Religious institutions are not required to provide contraception insurance to employees under the mandate, but for-profit companies are required to do so, despite the religious convictions of their owners.
The for-profit companies are Hobby Lobby, a craft store chain, and Mardel, a Christian bookstore chain, both headquartered in Oklahoma City.
The full appeals court heard the case in May and issued its ruling Thursday.
"Their owners, the [Green family], run both companies as closely held family businesses and operate them according to a set of Christian principles," the opinion from the U.S. Court of Appeals for the 10th Circuit said. "They contend regulations implementing the 2010 Patient Protection and Affordable Care Act force them to violate their sincerely held religious beliefs. In particular, the plaintiffs brought an action challenging a regulation that requires them, beginning July 1, 2013, to provide certain contraceptive services as a part of their employer-sponsored healthcare plan."
Among the services "are drugs and devices that the plaintiffs believe to be abortifacients, the use of which is contrary to their faith," the opinion said.
"We hold that Hobby Lobby and Mardel are entitled to bring claims under [the federal Religious Freedom Restoration Act], have established a likelihood of success that their rights under this statute are substantially burdened by the contraceptive-coverage requirement, and have established an irreparable harm," the appeals court said.
A five-judge majority agreed the businesses were likely to win on the merits, though the judges agreed or disagreed with bits and pieces of the opinion.
The appeals court sent the case back to a federal judge to resolve remaining issues "governing the grant or denial of a preliminary injunction" against the mandate. The federal judge initially had rejected the companies' request for an injunction.
The U.S. Supreme Court in December refused to issue the Greens an emergency stay of the mandate, with Justice Sonia Sotomayor saying the stores don't meet extremely high standards required for an emergency injunction, but "may continue their challenge to the regulations in the lower courts."
"Following a final judgment, they may, if necessary, file a petition" for the Supreme Court to hear the case, she said.
The American Civil Liberties Union, which filed a brief on behalf of the mandate, said the Greens' "case is one of more than 60 across the country addressing the rule mandating contraception coverage. Today's decision is the first issued by a circuit court in one of these cases."