Barring a legally enforceable contract that expressly says otherwise, you are never owed money under the law for time you did not work. If you are out sick, they do not HAVE to pay you sick time at all.
Neither Federal nor Iowa law cares one whit what happens to vacation or sick time. (Iowa strongly recommends that an employer follow their policy but does not put any mandates on what that policy should be.) As far as the law is concerned, you are not due any sick time; you are not owed by law any pay for time you did not work. You only have to be paid for time you actually WORKED, and you only have to be paid overtime if you WORK more than 40 hours in a week. It doesn't matter how many hours you get paid for. If you WORK 80 hours and call in sick for 8, you are owed 80 hours of pay. Neither Federal nor Iowa law prohibits your employer from then deducting 8 hours of pay from your sick time. It's a bit petty and picayune, if you ask my opinion, but it's legal.