Health insurance is essential if you want your medical care to be affordable. Unfortunately, it comes with a whole world of unfamiliar terms! One term you’ll often see is “explanation of benefits,” sometimes abbreviated as EOB. You may have even received it in the mail after seeing a provider. But what is an explanation of benefits?
An EOB is a notice from your insurance company that a claim has been processed. It will tell you what care you received, how much your insurance company paid, and how much (if any) you owe out of pocket. It is not a bill. Here are some tips for understanding your next EOB.
What Should You Do with an Explanation of Benefits?
Because an EOB isn’t a bill, you don’t need to pay anything when you receive one. However, you shouldn’t ignore it, either.
If it’s not a request for payment, what is an explanation of benefits for? It’s primarily meant to help you understand how your insurance coverage is used each time you receive healthcare services.
When you receive an EOB, it’s a good idea to read it carefully and ensure the information is correct. Insurance companies are generally accurate, but they can make mistakes. You don’t want to end up being billed more than you’re supposed to! Look for the following items the next time you get an EOB:
The date of service
The services you received
The amount your insurance company covered
The amount you will owe
Make sure everything in your explanation of benefits is consistent with your plan. For example, let’s say you have a plan where you owe nothing for visits to your primary care physician. If your EOB says that you will be billed $40 for a primary care visit, you should contact the provider of the service to verify if correctly billed.
You don’t need to keep your EOBs forever, but you should save them until you get a final bill from your doctor’s office. Sometimes, you may get an EOB before a bill. In other cases, you may receive a bill first.
Once you have both your bill and your EOB, compare the amount you owe according to the EOB to the amount on the bill. If the amounts are the same, that’s the amount you’ll need to pay.
What’s the Difference Between an EOB and a Bill?
At first glance, an explanation of benefits and a healthcare bill may look similar. After all, both detail the total cost of services you received on a given date. Both will also show how much your insurance company covered and the amount you owe.
An explanation of benefits comes from your insurance company and does not require you to make a payment. A medical bill comes from your healthcare provider and requires you to make a payment.
Insurance companies know that many consumers confuse EOBs with medical bills. Consequently, any EOB you receive will probably include the words “THIS IS NOT A BILL” in a large, bold font.
How Can You Ask for an EOB from Your Insurance Carrier?
Your insurance company should automatically send you an EOB each time you receive medical care. Depending on your carrier, you might receive each one online, in the mail, or both. Some insurers, however, don't send an EOB if there is no member responsibility, so the member may have to request it.
However, if you don’t receive an EOB (or if you’ve misplaced it and want another), you can call your carrier’s customer service number. It’s usually listed on the back of your insurance card.
If you want to quickly and easily access your EOBs or view your entire claims history, you should be able to do so by logging into your insurance carrier’s website. Most have a customer portal or app where you can view plan documents, explanations of benefits, online ID cards, and more.
If you aren’t sure how to set up an online account, your insurance company’s customer service department should be able to help.
Understanding Your Insurance Plan
Now you know the answer to a common question — what is an explanation of benefits? If you often find documents from your insurance company hard to understand, you’re not alone! It can take some time and effort to familiarize yourself with insurance terms and learn how to read the various documents you receive from your carrier.
However, that time and effort are well worth it. When you understand communications from your insurance company, you’ll be better equipped to catch any billing errors and make informed decisions about your health.