An explanation of benefits is the statement a health insurer sends showing how a claim was processed and what amount, if any, the patient may owe. In plain language, it explains what the plan paid, what it did not pay, and why.
What an EOB shows
An EOB is not a bill, although it often arrives around the same time as the provider’s invoice. It usually lists:
- the service date and provider
- billed charges
- the negotiated or allowed amount
- what the insurer paid
- what applied to the deductible, coinsurance, or other member cost sharing
- denial codes or adjustment reasons
That makes the EOB one of the most important documents for checking whether a health claim was handled correctly.
Why it matters
Members use EOBs to spot billing errors, understand why a claim was reduced or denied, and confirm how much of the deductible has been satisfied. Providers and patients also rely on the EOB when a claim needs correction, appeal, or coordination with another insurer.
Practical example
A doctor bills $400 for an office procedure. The health plan’s allowed amount is $260. The EOB shows that $200 was paid by the insurer, $60 was applied to the member’s coinsurance, and the excess billed amount is written off under the provider contract.