WASHINGTON—Microsoft Corp. has asked the Labor Department for authorization to fund benefit risks through the Vermont branch of its Bermuda-based captive insurance company.

Redmond, Wash.-based Microsoft wants to use the Vermont branch of Orcas Ltd., its 11-year-old property and liability captive, to reinsure long-term disability policies covering about 55,000 U.S. employees written by Prudential Insurance Co. of America, according to the application filed last week by Aon Consulting.

If the captive benefits funding application is approved, Microsoft, which reported $60.4 billion in revenues last year, would be the fourth Fortune 50 company to get Labor Department permission for such arrangements. Previously authorized Fortune 50 companies are jet engine manufacturer United Technologies Corp. in Hartford, Conn., Wells Fargo & Co. in San Francisco and Archer Daniels Midland Co. in Decatur, Ill.

Microsoft is the fourth corporation to file a captive benefits funding application this year with the Labor Department. Dow Corning Corp., a joint venture of Dow Chemical Corp. and Corning Inc., and R+L Carriers Shared Services L.L.C. filed applications last month.

Midland, Mich.-based Dow Corning wants to use Devonshire Ltd., its Washington-based captive, to reinsure life insurance policies written by Minnesota Life Insurance Co. and LTD policies written by Aetna Life Insurance Co.

R+L, a Wilmington, Ohio-based freight carrier, has proposed using Arizona captive Royal Assurance Inc. to fund life, LTD and short-term disability risks insured by a Unum Group unit.<,p>

In addition, YKK Corp. of America, the Marietta, Ga.-based U.S. subsidiary of Japanese zipper manufacturer YKK Corp., wants to expand benefit risks funded through its Vermont captive and use it to reinsure supplemental life insurance and LTD policies. The life insurance policies would be written by Minnesota Life, and the LTD policies would be written by Liberty Mutual Insurance Co. Last week, the Labor Department gave tentative authorization to the arrangements.

In addition, beverage giant Coca-Cola Co. is seeking to fund retiree health care risks through its South Carolina captive, Red Re Inc. However, in April, the Labor Department tentatively denied approval, saying Coca-Cola needed to address several issues, such as how the arrangement would enhance retirees' benefits. Discussions between the Labor Department and Atlanta-based Coca-Cola continue.

More applications are likely, experts say. “A lot more are in the wings,” said George O'Donnell, an Aon Consulting senior vp in Somerset, N.J.

Experts say captive benefit funding can cut benefit costs about 5% to 10% a year compared with buying coverage directly in the commercial market. Such savings are possible because underwriting gains go to the captive and not a commercial insurer.