This is great advice @DevostDThe envelope feeder kit helped us as well, at least the little piece that holds down the "paper detection sensor" - That made it so that at least the versant wouldn't keep saying it had no paper.
I totally forgot about this tip a Xerox tech gave me once. If you don't have the envelope kit, get a piece of opaque tape (like painters tape or electrical, not transparent tape) and place it over the paper detection sensor in your tray. This will make the machine always think there is paper in the stack, sometimes the envelopes curl just right or are lifted by the flaps in a way that causes the tray to report that it's empty when it definitely is not. Then it'll keep lifting and be a bit better at feeding envelopes.