Program for alternative funding of employee and retiree benefits
View Patent ↗An insurance program for funding benefits by maintaining assets in the insurance program that includes an employer or employee owned trust account and at least one life insurance contract or non-cancelable accident and health insurance contract obtained directly or indirectly from a captive insurance company. The life insurance contract or non-cancelable accident and health insurance contract is purchased with assets from the trust account and the captive insurance company is at least partially owned by the employer. When paying or reimbursing benefits, the employer or the trust may pay the benefit and if the employer pays the benefit, the trust may reimburse the employer.
1. A non-transitory computer readable medium storing computer readable instructions thereon which when executed, perform a method comprising:
evaluating an alternative benefits funding arrangement in which funds are contributed by an employer to a Voluntary Employee Beneficiary Association (VEBA) trust and at least a portion of the funding is used to purchase at least one life insurance contract or at least one non-cancelable accident and health insurance contract from a captive insurance company or a non-captive insurance company and then reinsuring at least a portion of the at least one life insurance contract or at least one non-cancelable accident and health insurance contract if purchased from said non-captive insurance company by the captive insurance company by:
calculating what portion of said funding to use to purchase said at least one life insurance contract or at least one non-cancelable accident and health insurance contract;
determining, based at least on benefits liability of said employer and assets of said employer, whether to purchase said at least one life insurance contract or at least one non-cancelable accident and health insurance contract from a non-captive insurance company or a captive insurance company; and
determining what portion of said at least one life insurance contract or at least one non-cancelable accident and health insurance contract purchased from said non-captive insurance company should be reinsured by said captive insurance company;
wherein said VEBA trust is the beneficiary of said at least one life insurance contract or at least one non-cancelable accident and health insurance contract; and
wherein said captive insurance company is an insurance company that insures a risk of said employer who is not solely in the business of insurance.
2. The non-transitory computer readable medium of claim 1 , wherein the VEBA trust is at least partially owned by said employer.
3. The non-transitory computer readable medium of claim 1 , wherein the VEBA trust is at least partially controlled by said employer.
4. The non-transitory computer readable medium of claim 1 , wherein said evaluating further comprises determining an amount of funding to provide to said VEBA trust.
5. The non-transitory computer readable medium of claim 1 , wherein said evaluation indicates that said VEBA trust purchase said at least one life insurance contract or at least one non-cancelable accident and health insurance contract from said non-captive life insurance company.
6. The non-transitory computer readable medium of claim 1 , wherein said evaluation indicates what assets at least one of said VEBA trust and said captive insurance company invests in to generate additional assets.
7. The non-transitory computer readable medium of claim 1 , wherein said evaluation indicates what amount said captive insurance company invests in securities of said employer.
8. The non-transitory computer readable medium of claim 7 , wherein said securities is short term commercial paper of said benefits provider.
9. The non-transitory computer readable medium of claim 1 , wherein said evaluation indicates which individuals receiving benefits from said benefits provider should be an insured on said at least one life insurance contract or at least one non-cancelable accident and health insurance contract.
10. The non-transitory computer readable medium of claim 1 , wherein said at least one life insurance contract or at least one non-cancelable accident and health insurance contract is configured to maximize a cash value of said at least one life insurance contract or at least one non-cancelable accident and health insurance contract for a predetermined period of time, or to optimize at least one of a premium, a death benefit or another variable in accordance with said benefits provider's needs.