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What an Explanation of Benefits Reveals About Your Plan

An explanation of benefits (EOB) document is a breakdown of services and items your insurance company covers and those they do not. Understanding the information on an EOB can help you better understand the details of your health plan, including potential out-of-pocket costs and other features.


What is an Explanation of Benefits (EOB)?

An explanation of benefits (EOB) is a document sent by an insurer to their policyholder detailing what they will and will not cover under a given plan. It shows the total cost of the service or item, how much the insurance company will pay, and what portion you may be responsible for. An EOB can also provide information on copayments, deductions, exclusions, coinsurance amounts, prior authorization requirements, how much you’ve paid in deductibles this year, deductible limits for your plan type, and more.


When Do You Receive an EOB?

An explanation of benefits document is generally sent to policyholders once they’ve received care, submitted a claim, or asked the insurance company to review a service or item. For example, if you visit the doctor for an annual physical, the insurer will generate an EOB after that visit and send it to you. You can also request an EOB from your insurer if one isn’t sent automatically.


What Information Can You Find in an EOB?

An EOB includes details about the services received, care dates, provider's office locations, and any approved payments. For example, it will list how much you paid out-of-pocket and how much your insurance covered. It also contains information on each medical service provided, such as the procedure code, diagnosis code, and any applicable prices or adjustments. Additionally, an EOB may include information regarding plan benefits and limits that could affect future visits or claims.


How Does Your Plan Impact Your Costs?

An EOB provides essential information about your plan's coverage and the cost of services. It allows you to see whether the provider accepted the amount paid by your insurance company as full payment or if there is a balance due after insurance provided its share of the costs. Your EOB will inform you how much of the total bill you are expected to pay out-of-pocket or if a copayment, deductible, or coinsurance applies.


How to Read and Understand Your EOB Document.

Your EOB document outlines the details of your insurance plan. You should pay special attention to the date of service, provider name, procedure code and modifiers, billed amount, covered amount, paid or adjusted amount, and deductible information. This information is critical for understanding how much you might be expected to pay out-of-pocket for your medical services. It's also a good idea to review precisely what procedures and associated charges are covered by your health plan to ensure that you receive accurate billing from your providers.


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