What's the error? Do you get any sort of messages? Do you get an IP address?
It's possible that your carrier doesn't support Personal Hotspots. See here for a list of supported carriers (globally).
I would be tempted to upgrade to 8.1. I found 8.0 to be a bit flaky with regards to the personal wifi hotspot, but 8.1 is much more robust on my iPhone 6.
According to that chart, Verizon is supported.
Yes, you're fine installing iOS 8.1. Give that a try and see if that improves things.