A Catholic agency if facing a tough decision straddling law and morals and may have to eliminate drug coverage altogether after the U.S. Supreme Court refused Monday to hear an appeal to a California law requiring employers to include contraceptives as part of the prescription drug benefits plan.

The justices turned down an appeal by Catholic Charities of Sacramento, who argued that it should not be forced to pay for a practice it views as sinful.

"If the state of California can coerce Catholic agencies to pay for contraceptives, it can force them to pay for abortions," attorney Kevin Baine told the justices.

While churches are exempted from the 1999 law due to their mission being primarily religious, Catholic Charities’ do not qualify for an exemption because it offers secular services as counseling, low-income housing and immigration services and employs non-Catholic workers.

Timothy Muscat, California's deputy attorney general, suggested that the agency could stop offering insurance to employees if it wanted to avoid the law.

Kevin Eckery, a spokesman for the Catholic Diocese of Sacramento, which oversees Catholic Charities, said the diocese is exploring other options so that the agency can keep the law and “teachings laid down by the church.”

In March, the California Supreme Court upheld the law, ruling that it didn't interfere with religious beliefs or practices. However,

California Supreme Court Justice Janice Rogers Brown was the only justice who disagreed with the ruling. She stated, “The government is not accidentally or incidentally interfering with religious practice; it is doing so willfully by making a judgment about what is or is not a religion.”

California is one of 22 states which has a law requiring employers that have prescription drug benefit plans to also cover birth control pills. A challenge has also been filed against the law in New York.

American Life League, a Catholic pro-life organization, is urging Cardinal Roger Mahony and all California bishops to keep the Church’s teachings and ensure contraceptive coverage is not provided even if it means canceling drug coverage.

Judie Brown, president of American Life League, said in a statement, “Church leaders must not allow the Supreme Court to force its morality of secular humanism onto the Catholic Church. Unfortunately, it appears that the only option left is for the Catholic employers to drop the employee healthcare benefits altogether.”

Brown added, “The Catechism of the Catholic Church clearly teaches that contraception is ‘intrinsically evil’ and it would therefore be scandalous for a Catholic institution to include coverage for contraceptives in its healthcare benefits. If these institutions truly intend to adhere to Church teaching, they must cease this coverage immediately.”

The case is Catholic Charities of Sacramento vs. California, 03-1618.