So says CNN, which hears from two different sources that an opt-out will be created for “religiously affiliated organizations.”  While that may be good news for hospitals, charities, and schools linked to churches, it may not address the objections of private business owners:

Religiously affiliated organizations will be able to opt out of providing their employees with insurance coverage for contraceptives under updates to an Obama administration mandate that the Department of Health and Human Services is expected to unveil on Friday, according to two sources.

In March, after an uproar among religious institutions that didn’t want to pay for contraceptives, the Obama administration offered several policy suggestions that would require the administrator of the insurance policy, not the religious institution or the insurer, to pay for contraception coverage and invited comment on those proposals.

The administration is expected to detail how it will handle two of the more controversial situations, said a source familiar with Friday’s announcement.

“Religiously affiliated organizations will be given the option of exempting themselves from the requirement of providing their employees with contraceptive access or service that they are morally opposed to,” said the source.

Surprised?  Don’t be.  The Obama administration is under court order to produce a new version of the HHS mandate, thanks to a federal court that essentially forced their attorneys to admit that HHS wouldn’t enforce the version that the White House has pushed for the last ten months.  That’s the so-called “accommodation” that asked everyone to pretend that funds used to provide contraception had no relation to the premiums paid by the employer. That wasn’t going to fly, and everyone knew it, including the White House months ago.

Today, the Obama administration will make that part of the retreat official.  What’s puzzling is why they waited a year to recognize that the courts would not allow the executive branch to limit the definition of “religion … or free exercise thereof” explicitly recognized in the First Amendment.  They could have saved themselves a lot of trouble and some significant damage with Catholics especially had they simply included all religious-affiliated organizations in the exemption from the beginning.  The number of employees impacted will be relatively small anyway, which makes it a very weird hill on which to choose to fight.  The rewritten rule will have the belated benefit of getting the Catholic bishops off of Barack Obama’s back, at least for the most part.

Or … perhaps not:

Another issue expected to be dealt with Friday in the policy announcement is how a religious organization is defined.

If it’s not a broad and inclusive definition, expect the court at the above link to be less than satisfied.

However, that still leaves private businesses such as Hobby Lobby on the hook for compliance — at least for now.  So far, federal courts have vacillated on whether religious beliefs of private owners are allowed to be expressed in business policies in this manner.  Some have lost, some have won, and some (like Hobby Lobby) have been told to wait until the regulations come into full force.  Their fight will continue in the courts, unless the announcement today is even broader than first thought.