Why one Catholic university chose no care over 'ObamaCare' for its students

This is a rush transcript from "On the Record," May 16, 2012. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Is student health care falling victim to ObamaCare? A Catholic university in Ohio says yes. The university is dropping students from its health care program and blames ObamaCare. Michael Hernon is vice president of advancement at Franciscan University and he joins us. Good evening, sir.

MICHAEL HERNON, V.P. OF ADVANCEMENT FOR FRANCISCAN UNIVERSITY: Good evening, Greta. It's great to be with you.

VAN SUSTEREN: Nice to have you, sir. So you are eliminating health care for students. Why?

HERNON: Yes. It is actually a very troubling decision that we had to come to. Franciscan University is very passionate about our Catholic identity. As soon as the ObamaCare HHS mandate came out this past summer saying we had to cover things like drug inducing -- or abortion-inducing drugs and contraceptives, we knew we were going to have some problems and we could not comply with that law. But then just recently we found out from our health care provider for our students that the cost would be doubled to our students. We find bot the moral and the economic to be completely incompatible with what we are trying to do at a Catholic university.

VAN SUSTEREN: With the question of the Catholic identity, why is that not a reason for to you likewise take the employees off the health care? Why only students for that portion of your motivation?

HERNON: Yes. We are going to be fighting, as we started in the summer, or early fall, fighting for religious liberty, and we'll continue to do so. For our employees the direct impact economically doesn't hit us as of today. But it does impact our students. We require our students to have this and we think it's a very reasonable thing to offer affordable, basic health care for students. But now it's both the moral and the economic hitting us today. We have another year that we're hoping to battle and win on religious liberty, but the economic issue hits the student plan today.

VAN SUSTEREN: What is the reaction from the student body and their parents?

HERNON: We sent this out in actually mid-April to the parents and students, and every response that we have gotten is positive. Since the story broke in the last 24 hours, I've gotten a lot of alumni and benefactors of the university saying, way to go, have courage, stand up for your principles. So far there's plenty of people who are concerned, saying what is going to happen to these students? And we are concerned as well. We have a health clinic --

VAN SUSTEREN: Let me ask you this. If it's stand up for the principles, and correct me if I'm wrong, the principles would go to the Catholic identity issue and the drugs and the contraception. But you are not doing that as to the employees. It seems to be an economic argument for the students at least in the short term, that that's the more weighted decision?

HERNON: It is the trigger that forced it. Probably, if it was just the economic alone, it might not do it. But we know if something doesn't change between now and then for our student health coverage plan, we would not be able to comply in the near future based on Obamacare's HHS mandate. And so when you combine them together, it really changes the entire conversation for us. And our students have been out there in front, really saying we cannot comply. Our president said, this is something we will die on this hill. We cannot let religious liberty stop us.

VAN SUSTEREN: What's the cost difference?

HERNON: Yes. Our students are paying $600 for their health plan, and this would be $1,300 in the first year. But then it could be upwards of three times as much in the second year and they can't estimate the third year.

VAN SUSTEREN: Any idea, does the university pick up a companion cost, or is this solely the $600 versus $1,300, that's the complete cost and the student bears it?

HERNON: That's what the student bears. And in these tough economy times -- we are not compelled by any law to offer this. We thought it was a good and advisable thing. They are covered by their parents' plan or they pick up this extra plan.

VAN SUSTEREN: Does this cost you at all? If the students are picking up the $600 to the $1,300 does it cost the university at all to have this program?

HERNON: It's 100 percent what we see as a burden on the students directly. What we have done, like many colleges, we actually required health care coverage. We have said we are no longer requiring you to have health coverage to come to Franciscan University.

VAN SUSTEREN: That's the difference. Before they had to buy it. So I understand it.


VAN SUSTEREN: Michael, thank you. I'm sorry, sir?

HERNON: No, I just think that, you know, we have heard that there is another university considering this. This is a major issue. And, you know, our First Amendment freedoms affects not just Catholics, but really all Americans. This is something that I really think we need to continue to battle with today. We can't let this kind of go down and not be really aggressive and out there and letting our voices be heard. I really appreciate your time on the show today. But this is an issue that is bigger than Catholics.

VAN SUSTEREN: Michael, thank you.

HERNON: Great. Thanks, Greta.