What is the primary purpose of an "explanation of benefits" (EOB) in insurance?

The primary purpose of an "explanation of benefits" (EOB) is to explain what services were covered and what the insured owes. An EOB is a statement sent by a health insurance company to its insureds, detailing the medical services and procedures that have been billed by healthcare providers. It lists the services covered under the policy, the amounts allowed by the insurer for each service, and what the insured is responsible for paying, including any co-pays or deductibles.

This document serves not only to inform the policyholder about the status of their claims but also to clarify how the insurer processed the claims related to their healthcare. By breaking down the costs and responsibilities, the EOB provides transparency, helping insured individuals understand their financial obligations regarding their healthcare expenses.