How Long to Keep EOBs and Why It Matters

An Explanation of Benefits (EOB) is a detailed statement from your health insurance company about a medical service you received. It outlines what your insurance plan paid, the amount not covered, and the portion you are responsible for paying. This document helps you track healthcare costs and understand how your insurance benefits were applied for a specific claim. An EOB is not a bill; instead, it serves as a record of a processed claim. You will typically receive a separate bill directly from your healthcare provider for any amounts you owe after your insurance has processed the claim.

General EOB Retention Guidelines

For most routine healthcare services, keeping Explanation of Benefits (EOB) documents for one to three years is sufficient. This timeframe allows individuals to confirm that claims have been processed correctly and that payments align with their understanding of their insurance plan. These EOBs provide a reference point for reconciling any bills received from healthcare providers with the amounts covered by insurance. It also allows time to identify and address common billing errors, such as duplicate charges or incorrect service codes.

This general retention period often aligns with the typical timeframe insurance companies allow for disputing a claim, which can range from 60 to 180 days after receiving the EOB. Having the EOB readily available during this period can streamline the process of appealing a denied claim or clarifying discrepancies. Once the claim is settled, payments are verified, and any potential disputes are resolved, the immediate need for these EOBs typically diminishes.

Situations Requiring Longer Retention

There are specific circumstances where retaining EOBs for a longer duration is necessary. If you plan to deduct medical expenses on your tax return, the Internal Revenue Service (IRS) recommends keeping supporting documentation, including EOBs, for at least seven years. This aligns with the statute of limitations for amending tax returns or for the IRS to audit a return. To qualify for a medical expense deduction, your unreimbursed medical costs must exceed 7.5% of your adjusted gross income (AGI), and you must itemize deductions on Schedule A of Form 1040.

For ongoing disputes or appeals related to medical services, EOBs should be kept indefinitely until the matter is fully resolved. This includes situations where you are appealing a denied claim or engaged in legal actions concerning medical billing. Comprehensive records provide essential evidence throughout the appeals process. Individuals with major medical events or chronic conditions may find it beneficial to retain EOBs for extended periods to maintain a complete health and financial history. This can be useful for tracking long-term treatment costs, understanding benefit utilization, or for future reference related to their medical care.

Managing Your EOBs

Effective management of your Explanation of Benefits (EOB) documents is crucial for financial clarity and peace of mind. Upon receipt, it is advisable to review each EOB against any corresponding medical bills to confirm accuracy, checking for correct dates of service, provider information, and billed amounts. This proactive review helps identify potential errors, such as double billing or services not received, which can then be promptly addressed with your healthcare provider or insurance company.

For organization, consider categorizing EOBs by year, by family member, or by healthcare provider, using physical folders or binders for paper documents. Digital storage offers a convenient alternative, involving scanning physical EOBs or directly saving electronic versions to secure digital folders or cloud storage. When opting for digital storage, ensuring strong passwords and encryption for sensitive health information is important. When an EOB’s retention period has passed, dispose of the document securely by shredding it, whether it is a physical copy or a printout of a digital record. This protects your personal and financial information from unauthorized access.