What is an Explanation of Benefits (EOB)?

An Explanation of Benefits (EOB) is a statement provided by the insurance company that outlines the medical services covered by the health insurance policy, the amounts billed by the healthcare provider, and the portion of the costs that are the responsibility of the policyholder. It serves multiple purposes, including informing the insured person about what services were processed during a claim, what the insurance plan has paid, and what the insured needs to pay out-of-pocket, if anything.

This statement is essential for understanding the financial aspects of healthcare services and helps maintain transparency between the insurer and the insured. The EOB does not constitute a bill; instead, it provides a detailed breakdown related to the healthcare services rendered, illustrating the coverage a member has under their plan.

Other descriptions, like a summary of all health services consumed in a year, may describe different types of documents but do not specifically define an EOB. Similarly, a marketing tool or a legal document would serve entirely different purposes within the health insurance framework and do not accurately represent the function of an EOB.