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Explanation of benefits

Explanation of benefits (commonly referred to as an EOB form) is a statement the health insurance company sends to members explaining what medical treatments and/or services were paid for on their behalf.

Example health insurance explaination of benefits document

It is most famous as that “waste” of mail that comes to people after accessing medical services announcing that it is “not a bill.” So why bother? The explanation of benefits is important for a few reasons:

  1. It explains what the cost of the medical service actually was (the allowed amount not billed amount) which is applied to a person’s maximum benefit counter.
  2. It informs the member if they have any responsibility for payment so the member knows if a bill will be coming.
  3. Many EOBs will tell the member how much of their deductible is satisfied.