Understanding How Mod Advisor Calculates Premium Impact Including Massachusetts ARAP

Mod Advisor provides clear, consistent premium impact calculations based on your experience modification factor (mod), your manual premium, and—in specific cases—state-level adjustments.

This guide explains how these values are calculated, why Massachusetts is treated differently, and how to interpret the numbers in your reports.

Massachusetts is the only U.S. jurisdiction that applies the ARAP factor (All Risk Adjustment Program) to experience modification calculations.

This means:

• If your governing state is MA
  → the ARAP factor must be applied to premium differences.

• If a specific claim or state group relates to MA
  → its mod impact must also be adjusted using ARAP.

• All non-MA states are always calculated at a factor of 1.0 (no ARAP).

The expressions inside Mod Advisor reflect these business rules.

 

Mod Advisor Logic

Minimum Mod Premium Impact

• If the governing state is Massachusetts, then Mod Advisor will use the Massachusetts ARAP value to determine the Minimum Mod Premium Impact
  Use ARAP (unless ARAP is missing or zero, then default to 1.0)

• All other states: ARAP factor = 1.0

The logic works like this.  If the Governing State is Massachusetts, then multiply the Miniumum mod value * Manual Premium * Massachusetts ARAP Value.    If Massachusetts is not the governing state, then use Miniumum mod value * Manual Premium.  If Massachusetts exists in the calculation but is NOT the governing state, then Mod Advisor will not use the Massachusetts ARAP Value.

 

Controllable Mod Premium Impact

• This calculation uses claim level data and will calculate the Mod Impact when the State is Massachusetts and use the ARAP value.  If the value is blank, then it will default back to 1.0
  • When the State is Massachusetts, then multiply the Miniumum mod value * Manual Premium * Massachusetts ARAP Value.
  • All other states use Minimum Mod Value * Manual Premium

 

Current Mod Premium Impact

• This calculation uses claim level data and will calculate the Current Mod by using the Mod Impact when the State is Massachusetts and use the ARAP value.  If the value is blank, then it will default back to 1.0 and add this to the Minimum Mod Value. 
  • When the State is Massachusetts, then multiply the Miniumum mod value * Manual Premium * Massachusetts ARAP Value.
    When the State is not Massachusetts it will use the Minimum Mod Value * Manual Premium and add this to the Minimum Mod Value.

 

If you come across an error or incorrect calculation, please reach out to support for troubleshooting.