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What is an Explanation of Benefits?

/ October 12, 2017

After you receive a medical, dental, or vision service, you should receive an explanation of benefits in the mail from your insurance carrier. After opening the letter, you may immediately panic because you think you are being billed by your insurance carrier. It is very easy to confuse an explanation of benefits and a physician’s bill.  However, on the top of the explanation of benefits it will typically state the following in big bold letters “THIS IS NOT A BILL.”

An explanation of benefits is exactly that, an explanation of how your benefits applied towards the services you received. In order to help understand your explanation of benefits, listed below are a few definitions that can help:

  1. Provider- Another name for your physician, doctor’s office, facility, or hospital.
  2. Claim- When your service is submitted to the insurance carrier for processing and review, they refer to it as a claim.
  3. Dates of Service- This will be the date for which you received your services.
  4. Billed Amount- The amount that your provider submitted to your insurance carrier for payment.
  5. Plan Discounts- If your provider is in-network with your insurance carrier and a negotiated discount is made with your provider and your insurance carrier, they will give you a plan discount on top of your benefits that are allowed.
  6. Amount Paid by your Plan- This is the amount that is paid by your insurance carrier under your benefits.
  7. Coinsurance- The percentage that you may owe after your deductible is satisfied.
  8. Member Responsibility or Amount You Owe- The total amount you owe to your provider. This number may include your co-insurance, discounts applied, and co-pay amounts.
  9. Notes- Additional details on how your services processed with your insurance carrier under your benefits.
  10. Annual Maximum- The maximum amount that you would need to pay prior to your plan benefit paying 100% of your in-network services.

 

Sources Cited:

https://www.uhc.com/content/dam/uhcdotcom/en/Legal/PDF/understanding-your-eob.pdf

https://www.premera.com/wa/member/manage-my-account/explanation-of-benefits/

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