Oct. 5-11, 2001
Back Issues
Dietrich unmasked -- Virginia Film Festival features Marlene Dietrich
Rate hikes drive U.Va. to seek new disability vendor
ROTC puts its best foot forward
"Masquerades" to be uncovered at 14th annual Virginia Film Festival

Notable -- awards and achievements of faculty and staff

Hot Links -- Financial aid site
Commemorative wall to stay through October
Play explores family misunderstandings
Biologist studies climate threat to some native prairie plants

Rate hikes drive U.Va. to seek new disability vendor

Staff Report

In light of significant premium increases announced by Unum Provident Corp. for its optional long-term disability coverage, the University has begun looking for a new vendor on behalf of employees who have chosen this insurance. The UNUM contract with the University expires July 1, 2002, but the new rates, some doubling or tripling, are effective this month.

Although this plan is not a University-sponsored benefit, the University has historically secured group rates (typically more reasonable than individual rates) and permitted employees to pay premiums through payroll deduction as a service to those who wish to purchase this type of insurance. The University’s attempts to negotiate lower increases with UNUM were thwarted by the plan’s declining enrollment and rising claims.

The UNUM plan is an entirely employee-paid, optional coverage that was first offered to U.Va. employees before University-sponsored programs such as the Virginia Sickness and Disability Program (VSDP) were made available in 1999. As more and more employees have opted for employer-paid coverage, the pool of U.Va. employees with UNUM has dwindled to about 500.

In addition, University employees have not paid enough in premiums to cover their claims. The local UNUM agent, Barry Stokes, stated that $1.38 in claims has been paid out for every dollar of premium received, even with steady premium increases the last two years.

The University plans to issue a Request for Proposal early in 2002 to try to find another vendor. University officials are not optimistic, however, about the ability to secure reduced rates. “With our employees’ claims record and the relatively small pool of participants, we don’t know what kind of bids we’ll see,” said Linda Way-Smith, U.Va.’s director of employee benefits. “We’ll do our best to get a reasonable group rate as an option for our employees.”

Open enrollment for VSDP, which would allow employees to select coverage under that employer-provided plan, is governed by state law and requires General Assembly approval.

“We approached the VSDP about extending an open enrollment period for our employees in light of these rate increases, but legislation will be required,” explained Way-Smith.

See Human Resources


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