Local human rights advocates Friday applauded Circle K Corporation's decision to suspend implementation of a controversial health-benefits program that denies coverage to employees with ailments related to drugs, alcohol or AIDS.

"A general misunderstanding of the policy has arisen and that needs to be clarified," said Karl Eller, Circle K chairman and chief executive officer. The executive, who noted that health care costs have almost doubled over the past two years, added, "We were and still are extremely concerned about containing costs of medical insurance for employees."The policy on medical benefits, which affects 26,000 Circle K employees in 26 states - including about 312 employees in Utah's 58 stores - has garnered considerable public attention over the past two weeks. However, company officials said the plan has been in effect since January.

Under the plan, employees who are proven to suffer illnesses and accidents that result from the use of alcohol, drugs, self-inflicted wounds and AIDS, weren't eligible to receive company health care coverage in those circumstances.

The exception was those persons who contacted acquired immune deficiency syndrome through a blood transfusion. They were covered.

"We're pleased to see that Circle K is looking to change the policies that were blatantly discriminatory," said Ben Barr, director of the Salt Lake AIDS Foundation.

"I also think people around the country who protested and called Circle K should be proud of themselves. It's nice to know that the process works."

Local organizations providing services to AIDS patients, outraged by the insurance policy, were considering protesting Circle K stores, the director said.

"They (company executives) seemed to be very naive. It's surprising," Barr said. "They seemed almost proud of their policy - like there were no problems with it. It's good people helped educate them."

An official of the American Civil Liberties Union of Utah also hailed Circle K's decision.

Calling the policy "discriminatory," Robyn E. Blumner, ACLU executive director, said, "There was no rational basis for selecting out those particular behaviors as uninsurable. It would be the same as refusing to insure parents who choose to be around their children when they are sick, or people who smoke or people with poor dietary habits.

"We are certainly gratified that reason prevailed, and they decided to give this policy a closer look," Blumner said.

It was after meeting with human rights advocates that Circle K officials announced Wednesday their decision to suspend implementation of the KareChoice health care plan.

Eller said Thursday that the company's review of the policy would "focus on clarification of language and of some conditional exclusions." The review should be completed by the end of the month, he added.

Opponents point to two primary problems with the policy: One is that the employee doesn't know whether he is covered in any given instance. The second is that it creates an administrative nightmare for the company in deciding on a case-by-case basis what claims it will pay for.

The policy particularly raised the ire in Utah of AIDS patients, whose numbers are increasing.

Twelve new cases of AIDS were reported in Utah during June and July, bringing the total number of victims to 140. Eighty-eight have died.

Nationwide, the number of AIDS cases grew from 63,726 as of May 30 to 69,085 as of Aug. 5, an increase of 5,359 for the two-month period. In all, 38,897 people have died from the disease, which is spread primarily through sexual contact or contaminated blood.

According to the Utah Department of Health, 107 of the state's AIDS victims have been homosexual or bisexual males or intravenous drug users. There has been one reported case of AIDS contracted by a heterosexual in the state.

Blood transfusions account for the remaining Utah AIDS cases, with the exception of two children who contracted the disease from an infected mother, a health department spokesman said.