Dozens of the church's largest archdioceses, universities and other affiliated groups sued the Obama administration this week, in one of the largest religious lawsuits in US history. They argue that the government is violating the religious freedom of bosses whose faith forbids them from using or approving of birth control.
Firms who do not comply with the law face large fines. Cardinal Timothy Dolan of New York, the president of the US Conference of Catholic Bishops, accused Mr Obama of "strangling" the church with his healthcare policies.
"We have tried negotiation with the administration and legislation with the Congress, and we'll keep at it, but there's still no fix," said Cardinal Dolan. "Time is running out, and our valuable ministries and fundamental rights hang in the balance, so we have to resort to the courts."
Under rules introduced as part of Mr Obama's overhaul of the US healthcare system last year, employers must offer contraceptive coverage as part of their employees' health insurance packages.
The rule aimed to improve the health of mothers and children by helping women to space out pregnancies. While churches were originally free to opt out of the mandate, it was still initially forced on religiously affiliated charities, schools and other organisations.
Amid Catholic uproar earlier this year, Mr Obama announced a climbdown, allowing affiliated organisations to opt out as well. However, activists complain the amendments are too restrictive.
To be exempt, groups must "propagate your Catholic faith in everything you do, you can serve only Catholics and employ only Catholics," Cardinal Dolan told CBS television network yesterday.
"When did the government get in the business of defining for us the extent of our ministry?"
Mr Obama's amendment also requires that insurance companies provide contraception where bosses will not, prompting complaints that firms will end up paying anyway via increased premiums.
Spokesmen for Mr Obama's health and human services department declined to comment yesterday on pending litigation. (© Daily Telegraph, London)