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Health Insurance Basics

3 Easy Ways to Make Sense of Your EOB

March 26, 2018

Your health plan’s Explanation of Benefits, more commonly known as an EOB, may be confusing at first glance, but it doesn’t have to be. Here’s how to make sense of your EOB.

It May Look Like One, but It's Not a Bill. So, what is an EOB?

Get an EOB – send a check. It’s a common mistake, and not a surprising one. EOBs do look a lot like a bill. But you don't make a payment in response to an EOB; you'll get a bill later.

The EOB’s real purpose is to explain how the medical care you’ve received is being paid by your insurance plan. You'll get one for each healthcare service claim you or your provider sends to your plan. That may include a doctor, hospital, lab, or clinic claim. Your health plan sends you an EOB after it receives your provider's bill.

Think of your EOB as a report that shows your deductibles and your out-of-pocket totals up to the date listed on the EOB. The billing process takes a while, so make sure to review your EOBs carefully, since the amounts shown may not always be current.

What You'll See: Common Terminology

Your EOB will have a record of your medical care with categories that include:

  • Date of Service: Check this to ensure what's shown occurred on that date.
  • Service Description: Note what services you received, whether it was an office visit, lab work, or other diagnostic screenings.
  • Provider Charges: This is what your provider billed your insurance company for your care.
  • Allowed Charges: What your provider receives as payment from the insurance company, usually different from the preceding provider charges.
  • Paid by Insurer: The amount your health plan pays your provider.
  • What You Owe: This is the most important number to you; the difference between what the provider charged and what your health plan paid.
  • Additionally, you'll see personal information, including your name, address, the name of the person receiving care—usually you—along with your policy and group number.
Simplify...Go Paperless?

Most experts suggest keeping your EOBs for at least a year. Many insurance plans have online portals where you can access your EOBs, and many plans keep EOBs on record for as long as two years. To save some trees, de-clutter, and simplify, you may want to sign up for paperless EOBs. 

Again, if you have questions about your EOB call your provider or your health plan.