According to the Insurance Commissioner's office, the Hobby Lobby decision leaves the state unable to enforce its mandate, if there's religious objection.
Wisconsin has required employers providing insurance for their workers, to cover contraception and exams related to birth control.
However, agency spokesman J.P. Wieske says the state must now abide by a recent U.S. Supreme Court ruling. The high court decided that closely held companies, such as family-run Hobby Lobby, don't have to cover contraception services, if the owners object to them on religious grounds. The issue arose, because of a mandate in the Affordable Care Act.
Wisconsin Democrats are blasting the Walker administration's decision, calling it an attack on women's access to health care.
Opponents of the mandate insist the government cannot force people to violate their religious beliefs.