Utah's public employees will no longer be able to swap out saved sick leave for post-retirement health benefits, according to a ruling issued Thursday by the Utah Supreme Court.

The high court ruled although the state did indeed have a contractual commitment with its employees, the benefit program can be yanked because it can only be claimed at the time of retirement.

While the decision has members of the Utah Public Employees Association (UPEA) shaking their heads in dismay, lawmakers up at the Utah Legislature are breathing a sigh of relief, knowing the sick-day-swap program could have cost the state millions of dollars.

For months UPEA has been locked in a legal battle with the state over the implementation of HB213, which changed the way unused sick leave days would be handled when an employee retired.

It was to have gone into effect Jan. 1 but was put on hold by the Utah Supreme Court pending the outcome of UPEA's suit challenging HB213.

"We are disappointed," said Ben Hathaway, attorney for UPEA. "We put up a good fight, but we recognize the ultimate defeat, and we will accede to the decision of the Supreme Court."

Although UPEA representatives respect the Supreme Court ruling, they are critical of a state Legislature that they say changed the rules in the middle of the game.

"The state has said its most valuable asset is its employees," Hathaway said. "This type of legislation has the unfortunate effect of communicating to people that they aren't that valuable at all."

HB213 will phase out over a five-year period the ability of state workers to exchange eight hours saved sick leave for one month's worth of post-retirement health care. UPEA members claim numerous state employees banked hundreds of hours of sick leave with the understanding they would be able to redeem the hours for state-paid insurance when they retired. With that understanding, UPEA insists the state benefited by having employees at work more often.

But state legislators feared that ever-increasing health insurance costs and future retirements would drain state coffers.

Rep. Dave Clark, R-Santa Clara, the sponsor of HB213, announced the high court's ruling from the House floor Thursday morning.

Later, Clark said that he is genuinely sorry about any adverse impacts of HB213 on loyal state employees. But he reiterated his belief that for the fiscal health of the state, it was the only option.

Pensions and reduced health care coverage will still be given to retired workers, Clark stressed.

"We will keep the (retirement fund) financially solid," and all financial promises will be fulfilled to retired workers, Clark said.