Explanation of Benefits (EOB)
A statement from your health insurer explaining how a medical claim was processed and what you owe.
What is EOB?
An explanation of benefits (EOB) is a document sent by a health insurance company to a policyholder after a medical claim is submitted. It is not a bill — it is a detailed statement showing what service was provided, what the provider charged, what the insurer's allowed amount is, how much the insurer paid, and what the member owes (through deductible, coinsurance, or copay). EOBs help patients verify that claims were processed correctly, detect billing errors or potential fraud, and understand how costs applied to deductibles and out-of-pocket maximums. EOBs are required by federal law under ERISA for employer-sponsored plans and under HIPAA for other insurance types. Most insurers now provide EOBs electronically through member portals, though paper statements are still sent for certain claims.
Example
A patient sees an in-network specialist who charges $400. The insurer's allowed amount is $300; the insurer pays $240 (80%) and the patient owes $60 (20% coinsurance). The EOB shows the $400 billed amount, the $100 network discount, the $240 insurer payment, and the $60 patient responsibility. Verifying this against the provider's bill confirms no billing error occurred.