How to Read an Explanation of Benefits (EOB)

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An Explanation of Benefits or EOB is a document you’ll receive from your health insurance provider after processing a claim on your behalf. The EOB lists specific information about the service you received as well as what your coverage amounts are. EOBs are born out of the complex US Healthcare system and thus aren’t easily read by mere mortals. This guide will walk you through a sample EOB.

Parts of the EOB

The EOB issued by your health insurance company may differ from what I cover, but many of the aspects should be the same or similar. EOBs are typically broken into three sections – Account information, Financial explanation and notes.

The account section will show you who the EOB is from and will state at the top of the page who the EOB is for. If you have multiple people on your health plan you will receive separate EOBs for each person.

The second part of the EOB is the meat and potatoes of the document. The financial explanation covers each service (by date), the type of service performed and the coverage amounts. Below that will state in simple terms what the insurance is covering and the amount you will be liable for.

If there are any comments about the services or coverage received these will typically be printed at the bottom of the sheet.

Keep in mind that an EOB is not a bill. It’s a way for you to better understand how your insurance is working for you and what portion of services you receive are your responsibility. Let’s look at the main section of the EOB in more detail.

EOB in Detail

In Section 1 we have details about the claim itself (see Figure 1).

The Insured field tells you whose insurance is paying for the claim. The Patient is the actual person who received the service. In this area will also be the claim number, provider and your insurance plan account number.

Section 2 details the financial outcome of your claim. From left to right:

Dates of Service: This is the date of service – pay particular attention to this and how it relates to your plan year. Note that deductibles and out of pocket max usually reset at the start of the plan year.

Service: A brief description of the service you received.

Charges: This will be the total amount the provider is charging for your services.

Allowed: Usually when going to an “in-network” provider, the insurance company negotiates discounted rates. This field may also be called “discounted rate” – essentially this is what you are being charged after discounts.

Deductible: The deductible is the amount you need to pay after taking into account coverage amounts. Some plans pay nothing until a deductible is met while others will pay a certain percentage.

Co-Pay: Some plans require a co-pay in addition to a deductible.

Co-Insurance: If you have multiple insurance plans you may have co-insurance. This will typically split the cost between insurance providers.

Non-Covered Amount: If you received a service which is not covered under your plan, that amount will be listed here.

Paid Amount: The amount the insurance company is paying as part of your plan.

Amount You Owe: Self-explanatory… you’re stuck with paying this much.

Notes: If there are any notes that need explanation you’ll find them here and fully described at the bottom of the document.

That’s about all there is to reading an EOB. They aren’t terribly exciting to look at, but they do help explain how or why a claim is being paid the way it is. If you still have questions about the way a claim is being paid be sure to reach out to your insurance provider and talk it over with them. Be sure to have you account number and claim number handy so they can pull it up and walk you through.

Good luck!