Harrisonburg City Schools Turn To Private Company for Disability Insurance

By: Carly Stephenson Email
By: Carly Stephenson Email

ROCKINGHAM COUNTY, Va. -- Some of the local governments in the Commonwealth are opting out of the state disability program and turning instead to private companies.

If they go with this option, they need to opt out by November 1.

The state is going to stop offering disability retirement to new employees after January 1.

As for Rockingham County schools, they have more control when negotiating rates with a private company, according to the school's human resources department.

"This is [Virginia Retirement System's] way to say how are you going to take care of disability leave for your brand new employees," said D.D. Dawson, the Director of Finance for Harrisonburg City Schools.

Dawson said that originally, the Virginia Retirement System (VRS) offered disability lumped together with other benefits.

The private company that the school system may go with would offer lower rates than the VRS.

VRS's higher rates could change after July of next year.

"So not knowing what VRS is going to change their rates to, we thought it was safer to go with a less expensive rate," said Dawson.

For a new teacher, with a $42,000 salary, there would only be an $8.40 difference.

"It's a very small difference, but as that pool of employees grows it's going to be a bigger difference," said Dawson.

Rockingham County has decided to go with the Standard Insurance Company; they have a three-year guaranteed rate.

County administrator Joe Paxton said that this is the less expensive option for Rockingham County schools

The first factor that was considered was flexibility.

The county wouldn't have been able to go to another vendor or negotiate rates since once new employees start the plan, the whole point is to continue to provide coverage.

"You wanna offer something to get that employee by while they're going through therapy or while they're out on leave for a pregnancy or whatever so they can get back to work rather than retiring," said Dawson.

The disability program is the only thing they can opt out of from VRS.

The school system will still offer group life insurance and health insurance and pay into the retirement system for employees.

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