Medical Factor

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Project Description

A mid-size dairy farm client with 50 employees was seeking to understand the driving factor behind their medical premiums and improve available carrier options (low participation had severely limited choice). The group had received a 37% increase in their health insurance costs.


Employee Benefit Advisor’s analysis revealed the company had a high medical factor. High medical factors reveal greater utilization and claim costs. (NOTE: Small groups receive a medical factor adjustment in the state of Florida. Ratings are from a low of 0.85 to a 1.15 high.)

EBA’s challenge was to bring down the medical factor and thus lower premiums. Companies with lower medical factors have more and better options for their health care, as well as access to a greater number of carriers and funding alternatives.

Lack of participation in the plan had greatly limited the client’s choice of carriers. Poor plan participation also meant the current carrier would threatened to drop the group from coverage.


EBA’s in-depth analysis of the Medical Factor and employee census was conducted. This process revealed areas where the client could alter their medical factor and we made recommendations accordingly.

EBA increased enrollment and installed a new replace plan, which ultimately decreased their Medical Factor.


Employee Benefit Advisors helped the client in a number of ways:

  • The plan change decreased their Medical Factor from 1.15 to .90 in the first year; stabilizing it at .98 in year four,
  • Coverage was provided for 9 more staff members,
  • Participation was increased to meet minimum standards for several carriers,
  • The plan designs selected allowed for a larger selection of carriers and coverage options for the employees to meet individual needs, and
  • The net effect was a decrease in overall premiums in spite of adding employees covered.
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