Unlocking the Potential of Multiple Employer Benefit Plans (MEBPs)

Attracting and keeping happy productive employees is the key to success in any service related industry. Gone are the days when “fair pay” was all that was needed to retain good people. Needs have changed, and employees need to feel a part of the business. Flexible benefits that meet the different needs of each unique team member can be part of your retention program, but if not done carefully, can lead to run away inflation. Over the last 20 years, inflation in benefit plans in Canada has averaged 6%. But when you look at the last 5 years, it has crept up to about 9% according to CPA BC.

The Solution: Multiple Employer Benefit Plans (MEBPs)

Every part of your benefits strategy is subject to inflation, but through a properly designed MEBP you can curb the cost of the foundation of your program. At first glance, the concept behind MEBPs is straightforward: amalgamate the resources of multiple employers to offer comprehensive benefits to their employees. This consolidation aims to leverage scale, potentially leading to better terms and lower costs compared to individual employer plans. However, the setup is anything but simple.

The initial challenge is in the legal and regulatory framework. MEBPs must comply with a myriad of rules at both the federal and provincial levels, ensuring that the plan is equitable, sustainable, and offers the promised benefits. This requires meticulous planning and legal counsel, often making the setup process a formidable undertaking.

Another layer of complexity is the diversity of needs and capabilities among participating employers. Tailoring a plan that fits various sizes and types of businesses demands a high degree of customization and negotiation. Balancing these differing needs while maintaining the plan's viability requires not just skill but a deep understanding of the benefits landscape.

Setting up an MEBP might sound like trying to navigate a complex recovery operation in the dead of night during a snowstorm. However, with the right approach, it's not only feasible but also highly rewarding. From my experience, establishing these plans isn't just about putting a good system in place; it's about building a foundation that supports its members for years, even decades. I've seen plans that have been running strong for over 25 years, proving their value and durability over time.

Pooling similar risks is the starting point. Ensuring enough participation, not just from those who feel they will use the benefits, is essential in setting up a sustainable plan. You need to spread the risk! If you have a good spread of risk, the plan should be self-insured, and issue refunds when the claims fund grows.

The Plan Sponsor

In most traditional plans, the employer is the plan sponsor. The employer picks one or 2 plans then decides on both the participation requirement, and the contribution level. Trying to get to having both 100% participation, and 0% contribution by the employee is the goal, and would make your plan the most sustainable, but it is hard to achieve that goal, especially for a single employer.

Finding an entity to sponsor a MEBP adds one additional layer of complexity. The MEBP sponsor needs to design enough base plans to chose from, as well as ensuring that participating employers enforce the plan’s participation and contribution guidelines.

Just as an employer contributes a portion of the premium in order to increase participation, the ideal MEBP sponsor would do the same. Just as an employer’s contribution towards the premium is part of the employees’ compensation, the MEBP sponsor’s contribution is part of the participating employers compensation. I have designed and managed several MEBPs in the Towing Industry in Canada. $ of them have been in place for over 20 years, with some of the original participants still on the plan. All of the plans have been successful by any measure, but the most successful one has averaged less than 3% inflation per year, has had many years where the premiums have decreased, and has issued 7 refunds averaging 2-3 months of premium.

Imagine getting about 2 months premium refund every 1-2 years and having a decrease in premiums about 1 year out of every 5!

A Towing and Recovery Association can also act as a plan sponsor. Although not as ideal as a MEBP sponsor who pays the participants, and contributes towards the cost, a well designed and run Association Sponsored Benefits Plan can offer a benefit of belonging to the association.


Multiple Employer Benefit Plans represent a powerful tool in the arsenal of employee benefits, capable of providing comprehensive and cost-effective coverage. However, their complexity cannot be underestimated. From the legal and regulatory hurdles at the outset to the ongoing management and adaptation to changing environments, these plans demand a high level of expertise and commitment.

As someone who has navigated these waters for over 25 years, I can attest to the challenges and rewards of managing MEBPs. The key to success lies in the careful selection of sponsors, whether they are payers like employers or associations wanting to offer a benefit of membership. Their role is crucial in ensuring the financial health, compliance, and adaptability of the plan.

In closing, while MEBPs may not be the simplest option on the table, their potential benefits for employers and employees alike can make them a worthwhile endeavor. With the right setup, management, and sponsorship, they can provide a stable, effective benefits solution for years to come.

This article aims to provide a basic understanding of multi-employer insurance plans in the towing industry and should not be taken as professional financial advice. Always consult with a financial expert or insurance professional for your specific needs.

About the author: Ralph Weber first entered the towing and recovery industry in the Canadian Army Reserve in 1978. Then between 1989 and 1995 he was director of motoring services at CAA Manitoba. In 1996 Weber started an insurance agency initially focusing on an underserved industry…the towing industry. His agency has grown into a multi-million dollar agency, but to this day almost half of his clients are towing companies. Ralph can be reached at Benefits@RouteThree.com or at 905-228-3339 ext 61

Originally featured in Tow Canada


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