A federal district court in New York denied the Obama administration’s request to dismiss a challenge to the contraception mandate filed by a group of Catholic organizations.

The Roman Catholic Archdiocese of New York and two other Catholic entities challenged the law, arguing that providing their employees with a health insurance plan that makes contraception available without a co-pay violates their rights to free exercise of religion. The Obama administration argued the plaintiffs couldn’t challenge the insurance requirement at this time since the mandate, which doesn’t take effect until January 2014, isn’t causing the archdiocese any imminent injury. Furthermore, the administration argued, an additional compromise  and the administration to address concerns of religious organizations is in the works.

But U.S. District Judge Brian Cogan disagreed, ruling the archdiocese “demonstrated how the enormous changes to their plans required by the coverage mandate currently exacerbate their preparation costs.” That showing, the court found, was sufficient to demonstrate “imminent” harm because it was causing them to “divert funds from their ministries.”

The archdiocese includes 370 parishes and insures approximately 9,000 people and currently operates a self-insured health plan that bars contraception coverage except for other, medically necessary purposes.

The ruling didn’t address the merits of the archdiocese claims, but simply allows the plaintiffs to move beyond initial allegations and forward with their challenge.

The case is Roman Catholic Archdiocese of New York v. Sebelius, 12-02542, U.S. District Court, Eastern District of New York (Brooklyn).