What is the primary function of an Explanation of Benefits (EOB)?

The primary function of an Explanation of Benefits (EOB) is to explain the claim payment between the insurer and the provider. The EOB is a document that a health insurance company sends to its members after they receive medical services. It outlines how the insurer processed the claim, including how much of the cost the insurance will cover, any deductibles that may apply, and the amount the insured member is responsible for paying.

By detailing this information, the EOB serves a critical role in helping consumers understand their financial responsibility for the care received, the services covered under their policy, and how the insurer has assessed the claim. It also provides transparency regarding the transaction between the healthcare provider and the insurance company, which can help consumers in managing their healthcare expenses and navigating out-of-pocket costs.

Other options do not accurately reflect the core purpose of an EOB. For instance, while an EOB may contain information relevant for understanding financial responsibilities, it is not a bill; rather, it offers a summary of claims processing. It does not provide treatment records—those are typically kept by healthcare providers for medical purposes. Similarly, while policy changes can affect coverage, they are not communicated through EOBs, which are focused specifically on illustrating the details of claim