An administrative law judge will decide whether Gov. Terry Branstad's administration broke the law in July when he allowed state employees the option of paying 20 percent of their health insurance premiums.
Three labor unions challenged Branstad's executive order saying any changes in insurance benefits must be negotiated or agreed to by the unions.
The unions want a judge to end the program and reimburse workers who participated. A hearing was held on Thursday.
The Des Moines Register reports that 95 employees took Branstad up on his proposal.
Iowa Department of Administrative Services Director Mike Carroll says the issue did not need union blessing because no benefits were changed.
A decision is expected by March.
More than 80 percent of state employees are not required to pay insurance premiums.