RD286 - Virginia Sickness and Disability Program, A Post Implementation Review


Executive Summary:
The Virginia Sickness and Disability Program (VSDP) was approved by the 1998 Session of the General Assembly, effective January 1, 1999. VSDP, which is currently available to eligible state employees, was developed to replace the traditional employee sick leave and long-term disability retirement programs. Because VSDP has been in effect for almost a decade with no significant benefit or program adjustments, the duration and maturity of the program was sufficient that a post implementation review of the benefit structure and process was warranted. As a result, language in the 2006 Appropriations Act directed VRS to conduct a post implementation review of VSDP.

VSDP provides a bundled package of sick leave, short-term disability benefits, long-term disability benefits, and employer-paid long-term care insurance. Based on results from focus group interviews and a survey of agency human resource staff, VSDP is considered an important element of state employees total compensation package. Moreover, agency human resource staff responded positively regarding the Virginia Retirement System and its third party administrator’s management of the program. Finally, survey responses clearly indicate that VSDP claimants have had a positive experience with the claims process and the assistance provided by the VSDP third party administrator.

Benchmarking the VSDP benefit structure against plans considered to be industry standards was another research activity of this review. For this analysis, the disability benefit structure for 25 employers, with similar disability programs were reviewed. This review indicates that VSDP departs from industry standards because of the lack of a preexisting condition exclusion or eligibility waiting period, the definition of disability, and the occurrence of repeat short-term disability claims. Finally, the review included an analysis of employee return to work and actions that could support more widespread penetration of a return to work culture in agencies utilizing VSDP to support those efforts.