What is an "explanation of benefits" (EOB)?

An "explanation of benefits" (EOB) serves as a comprehensive statement from the insurer detailing the healthcare services a member has received, along with corresponding payment information. This document breaks down the costs associated with each service, indicating what portion of the bill is covered by the insurance, what the patient is responsible for paying, any deductibles that may apply, and whether the services were performed by an in-network or out-of-network provider.

The EOB is integral for policyholders as it not only clarifies the benefits that were applied but also assists in tracking healthcare expenses. It offers transparency by allowing the insured to understand how their claims were processed and how their health plans work in terms of cost-sharing and coverage limits. Thus, this documentation plays a crucial role in keeping the insured informed about their health care utilization and financial obligations.