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dependent care. Petitioner self-insured the medical and life
insurance benefits under Winn-Flex while the remaining benefits
were insured through third parties.
The life insurance coverage provided by the company under
the core Winn-Flex benefit program was in effect only while a
worker was a full-time employee. Petitioner provided no
postretirement benefits to its employees under Winn-Flex. Early
retirees covered by the Winn-Flex plan had the option of
continued coverage under a separate insurance pool not paid for
by petitioner.
Since 1980, petitioner has also maintained a program to
provide death, disability, and retirement benefits to a limited
number of full-time management level employees. This program was
known as the "Management Security Program" (MSP). During the
fiscal year ending in 1993, 615 of petitioner's employees were
covered under the MSP. In order to provide funds for specific
benefits for each manager, petitioner purchased flexible premium
adjustable life insurance policies on each manager (MSP policies)
from American Heritage Life Insurance Co. (AHL). The MSP
policies are individual policies and not group contracts. The
death benefits under the individual MSP policies were tailored to
cover petitioner's costs for preretirement deaths of the covered
individual and to cover costs of postretirement benefits.
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