There’s been a lot of discussion about the Jesuit-run U of San Francisco’s  student health coverage plan over the past few days.
The Catholic Key blog gives essential background information:

Several blogs and news sites have been reporting on information brought to light on The Catholic Key Blog that the Jesuit-run University of San Francisco includes elective abortion coverage in its mandatory Student Health Insurance Program through Aetna Insurance.
This post is intended to provide some historical context and additional information about USF’s longer-term provision of abortion referrals and insurance.
1. Is abortion coverage mandated in California? No.
In 2000, the California Legislature passed the Women’s Contraceptive Equity Act which required that all health plans which include a prescription drug benefit must also provide contraceptive coverage. The act did not include abortion coverage and it did provide an exemption for religious employers.
Subsequently, in a highly publicized 2004 case, the California Supreme Court required Catholic Charities agencies in California to comply with the WCEA and provide contraceptive coverage to its employees. The court reasoned that Catholic Charities did not qualify for an exemption because it was not a “religious employer”. In adopting a very narrow interpretation of what constituted a religious employer, the Court may have opened the doors to requiring other religious organizations which are not strictly churches to provide contraceptive coverage. The Court’s definition of what constitutes a religious employer may very well exclude the University of San Francisco and other Catholic universities and schools.
To my knowledge that has not been tested, but it is a moot point, because neither the legislature nor the Court require abortion coverage in any private health plan – religious or non-religious.
2. Aren’t these plans standardized? Isn’t abortion coverage automatic? No.
Religious employers in California and elsewhere have followed with keen interest developments in law with regard to mandated benefits. That is because many of them in good conscience do not want to provide certain types of coverage and do not currently provide certain types of coverage.
Insurance providers tailor-fit health plans, within the bounds of local law, to the needs of clients. These needs may be financial or moral. Some employers provide levels of coverage higher or lower than others and some exclude various types of coverage for various reasons.
The Archdiocese of San Francisco, dioceses across the United States and other Catholic institutions do not provide abortion coverage for obvious reasons. Insurance administrators accommodate this.
For instance, Aetna, which provides the Student Health Insurance Plan at USF, also provides the Student Health Insurance Plan at Jesuit-run University of Seattle. At USF, Aetna’s plan specifically includes abortion coverage. At Seattle University, Aetna’s plan specifically excludes abortion coverage.

MORE
UPDATE
According to OSV’s John Norton, the coverage has been dropped.

After being alerted that new student health coverage provides for abortions, the Jesuit-run University of San Francisco has pulled that provision. Here’s a statement we just received from Gary McDonald, the associate vice president for communications and public affairs of the University of San Francisco:
A new health plan for students at the University of San Francisco included a provision for the voluntary termination of pregnancy. It was not the University’s intention to offer this coverage. USF supports the Catholic Church’s views on the sanctity of life, at all stages, and we will remove this provision from our student healthplan. We regret this mistake, and we take full responsibility for not adequately reviewing the contract. We are grateful to those who brought this issue to our attention.
Gary McDonald
AVP, Communications and Public Affairs
University of San Francisco

More, including questions about employee coverage, at the Catholic Key blog.