EOBs are one of the most common types of paperwork that we come across when helping a client organize their own documents or manage files for their parents or someone else in their care.  Lots of questions come up about their purpose and guidelines for retention. 

What are they?

Explanation of Benefits documents (EOBs for short) are sent by insurance companies and Medicare to outline medical expenses that are (and are not) payable by insurance.  They include patient information, the medical service provided, the associated costs, the portion covered by insurance, and the portion for which the patient is responsible. 

Why are they important? 

Reviewing EOBs is important to make sure that you or your charge is receiving the full benefits entitled and that you are invoiced only for the portion of expenses for which you are responsible.

In addition, they are sometimes the first clue or insight that a caregiver will get into a medical issue that their loved one may be facing.  You will see evidence of medical tests ordered, routine office and specialty visits, and medications prescribed.  Often, when caring for parents from a distance, you might not always know about every medical situation.  If you’re receiving the EOBs in the mail, it can help piece together what is happening with your loved one.

How long (and how) do I need to keep them? 

It depends…  

Here are some guidelines: 

1) If you or your parents take itemized medical deductions for tax purposes, you should store these with your tax records and consult with your CPA for required retention timelines. (Conventional wisdom calls for seven years.)  

2) If you or your parents have any disputed medical bills, you should keep these accessible until issues are resolved.  You might consider matching EOBs up with associated medical invoices and keep them together in a “tickler” or pending file until billing issues are resolved and invoices are paid. 

3) If there is an ongoing or more chronic medical condition related to these documents, that warrants holding on to them longer than for fleeting or resolved medical issues. Some experts suggest that 3-5 years is a good length of time for record retention (assuming you don’t need them for tax purposes as mentioned above). 

4) File EOBs by date, in folders by year, to make purging old records easier when the time comes.  Or consider going a step further and scan them to eliminate the paper altogether. 

What other paperwork is causing you confusion and overwhelm? Let us know so that we can share more ideas!

More in the Series:

Caring for Aging Parents Series: Having that (very important) Conversation with your Parents

Caring for Aging Parents Series: Collecting Critical Documents

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