How Long to Keep Health Insurance Statements?

Health insurance statements serve as important records detailing your healthcare costs and coverage. These documents, including Explanation of Benefits (EOBs), premium notices, and payment confirmations, detail services received, amounts billed, and payments made. Understanding these statements is a fundamental aspect of managing your personal finances and healthcare journey. They provide a detailed account of how your health plan benefits are applied to medical claims.

Statements for Tax Purposes

Certain health insurance statements are crucial for tax compliance and potential deductions. For individuals who purchased health insurance through a Health Insurance Marketplace, Form 1095-A is provided. This form contains information necessary for reconciling advance payments of the premium tax credit or claiming the premium tax credit on your federal income tax return, and it should be retained with your tax records.

Other forms, such as Form 1095-B (provided by insurers or self-insured employers not classified as Applicable Large Employers) and Form 1095-C (provided by Applicable Large Employers to full-time employees), confirm that you had minimum essential coverage under the Affordable Care Act. While these forms are primarily for informational purposes and generally not required to be attached to your tax return, retaining them is recommended for your records. The Internal Revenue Service (IRS) generally recommends keeping tax records, including those supporting deductions or credits, for three years from the date you filed your original return or two years from the date you paid the tax, whichever is later. This period aligns with the standard statute of limitations for IRS audits.

However, if you underreport your gross income by more than 25%, the IRS may extend the audit period to six years. For itemized medical expense deductions, keep detailed records including payee, payment amount and date, and an itemized invoice showing the medical care received and its nature. These records, including EOBs that detail paid medical expenses, should be kept for at least seven years to support potential deductions if questioned by the IRS.

Statements for Other Financial and Administrative Needs

Beyond tax considerations, health insurance statements are valuable for various financial and administrative purposes. Keeping records that demonstrate continuous health coverage, such as premium payment confirmations or enrollment documents, can be important for future insurance applications, COBRA elections, or enrollment in programs like Medicaid or Medicare. COBRA provides a temporary extension of health coverage, and proof of prior coverage is often necessary.

Explanation of Benefits (EOBs) are particularly important for managing claims and understanding your financial responsibility. An EOB is a statement from your insurance company summarizing the costs of healthcare services you received, detailing what your provider billed, what the insurer allowed and paid, and what you owe. It explains how your benefits were applied. You should keep EOBs and related medical bills to track your progress toward your deductible and out-of-pocket maximums for the current plan year. Once you reach your deductible, your insurance covers a portion of costs; after hitting your out-of-pocket maximum, your plan typically covers 100% of eligible expenses.

These statements are also essential for disputing claims or appealing denied services. Most insurers have specific procedures for filing disputes, often requiring action within 60 to 180 days of receiving the EOB. If an initial dispute is unsuccessful, you typically have the option to appeal the decision, with appeal timelines varying but often within 180 days of the initial denial. For significant medical treatments or major health events, retaining associated statements and records for five to seven years, or even indefinitely, can be beneficial for personal medical history, future treatment planning, or estate planning.

Organizing and Storing Your Statements

Implementing an effective organization and storage system is essential for health insurance statements. You have options for both digital and physical storage, each with its advantages. Digital storage methods include secure cloud storage, external hard drives, or password-protected folders on your computer. Secure cloud solutions often use strong encryption, offering protection against data loss or damage.

For physical records, a filing cabinet or binders can be used to organize documents. Organizing statements by year, by medical provider, or by family member can make retrieval easier when needed. Regardless of the format, prioritizing security is important due to the sensitive personal and financial information contained in these documents. Digital files should be protected with strong passwords and encryption, and regular backups are advisable to prevent data loss. Physical documents should be kept in a secure location, protected from potential hazards like fire or water damage.

Periodically reviewing your stored records allows you to discard documents that are no longer needed based on the recommended retention guidelines. This practice helps to reduce clutter and ensures that you retain only the information that serves a current or future purpose. Maintaining an organized system reduces stress and provides quick access to vital information for tax purposes, claims management, or personal reference.