An explanation of benefits (EOB) is the insurance company’s written explanation regarding a claim, showing billed charges, adjustments, what they paid and what the patient must pay. If a claim is denied the EOB will have an explanation for the denial. The document is sometimes accompanied by a benefits check, but it’s more typical for the insurer to send payment directly to the medical provider.
Information in an Explanation of Benefits
Your EOB has a lot of useful information that may help you track your healthcare expenditures and serve as a reminder of the medical services you received during the past several years.
A typical EOB has the following information, although the way it’s displayed may vary from one insurance plan to another:
- Patient: The name of the person who received the service. This may be you or one of your dependents.
- Insured ID Number: The identification number assigned to you by your insurance company. This should match the number on your insurance card.
- Claim Number: The number that identifies, or refers to the claim that either you or your health provider submitted to the insurance company. Along with your insurance ID number, you will need this claim number if you have any questions about your health plan.
- Provider: The name of the provider who performed the services for you or your dependent. This may be the name of a doctor, a laboratory, a hospital, or other healthcare providers.
- Type of Service: A code and a brief description of the health-related service you received from the provider.
- Date of Service: The beginning and end dates of the health-related service you received from the provider. If the claim is for a healthcare provider visit, the beginning and end dates will be the same.
- Charge (Also Known as Billed Charges): The amount your provider billed your insurance company for the service.
- Not Covered Amount: The amount of money that your insurance company did not pay your provider. Next to this amount you may see a code that gives the reason the healthcare provider was not paid a certain amount. A description of these codes is usually found at the bottom of the EOB, on the back of your EOB, or in a note attached to your EOB. Insurers generally negotiate payment rates with healthcare provider, so the amount that ends up being paid (including the portions paid by the insurer and the patient) is typically less than the amount the provider bills. The difference is indicated in some way on the EOB, with either an amount not covered, or a total covered amount that’s lower than the billed charge.
- Amount the Health Plan Paid: This is the amount that your health insurance plan actually paid for the services you received. Even if you’ve met your out-of-pocket requirements for the year already and don’t have to pay a portion of the bill, the amount the health plan pays is likely a smaller amount than the medical provider billed, thanks to network negotiated agreements between insurers and medical providers (or in the case of out-of-network providers, the reasonable and customary amounts that are paid if your insurance plan includes coverage for out-of-network care and you’ve met your out-of-network deductible already).
- Total Patient Cost: The amount of money you owe as your share of the bill. This amount depends on your health plan’s out-of-pocket requirements, such as an annual deductible, copayments, and coinsurance. Also, you may have received a service that is not covered by your health plan in which case you are responsible for paying the full amount.
Your EOB will generally also indicate how much of your annual deductible and out-of-pocket maximum have been met. If you’re receiving ongoing medical treatment, this can help you plan ahead and determine when you’re likely to hit your out-of-pocket maximum. At that point, your health plan will pay for any covered in-network services you need for the remainder of the plan year.
The following are several sample EOBS: