An explanation of benefits, known as an EOB, is a common health insurance document that summarizes the costs your insurance policy will cover and what you may owe for recent health services you received.
Although many people think it looks like a bill, an EOB is not a bill. So, if it’s not a bill, what is an EOB?
Just as the name says, it’s an explanation of the benefits your health insurance applies to a particular health service or encounter.
Make sense? Read on.
Main Takeaways
- An explanation of benefits is a summary from your health insurance company explaining how a claim was processed and what you may owe.
- An EOB is not a medical bill and does not require payment.
- When you receive an EOB you should review it carefully and make sure there are no errors or discrepancies.
What’s the Purpose of an EOB?
An explanation of benefits can be perplexing until you understand its purpose.
When you use your health insurance policy, an EOB in medical billing is an explanatory document sent to you by your health insurance company after you’ve received care. When the EOB arrives, it means your provider has filed a claim with your health insurance billing them for your care, and that claim has been processed.
The EOB includes the total charges for your healthcare visit or service. It also details what portion of those charges your health plan will cover and what portion you, as the patient, may owe, including but not limited to your copay amount, your coinsurance amount and your deductible. In some instances, you may have already paid the copay at the time of your service.
What Should You Do With an EOB?
When you receive an EOB you should read it carefully and make sure that the services included in the document are, indeed, the services you received. If you spot an error, you can take action to correct it (there’s more information about that below).
At minimum, you should keep your EOB until you’ve received your final bill from your medical provider or health care facility. That way, you can cross-reference your bill with your EOB to make sure there are no errors.
It may also be helpful to keep your EOB longer-term, as a way of keeping a record of the health services you received. This could be helpful for people with chronic or serious conditions, in case questions arise about past treatments.
What’s Included In an EOB: Key Sections
While it may look complicated at first, an EOB is actually pretty straightforward, once you know what to expect. Typically, it will include information such as the following:
- Your name
- Your plan information, such as your group name and member ID
- The name of the health care provider who provided the care
- The date of the service
- A description of the service or services
- Billed amount
- Amount your health plan is responsible for
- Discounts and reductions applied to the costs
- Your copay amount
- Your deductible amount
- Your coinsurance amount
- The amount you’re responsible for
- Amounts that weren’t covered [MV4] [KS5] [LW6]
- Additional details or explanation of denial, if applicable
Explanation of Benefits vs. Medical Bill
Often, people confuse the purpose of an EOB with a medical bill. However, there are some distinct differences. The information below helps clarify what is an EOB vs. what is a medical bill.
|
|
Explanation of Benefits (EOB) |
Medical Bill |
|
Where does it come from? |
An individual’s health insurance company |
A healthcare provider or medical facility |
|
What is its purpose? |
To explain what your health plan covers and what may you owe |
To obtain payment from a patient for healthcare services |
|
Is action required? |
No, this is not a bill |
Yes, payment is due |
|
When is it sent? |
After the insurance company processes a claim from the health care provider or facility |
After a patient has received a service and the insurance company has paid the provider for their portion of the bill |
|
Does it explain denials or include remarks? |
Yes, if an insurance company has denied a claim there will typically be an explanation on the EOB |
No, it will generally include the amount due without an explanation regarding insurance |
In addition to the above information, there are a few things to look for when trying to decide whether you’ve received an EOB or a medical bill. Those include:
- Often, an EOB will outright state “This is not a bill.” It will lay out costs covered by your insurance company in addition to costs you may owe.
- An EOB may also include a glossary of terms to help you understand the verbiage within the document.
- An EOB will come from your health insurance company and will include information on how to contact your health insurance company if you have any questions or concerns.
- A medical bill will generally still state clearly that this is the amount you owe.
- A medical bill will include instructions on how you can make a payment and when that payment is due.
- A medical bill will come from a provider or health care facility and will include information on how to contact that provider or facility if you have any questions or concerns.
What to Do if Your EOB Has an Error
Mistakes happen, and EOBs are, of course, not exempt. That’s why it’s important to read carefully through the document and make sure there are no errors, including duplicate charges or miscalculations. If you come across incorrect information, it’s up to you to take action. Here are some steps to take:
- First, make sure your information is correct, including your name, policy number and member ID. If it’s incorrect, call the insurance company and let them know.
- If a service or charge seems incorrect, call your insurance company and ask for more information. Explain why you think something is in error.
- Compare the EOB to the medical bill from your provider’s office when you receive it. If the information doesn’t match, call your insurance provider, your health care provider or both and try to resolve the discrepancy.
- Request an itemized bill from your health care provider and see if that information is different than the information on the EOB. If it is, share the document with your insurance provider and see if you can come to a resolution.
- If none of the actions above resolve the issue, you have the right to appeal . Your EOB should include instructions on how to file an appeal and how much time you have to do so.
- Throughout this process, as you work to understand what went wrong, take notes. Write down the dates that you communicate with different representatives, make note of their names and summarize the conversation.
Can You Get a Digital Version of Explanation of Benefits?
In the digital age, some people prefer to access their EOB online. That should be possible, but how you access it may depend on your insurance provider and their policies and practices. Members of Blue Cross and Blue Shield of Alabama can simply sign into their account and elect to get electronic EOBs in their communication preferences. Check with your insurance provider and find out what their process is when it comes to digital EOBs and follow their instructions on how to access the documents.
Learn More About How Health Insurance Works
Once you learn the difference between an EOB and a medical bill, you’ll gain better insights into the medical claims process and how health insurance works. If you have questions, be sure and check with your health insurance provider for answers. And, always, keep reading and educating yourself as a patient to be informed and engaged.
For more about EOBs, claims and other important health insurance topics, continue your education here:
Explanation of Benefits: You Received it in the Mail, but What is It?
How to Read Your Claim Statements
Here’s Your Health Checklist for 2025
