The state claims the workers suit is premature since House Bill 213 has not gone into effect and those filing suit have not yet retired.

The filing said the Utah Public Employees Association failed to show the state violated a constitutionally protected property right. It also said state employees are not employed under any contracts.

HB213, approved by lawmakers and Gov. Jon Huntsman Jr. earlier this year, created a deluge of criticism from state employees angry about losing a 20-year-old benefit that allowed 8 hours of unused sick leave to be converted into one month of post-retirement health insurance. That benefit ends Jan. 1, replaced with a mixture of 401(k) money and health insurance at a reduced rate. Some employees may lose years of promised medical benefits. Some have retired early to take advantage of their socked-away sick leave, and more are expected to retire before the end of the year.

Lawmakers claim the rising cost of health insurance has made the benefit too expensive, threatening the state's bond rating. The bond rating determines the interest payments on multi-billion dollar loans the state takes out.

"The position of the state, is it has an obligation to the taxpayers not to incur an unpredictable amount of debt," attorney David Reymann said.

"No one benefits if the state can't afford to provide benefits to anyone."

The employees association has said the state for years avoided pay increases by providing this generous benefit.

"State employees have forgone substantially better employment opportunities in the local government and in the private sector, in reliance upon the treatment of their unused sick leave," according to the original lawsuit.

The Utah Public Employees Association, which represents several thousand state workers, plans to ask Judge William Barrett for "some extraordinary relief" before HB213 goes into effect Jan. 1, according to attorney Benson Hathaway Jr.

Huntsman's office and UPEA President Larry Evans continue to negotiate a possible settlement even while the lawsuit makes its way through the courts.

"We will say that our door is always open to the UPEA," Huntsman's legislative liaison, Mike Mower, said.

mcanham@sltrib.com