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White paper explores funding benefits risks through captives

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Funding employee benefit risks through a captive insurance company is not for every employer, but those that do so can reduce their costs, reap significant tax breaks and provide enhanced benefits to employees, according to a new Business Insurance white paper.

Those are the key findings of “Captives for Benefits: How to Use a Captive to Save Money and Enhance Benefits Coverage.” Written by captive experts Donald J. Riggin and Karin Landry of Spring Consulting Group L.L.C. in Boston, the white paper details the history of captive benefit funding and the requirements employers must meet to win regulatory approval of their application to fund benefits through a captive.

The paper looks at funding benefit risks through single-parent and group captives, with a detailed analysis of how group benefit captives can be structured to distribute risk among members.

The paper also provides a step-by-step approach for organizations to follow in analyzing whether it makes sense to fund benefits through captives and if so, how to do it.

The paper comes at a time of increased employer interest in funding benefit risks through their captives.

More than 20 organizations, including some of the nation's largest corporations, such as Alcoa Corp., Archer Daniels Midland Co., H.J. Heinz Co. International Paper Co. and, more recently, Microsoft Corp. and Coca-Cola Co., have won Labor Department approval to fund benefit risks through their captives.

To purchase the white paper, go to www.BusinessInsurance.com/whitepapers.

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