’s organizations, insurers and others to achieve these goals.”

The U.S. Conference of Catholic Bishops, which led opposition to the mandate, reserved reaction until it reviews the proposed new rule. Meanwhile, John Gehring, Catholic program director at Faith in Public Life, a liberal advocacy group based in Washington, called the compromise "a strong signal that the administration is responsive to the concerns of Catholic institutions."

Since the initial mandate was issued in late 2011, religious nonprofits like schools, charities and hospitals have asked for the same exemption granted to houses of worship and religious orders. In response, the administration has twice tweaked the mandate to have a third-party step in to provide coverage, which opponents have blasted as an accounting gimmick.

This latest offer proposes religious nonprofits use insurance plans separate from their own to provide contraceptive coverage without "contracting, arranging, paying, or referring for such coverage." For self-insured nonprofits, a third-party administrator would handle the coverage "at no cost to the religious organization."

The proposal states that any additional cost would be covered by a deduction in federal user fees paid by whoever issues the policy. HHS has not tallied an overall cost of the plan, according to Chiquita Brooks-LaSure, a deputy policy director for the agency.

But the department argued the change wouldn't impose new costs on insurers because it would save them money "from improvements in women's health and fewer child births."

Religious liberty advocates and legal representatives for the faith-based nonprofits are skeptical, however, calling the proposal convoluted, opaque and offering no clear guidance that ensures they won't be involved in providing the mandated artificial contraception, including sterilization, to employees. The coverage also includes so-called morning-after pills that some opponents contend are tantamount to abortion.

"The kinds of concerns that our clients ... will have to consider are whether this accommodation leaves them as conduits for the very drugs their consciences do not allow them to cover," Duncan said. "The better solution is to simply allow them to be exempted from the mandate."

The HHS announcement states the new rule "would not expand the universe of employer plans that would qualify for the exemption beyond that which was intended in the 2012 final rules."

That doesn't give much hope to the combined 130 plaintiffs that have sued the government over the mandate that there will be a settlement anytime soon. The lawsuits filed by the religious nonprofits have been stalled awaiting Friday's announcement. The proposal now goes through a 60-day public comment period before it is finalized and takes effect in August.

The accommodation does nothing for the private businesses that have sued the government, claiming that complying with the mandate violates the owners' right to practice their faith under the federal Religious Freedom Restoration Act. Federal courts are split over whether the mandate violates federal law with 10 judges temporarily blocking enforcement of the mandate, which imposes hefty fines for noncompliance.

Matt Bowman, senior counsel for the Alliance Defense Fund, which is representing several businesses that have won court injunctions against the mandate, said the rulings should signal to the Obama administration that the mandate is illegal.

“The administration must immediately abandon the idea that it has the power to withhold or dispense our fundamental freedoms to whomever it chooses," he said. "The mandate is losing in court. The only acceptable solution is for the administration to obey the Constitution and its legal duty to protect religious freedom.”

Timeline: Birth control controversy

March 23, 2010: Congress passes Affordable Care Act

Aug. 1, 2011: Government issues contraception mandate

Feb. 10, 2012: Obama administration announces it would propose new rule to address religious objections to mandate

Feb. 1, 2013: Obama administration releases new rule on contraception mandate

Contributing: Associated Press