One of the approaches to modeling hybrid systems is to assign algebraic-differential equations describing the continuous behavior to states of state machines that represent discrete logic. The resulting hybrid state machine is a powerful concept to specify complex interdependencies between discrete and continuous time behaviors. It, however, exposes the simulation engine to a number of problems, which we discuss. The hybrid state machine based approach presented in this paper is fully supported by UML-RT/Java tool TimeBroker developed at Experimental Object Technologies.