The "free exercise" of business
If a religious entity wants to run a hospital that's fine. Every aspect of running a hospital is, however, not considered free exercise of religion.
If it were then a religiously affiliated hospital could have surgeons who don't wash their hands. It could feed the patients lye. It could award transplants based on donations to the church. It could do pretty much anything.
And if it said, "Our religion just doesn't believe in germs" then it would not be allowed to operate as a hospital.
And if a hospital offers employee health benefits then they are whatever the minimum benefits are for a typical employer, not the minimum benefits for a church, because hospitals are regulated as hospitals.
I once had a brush with "the war on religion." I was treated at a hospital associated with the 7th Day Adventist church. Adventists are the longest lived American religious group because they do not eat meat and avoid all stimulants. Adventist hospitals went through some regulatory battles before allowing caffiene on the premises and serving patients meat. So they ended up offering meat on the menu, but constantly trying to trick patients into ordering fake meat... you had to read carefully. And I had to bring my own black pepper. (considered a stimulant!)
Now, when ever Adventist hospitals started serving meat this was something they opposed on religious grounds and also on medical grounds, but it happened. And there was no national camprifre cry-out about the jackbooted thugs forcing Adventist hospitals to handle and cook dead flesh, which they really do abhor as much as anyone could sensibly abhor paying for a protestant employee's contraceptives(!)
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