An explanation of benefits (EOB) statement provides details about a health insurance claim that has been processed. It also explains what portion was paid to the health care provider and what portion of the payment, if any, is your responsibility.
Medical bills can be confusing, and an explanation of benefits statement can help break down the various components. If you learn how to read this important document, you should be able to understand why you owe what you owe.
Definition and Examples of an Explanation of Benefits
An explanation of benefits statement is sent to you after a health insurance claim, to lay out the details of the service, the charges from the provider, the amount covered by insurance, and how much money is still due. Each time they provide services to you, doctors, dentists, and other medical professionals will submit claims to your insurance. This is how they receive payment. In turn, the insurance company will send you an EOB. This is to inform you of the claims submitted, how much is being covered by insurance, and how much you owe.
Any portion of the medical expense not covered by the insurance company, such as a deductible or a co-pay, will be billed by the provider and should be paid directly to the provider.
The explanation of benefits may look like a bill, but it is not. It can also be hard to make sense of. You may need to call your insurance company to ask any questions about the EOB.
Though the precise layout and form of the EOB will vary by insurance company, a simple and straightforward EOB will include the following sections:
- A summary of your account with important identifying information and claim number
- The details of the claim, including the date and specific services provided
- The accounting, which includes the price of the service, the amount that your insurance is covering, and the difference between the two (sometimes called the "Adjustment," "Amount Allowed," or "Contracted Agreement")
- An optional summary of copays, deductible, and coinsurance
Many insurance providers, such as Blue Cross Blue Shield, will have sample EOBs available on their websites. You can review them to get familiar with what EOBs look like. This can also help you learn how the information is presented.
How an Explanation of Benefits Works
An EOB can help you avoid paying more than you should for health care. Look over an EOB when it arrives in the mail; then, compare it to your bills to ensure that you pay the correct amount. If you find an error on a bill from a doctor or other provider, call your insurance company to address the error.
What if you don't understand why you owe money or simply are having trouble reading the EOB? You can also call your insurance company or your health care provider to explain the details.
If you owe money, ask the insurance company if this payment will be put toward your out-of-pocket deductible. Or, you may need clarification on charges for certain services, you can ask the provider to explain the services and charges for each. If you think you have been charged in error, ask the provider to go over the entire EOB, line by line. This can help you see whether a mistake occurred.
Just as health care providers can make billing errors, coding errors can occur when insurance companies process EOBs. If you do not understand something on your EOB or you think your insurance policy covers an expense that was not paid, call your insurance company for an explanation.
If you find an error on your EOB and the insurance company cannot fix it promptly, or if there is a disagreement, you may need to have the benefit reviewed in a more lengthy process, or file a formal dispute.
How to Get an Explanation of Benefits
The explanation of benefits statement often arrives via mail. In most cases, it closely resembles a medical bill.
Most insurance companies now provide you with online access to your account. This can include digital access to EOBs. If you don't already have online access to your account, check with your insurance company about how to get it.
Once you've set up an online account, check to see what digital access options your insurer offers. Most will let you sign up for email alerts when EOBs are available. This can allow you to view them immediately, That way, you don't have to wait for them to arrive in your mailbox.
- An EOB is a statement from your insurer. It outlines which portion of a claim it has paid and what portion you will have to pay.
- You should get an EOB any time your health care provider bills your insurance.
- Always take a close look at an EOB to be sure the charges are correct.
- Compare EOBs to the bills you receive from providers. Be sure to reconcile them before you make a payment.