Explanation of Benefits (EOB): What it is and How to Read it

When you visit a doctor, dentist, or other health care provider, you will generally be asked whether you want the service to be billed to your insurance. If you do, the medical office should fill out a health insurance claim and submit it to your health insurance company. This is essentially a request for payment to your insurance company to cover the cost of the visit, treatment, or equipment.

When the insurance company gets the claim, they will evaluate the claim, create an Explanation of Benefits (sometimes referred to as an EOB) and send it to you in the mail. They might also make a digital copy available through their website.¹

What Is an EOB?

EOB means Explanation of Benefits. It is a statement from your health insurance company providing details on payment for a medical service you received and explains what portion of those services were paid by your insurance plan and what part you're responsible for paying.

What triggers an EOB is often behind-the-scenes mechanisms between your healthcare provider (such as your doctor, dentist, nurse practitioner, etc.) and your insurer.

If you have insurance, your healthcare provider will bill the insurance company for the health services you receive. The provider uses medical billing codes to tell the insurer what services they have provided.

The insurer then looks at its agreement with your provider and your health insurance policy to determine the agreed upon price, how much the insurance company pays, how much you pay, and whether the money might come from a special account, such as a health savings account, if you have one. The result of these calculations is reflected in your EOB.

You will get a copy of your EOB either in the mail, or via digital correspondence, sometimes both.

How Do I Read My EOB?

EOBs can be confusing. In recent years many insurers have made strides to make them easier to understand by getting rid of jargon and offering plain language explanations of the information.

This helps, but you should still take the time to make sure you understand every line. Use your EOB to track your expenses and make sure there are no billing errors.

Will I Get an EOB Every Time I Get Health Services?

You should receive an EOB whether you have private insurance, insurance through your employer, or Medicare. You should also receive an EOB for every service you received, whether you owe money for the service or not, unless you arranged with your provider to pay outside of your insurance.

One exception could be those who have a Health Maintenance Organization (HMO) plan. Some of these plans rely on a monthly fee for care, rather than paying for each service separately. In these cases, you may not receive an EOB.

An EOB Is Not a Bill

The Explanation of Benefits tells you how much of the doctor's charges you are responsible for, but it is not a bill. The EOB is for your reference only. If you owe money for the service beyond what your insurer or health accounts pay, you may receive a bill directly from your provider.

What Is Included in Your EOB?

The EOB contains the following information:

• The name of the person who holds the policy, or the “primary," and the name of the dependent who received the health service
• The health insurance ID or policy number, and the claim number
• The name of the healthcare provider who administered care – doctor, dentist, specialist, laboratory, hospital, clinic, etc.
• The type of service or medical equipment you received and the date on which you received it; for service that lasted more than one day, the date range will be given
• The cost of the service (what your provider billed the insurance company)
• How much of the billed amount your insurance company paid
• The remaining amount to be paid to the provider, which is usually your responsibility

The EOB might contain information about whether the amount you need to pay will be applied to your deductible – an amount of money you must pay out of pocket before insurers cover bills for care. Sometimes an EOB also lists how much is left of your deductible for the year.

Other items that might be included in your EOB include a glossary of terms and definitions, information on how to appeal a claim, further details about the services reflected on the EOB, etc.

Why You Should Read an EOB

It's important to read EOBs as they arrive. Your EOBs help you understand several important aspects of your healthcare costs and can help identify disparities in billing and payments.

The EOB helps you find errors

When health insurance claims are completed and filed, errors are sometimes made by humans and computers, and these might be reflected on your EOB. Here are some of the mistakes you might find:

• Being billed for services you didn't receive
• Double billing, such as being billed twice for lab tests
• The provider billed the wrong amount for a service
• A provider billed for the wrong kind of service
• Your insurance company didn't cover a service they should have, according to your plan
• Incorrect dates of service
• An error with your deductible

The EOB helps identify potential medical fraud

If your EOB lists services you didn't receive, it's possible your provider could have made a mistake or may have billed fraudulently. This might point to medical identity theft, medical fraud, or Medicare fraud.

The EOB tells you how much you owe

Your EOB includes how much you owe. It is not a bill, which you will get separately. The amount you owe that's listed on your bill should match the amount you owe listed on your EOB. If you haven't received your bill or paid your provider yet, you can plan for making your future payment when you get your EOB.

The EOB helps track medical care and costs

If you keep your EOBs, you will have a comprehensive list of all the medical services and equipment you received throughout the year and how much they cost. This can be helpful when making decisions for future health insurance coverage.

What to Do if You Find Errors on Your EOB

Errors on your EOB that are not corrected could lead to long-term financial difficulties. If your EOB contains any kind of mistake, or if you suspect that it does, you should call your health insurance company, your healthcare provider, or both. Don't be shy about going over every line with each of these offices. Your financial and medical well-being is worth the effort.

Managing Healthcare Costs with CareCredit

If you are looking for an option to help manage your medical bills, consider healthcare financing with the CareCredit credit card. The CareCredit card can help you pay for treatment costs and make payments easy to manage.* Apply today and use our Acceptance Locator to find a provider near you that accepts CareCredit. Continue your wellness journey by downloading the CareCredit Mobile App to manage your account, find a provider on the go, and easily access the Well U hub for more great articles, podcasts, and videos.

Our Expert Reviewer

Patty Caballero and her team of consultants together have more than 35 years of health insurance knowledge working for some of the biggest health insurance companies in the US. She has knowledge in building brands and strategic initiatives to help consumers better understand their health benefits.