Your health insurance carrier sends you, the primary account holder for the policy, an explanation of benefits each time a claim is submitted for health care services provided to you or to your covered dependents. An explanation of benefits, or EOB, lists the details of the health care services. Issues of privacy, identify theft and documentation lead consumers to consider carefully the proper storage and retention of EOBs. How long you keep the EOB depends, in part, on how you use the document.
Explanation of Benefits
The EOB literally explains the benefits provided for a specific incident of health care services. In addition to financial information, the EOB might include medical procedure codes. For instance, your visit to a doctor because of flu-like symptoms results in an EOB that lists the services the doctor provided and the amount billed for those services. Another EOB might document the durable medical equipment, such as a wheelchair, which you received. The EOB breaks down the cost to reflect the amount for services covered under your insurance plan, the amount the insurance carrier paid and the remaining balance, all or part of which might be your responsibility.
Cigna, a large health care insurance carrier, recommends that you keep EOBs for at least one year. The eXtension website, a service of public colleges and universities, recommends keeping the EOB for three to five years after the medical claim is paid in full. The EOBs are helpful in tracking payments from different sources, such as primary and secondary insurance carriers, including Medicare. Match bills and EOBs to compare charges and payments, and to determine when the bills are paid in full.
The Internal Revenue Service advises taxpayers to keep tax records, including documentation such as EOBs, for as long as the records may be needed to verify deductions on tax returns. Another recommendation is to keep tax records for three years from the date you file your income tax return. This falls within the statute of limitations established by the IRS for taxpayers to file a refund claim or for the IRS to assess additional taxes on previously filed returns. Suzanne Kuhn, a professional organizer who specializes in medical records for patients with special needs, advises keeping EOBs for seven years if you use the documents to itemize and claim deductions on your income tax return.
Kuhn, a member of the Philadelphia chapter of the National Association of Professional Organizers, recommends keeping your EOBs for an extended period if you have a chronic illness or other serious health condition. Use your EOBs to supplement your medical history records over a long period of time. Kuhn recommends retaining the EOBs for at least five years after a serious medical condition has ended. Your family or executor of your estate can use the EOBs to help with legal matters.
Store your EOBs in a locked or otherwise secure place. You can scan EOB documents into your computer and password-protect the files. You can submit digital or electronic EOB copies to the IRS, if required. If you no longer have a specific EOB, you can request it from your health insurance carrier. Your insurance company also can generate a statement based on your needs for a range of dates or for specific health care incidents. Shred the EOBs when you no longer have any use for them.
- Cigna: Explanation of Benefits
- AARP: What You Can Learn From Your Explanation of Benefits Statement
- eXtension: How Long Should You Keep Explanation of Benefit Statements from Insurance Companies, Including Medicare?
- H&R Block: Store or Shred -- How Long Should You Hang Onto Tax Records?
- National Association of Professional Organizers: How Long Should I Keep Explanations of Benefits From Medicare and Health Insurance Companies?
- Texas Department of Insurance. "Understanding an Explanation of Benefits." Accessed Aug 3., 2020.
- Blue Cross Blue Shield of Michigan. "How Do I Read My Blue Cross Blue Shield of Michigan Explanation of Benefits?" Accessed Aug 3., 2020.
Gail Sessoms, a grant writer and nonprofit consultant, writes about nonprofit, small business and personal finance issues. She volunteers as a court-appointed child advocate, has a background in social services and writes about issues important to families. Sessoms holds a Bachelor of Arts degree in liberal studies.