WASHINGTON -- North Carolina’s Belmont Abbey College can keep on challenging the Obama administration’s signature health care law under an appellate court ruling that leaves the challenge on hold.

In a decision closely watched by many other religious schools and institutions, the U.S. Court of Appeals for the District of Columbia Circuit has ruled that the legal challenge by Belmont Abbey and Illinois’ Wheaton College may remain “in abeyance” while the administration revises rules for a contraception coverage mandate. Pointedly, the court also set firm deadlines for administration officials to make the revisions protecting those with religious objections..

The ruling is a compromise victory for the schools and a definite defeat for the administration, which wanted the religious liberty lawsuit dismissed outright.

“This is a win not just for Belmont Abbey and Wheaton, but for all religious nonprofits challenging the mandate,” attorney Kyle Duncan, general counsel for the Becket Fund for Religious Liberty, declared in a statement.

A Roman Catholic college about 15 miles west of Charlotte that was founded by Benedictine monks, Belmont Abbey has filed one of 41 lawsuits nationwide challenging a provision of the Patient Protection and Affordable Care Act that sets insurance coverage standards. The provision requires employers’ health insurance plans to cover certain medical procedures, including contraceptive services such as sterilization and emergency oral contraception.

The schools, as well as some employers that are challenging the law, contend that the contraception coverage mandate runs counter to First Amendment freedom-of-religion protections.

The Obama administration has countered that the lawsuits are premature, because officials are revising the regulations to provide more exemptions. A trial judge agreed in September and dismissed the Wheaton and Belmont Abbey cases.

The three-page appellate court ruling, quietly issued Tuesday, orders the administration to report every 60 days on its progress in revising the contraception mandate rules to provide religious exemptions. In stern language, the appellate court also said it took as a “binding commitment” Justice Department assertions last week that a proposed new rule will be ready before April and a final rule will be finished by August.

“We take the government at its word, and will hold it to it,” the three-judge panel wrote in an unsigned, unanimous opinion.

The Washington-based appellate court sometimes is called the nation’s second-highest court, because it oversees many federal agency actions. Underscoring the current stakes, the 65-minute oral argument Friday was significantly longer than usual, and it took place before an unusually crowded courtroom.

The Becket Fund for Religious Liberty filed the Belmont Abbey and Wheaton lawsuits pro bono. The fund also has filed other lawsuits challenging the law.

Enforcement of the contraception-coverage mandate, which might include fines, won’t start until January 2014. The administration has offered a “safe harbor” shielding organizations from punishment until then.