By Steve Olafson

OKLAHOMA CITY (Reuters) - Hobby Lobby, an arts and crafts retailer founded by evangelical Christians, sued the Obama administration on Wednesday to stop a mandate under the federal healthcare reform law to provide drugs such as the morning-after pill to employees through their health insurance.

The lawsuit, filed in U.S. District Court in the Western District of Oklahoma, seeks a permanent injunction against the government on behalf of Hobby Lobby and other companies that have religious convictions against abortion.

"These abortion-causing drugs go against our faith," said David Green, founder and chief executive officer of Hobby Lobby Stores Inc, in a call with reporters. "We simply cannot abandon our religious beliefs to comply with this mandate."

The U.S. Justice Department did not respond to a request for comment on the lawsuit on Wednesday.

Hobby Lobby is facing a January 1 deadline to comply with the mandate. Should it refuse, it would face a penalty of up to $1.3 million per day, under the 2010 Patient Protection and Affordable Care Act, a lawyer representing the company said.

The company, which has 13,240 employees in 41 states, is based in Oklahoma City, where it began in 1972. It funds a variety of Christian charities, closes its stores on Sundays and plays inspirational Christian music in its stores.

Hobby Lobby is the largest and only non-Catholic company to sue over the health mandate, according to the Becket Fund for Religious Liberty, a nonprofit, public interest law firm in Washington, D.C., that specializes in church-state law and is helping litigate the case.

"Hobby Lobby should never be put in the position of choosing its faith over its business," said Kyle Duncan, general counsel for the Becket Fund.

The privately owned company, which is self-insured, does not object to providing preventive birth-control coverage to its employees and only objects to drugs such as the morning-after and week-after pill that prevent a fertilized human egg from implantation, Duncan said.

There are 27 other lawsuits pending against the government over the provisions of the healthcare mandate, most of them on behalf of nonprofit organizations that have been granted another year to comply with the law, Duncan said.

In July, a Colorado-based company with 300 employees won a temporary injunction against the government mandate. In the Colorado case, attorneys for the U.S. Justice Department asserted that individual religious beliefs cannot be used by a business to avoid laws that are imposed on the rest of the country.

(Editing by Corrie MacLaggan and Lisa Shumaker; Desking by Xavier Briand)

(This story was refiled to correct the amount of the potential penalty to "up to $1.3 million per day" from "$1.3 million per year" in the fifth paragraph)