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CA Department of Insurance

Understanding Your Policy

Check your Evidence of Coverage

Every policy has a written Evidence of Coverage (EOC). The EOC is your guide to what is covered and what is excluded, how much you will pay depending on the circumstances, what your cost sharing will be, and other information about using your coverage. Keep this document handy for when you have questions about your policy.

What is an Explanation of Benefits?

Each time your insurer pays for a service you use, they send you an Explanation of Benefits (EOB). The EOB is your insurance company's written explanation for that claim, showing the name of the provider that covered the service and date(s) of service. The insurer is also required to send you a clear explanation of how they computed your benefits. This may include the amount billed, the allowed amount, what the insurer paid, and/or your share of the cost (if any).

Also, if any claims are denied or denied in part, you will receive a written explanation of the reason(s) for the denial. The EOB will usually show:

  • Billed amount: what the provider billed
  • Allowed amount: what the insurer allows for the service (sometimes shown as an "insurer discount" - i.e., if the billed charge is $50 higher than the insurer's allowed amount, the insurer discount would be $50),
  • Paid amount: what the insurer paid the provider
  • Patient's responsibility: patient's copay or deductible amounts, or whatever is left over that the patient has to pay. This is based on the plan's benefit design.

Depending on your plan and the service, EOBs may show more or less information.

 

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