Facing increasing volatility in health insurance premiums, a dozen small private colleges in Virginia have formed a unique benefits group to better control the costs of employee health benefits.

It took eight years, state legislation and a number of national advisers to establish the Council of Independent Colleges in Virginia Benefits Consortium. The consortium enrolled its first participants in January, and the participating colleges are optimistic about the long-term success.

"We can do collectively much better than any of us could have done individually," said Bobby Thompson, senior vice president for business affairs at Ferrum College, one of the participating colleges.

The Council of Independent Colleges in Virginia, an association for private colleges, took the lead in forming the consortium after years of hearing frustration from members about the difficulty in obtaining quality health insurance benefits without volatile price fluctuations.

In 2007, the General Assembly passed a law allowing the group to be established.

"For us at Roanoke College, it was the opportunity to primarily reduce the premium pricing volatility that we've seen over the years, the roller coaster effect, and to increase our negotiating power for benefits," said Cathy Dickerson, director of human resources at Roanoke College, another participating college.

Dickerson said Roanoke College has seen increases in premium prices of 5 percent one year followed by 15 percent or 20 percent the next. Other times they have had no increase -- and then a 12 percent increase.

Just last year she said the college was facing a dramatic increase had it not joined the consortium.

Other schools reported similar experiences, with some having seen as much as a 30 percent increase in costs from one year to the next.

The council already uses the combined clout of its membership, which includes 27 private colleges in Virginia, for purchasing power in a number of other areas. They have negotiated contracts with Microsoft for computer software programs, and worked on collaborative telecommunications deals.

But taking on health care benefits was a different challenge altogether, said Robert Lambeth, president of the council.

"What we've done is bold," Lambeth said.

Most of the participating colleges employ between 200 and 400 people. That meant the colleges were fully insured, buying group policy plans from insurance companies.

Under the consortium, there are about 3,000 employees participating. And instead of buying an insurance policy, they have formed a group that allows them to be self-insured, much like larger businesses can do.

The group has contracted with Anthem Blue Cross Blue Shield to administer health care coverage.

The consortium has about $22 million in premium volume, Lambeth said.

The consortium has seven different health plans, with each participant able to select up to three plans to offer to their employees.

Self-insured groups also control the data collected on the plan participants.

"If you are insured by insurance company, it is difficult to get data on claims and why your employees are sick, and analyze what's going on," Lambeth said. "This allows us access to tremendous data on what's going on that will help put us in a much better position to help our employees. The data is very powerful."

That information will be used to help develop tailored wellness programs, a goal that the group is now seeking to tackle.

The end result, Lambeth said, is if a good benefit can be offered at a controlled price, Virginia's small colleges can better compete in recruiting high quality faculty to their campuses.

In addition to Ferrum and Roanoke College, the other colleges and universities in the consortium are Hollins; Bluefield, Bridgewater, Emory & Henry, Hampden-Sydney, Lynchburg, Mary Baldwin, Randolph-Macon, Sweet Briar and Virginia Intermont.