The first amendment to the US Constitution, which happens to be the "highest law of the land," includes the protection from laws that prohibit the free exercise of religion.  Free exercise of religion should include conscience protections.  Religiously-affiliated organizations should not be forced to compromise the moral and religious beliefs held by those organizations when acting.  Many of the individuals who work for those organizations do so because they are personally-affiliated with those religions and wish to assist those religious organizations as part of their faith.  What about their right to free exercise of religion?  Being forced to act against one's beliefs is not religious freedom.  Who is standing up for their rights?

Let's be honest.  Regulations such as this one are aimed at the services provided by more religiously conservative organizations such as the Catholic Church and the Church of Latter Day Saints by a small, but vocal, gay rights advocacy.  However, issues of "rights" rarely occur in a vacuum.  This issue is not just about "gay rights."  It is about "religious rights" vs. "gay rights."  Which should prevail?  When I read the Constitution as a mere citizen, I see an explicit "free exercise" clause for religion but I do not see such an explicit clause for gay rights.