What Is an Explanation of Benefits (EOB) for Insurance?
Demystify your Explanation of Benefits (EOB). Learn what your insurer paid, what you owe, and how to understand your medical claims.
An Explanation of Benefits (EOB) is a statement provided by your health insurance company after you receive medical services. It details how your insurer processed a claim for the care you received. An EOB outlines the financial transactions between your healthcare provider, the insurance company, and you, serving as a comprehensive summary of your health benefits. This document clarifies the costs the insurance plan covers and any remaining amount you may be responsible for.
Understanding Your EOB
The EOB includes key data points about your medical claim. The document begins with patient information, such as your name, policy number, and group number, ensuring the claim is linked to the correct individual. It also lists provider information, including the name of the healthcare professional or facility that delivered the services. Details about the services received are presented, noting the dates of service and a description of the procedures or treatments performed, often accompanied by specific procedure codes like Current Procedural Terminology (CPT) codes.
The EOB then shows the total amount billed by the provider for these services. This is followed by the approved amount, also known as the allowed amount, which is the maximum sum the insurance company agrees to pay for the service based on their contract with the provider.
The EOB details your financial responsibility, including:
Deductible: The amount you must pay out-of-pocket for covered services before your insurance begins to pay.
Copayment (copay): A fixed amount paid for a covered health service, typically due at the time of service.
Coinsurance: The percentage of costs you pay for covered services after your deductible has been met.
Amount paid by the insurer: The portion of the total charges your insurance covered.
Patient responsibility: The amount you owe, which includes any deductibles, copayments, coinsurance, or non-covered charges.
Distinguishing EOBs from Bills
An EOB is an informational statement sent by your health insurance company, detailing how a claim was processed and the allocation of costs between you and your insurer. It is not a request for payment, and you should not send money based solely on an EOB.
In contrast, a medical bill is a formal request for payment that comes directly from the healthcare provider or facility that rendered the services. The typical sequence is that you first receive the EOB from your insurance company, and then, if any balance is due, a separate bill will arrive from the provider. The amount on the medical bill should generally align with the patient responsibility listed on your EOB.
Acting on Your EOB
Upon receiving an EOB, it is advisable to review it carefully to ensure its accuracy. Begin by comparing the EOB with any medical bill you receive from your provider for the same services. Verify that the dates of service are correct and that the listed services are indeed those you received. It is also important to confirm that your personal information and the healthcare provider’s details are accurate.
Crucially, check if the patient responsibility amount on the EOB matches the balance due on the medical bill. If you identify any discrepancies or errors, such as charges for services not rendered or incorrect billing codes, first contact the healthcare provider’s billing department to seek clarification or correction. If the issue remains unresolved, or if the error seems to originate from the insurance processing, then contact your insurance company for further assistance.
Maintaining EOBs is also beneficial for record-keeping, especially for tracking progress towards your annual deductible and out-of-pocket maximums, and they can serve as documentation for potential medical expense deductions on your tax return. Taxpayers may need to retain these documents for several years to support any claims.