The legislation, already approved by the Republican-controlled House, was passed Monday by the Senate Judiciary Committee on a 6-2 vote and now goes to the full Senate.
HB2625 would repeal a decade-old mandate that employer health insurance coverage must also include contraceptives.
"I believe that we live in America," Rep. Debbie Lesko, a Republican, told the ArizonaDailySun.com. "We don't live in the Soviet Union. And so government shouldn't be telling employers, Catholic organizations or mom-and-pop employers to do something that's against their moral beliefs."
The legislation makes an exception for contraceptives prescribed for some purpose other than preventing pregnancy.
For example, a woman who wanted to prevent pregnancy would not be allowed health insurance coverage for oral contraceptives or a tubal ligation, a surgical procedure in which a woman's fallopian tubes are blocked, tied, or cut to permanently prevent pregnancy.
However, the bill does provide that a woman with endometriosis, which causes pain, irregular bleeding and infertility, could be treated using oral contraceptives, but she would have to first submit a claim to her employer providing evidence of the medical condition. If the employer decided to cover the oral contraceptive for medical reasons and not pregnancy prevention, the woman would be charged an administrative fee.