Because they want to take care of their employees and remain at least somewhat competitive for employees. Hospital administrators, school principals, university deans, etc , Catholic or not, aren't going to work for a company that doesn't provide health benefits. Most people get health care coverage through their employer, who pays the majority of the cost. The employer picks the plan(s) that it wants to offer its employees. Some, like my company, offer a variety of insurers (including self-insurance) to choose from. Others offer one. Period.

The Church could have avoided this by not offering coverage for anyone , which is what some of their hotheads are now threatening to do. But if they do that there will be fines and loss of employees.

Going forward no companies (with the exception of companies selling to direct church employees) will be legally able to provide a plan that excludes bc coverage(with no co-pay). Choice is reduced. The church hospitals, schools, etc will not even be allowed to self-insure and thus avoid the HHS rule. The Church sees itself as backed into a corner-either violate your teachings or turn over serious fines to the government. In future, watch for court cases over this.