Alyssa Lane
An Explanation of Benefits (EOB) is a valuable document that outlines the breakdown of charges for services received, including how much your insurance company paid and the amount you owe. While it is not a bill, it is beneficial to keep EOBs for a certain period for various reasons. So, how long should you keep them?
| Characteristics | Values |
|---|---|
| What is an EOB? | A breakdown of how an insurance claim was paid on your behalf |
| How long should you keep EOBs? | If you don't have a recurring or serious condition, keep EOBs for a year. Keep them longer if you've claimed prescription costs on your taxes. Keep them for up to 10 years to be cautious. |
| What to do with EOBs? | Keep them on paper or scan them onto a computer. Store them securely and destroy them securely. |
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What You'll Learn
Keep medical EOBs for at least a year
Keeping medical EOBs (Explanation of Benefits) for at least a year is a good practice for several reasons. Firstly, EOBs help you understand how your insurance claim was processed and what amount you might owe. They provide a breakdown of the charges for the services you received, allowing you to compare them with your bills and ensure you are not paying more than you should.
Secondly, EOBs are valuable for record-keeping purposes. They help you create and maintain your health history, especially if you are dealing with a serious or chronic medical condition. This can be beneficial when filing for reimbursements or claims with your insurance provider. Additionally, EOBs can assist in proving that you've met your annual deductible and can be useful for tax purposes if you take the medical expense deduction.
The length of time to retain EOBs depends on individual circumstances. While some sources recommend keeping them for at least a year, others suggest retaining them for three to eight years, especially if you have a chronic illness or are claiming medical deductions. It is essential to securely store and then destroy EOBs to prevent sensitive data from falling into the wrong hands.
You can choose to keep EOBs as physical paper files or scan them onto your computer, whichever suits your preference. If opting for paper files, ensure they are kept in a safe and dry place. For electronic storage, make sure to back up your data reliably. Remember, if you need any EOBs that you might have discarded, you can always contact your insurance provider, as they store them electronically.
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Store them on paper or a computer
There are differing opinions on how long to keep medical insurance explanation of benefits (EOBs). Some sources recommend keeping them for one year, while others suggest retaining them for up to ten years. The variation in recommended retention periods is due to the specific circumstances of the patient and their health status.
If you have no recurring or serious health conditions, keeping EOBs for a year should suffice. However, if you have claimed prescription costs on your taxes, it is advisable to retain them for longer. In the case of a serious illness, it is recommended to keep EOBs for five years after recovery, or seven years if a medical deduction has been claimed. If you are assisting someone with care, retaining EOBs can help keep track of their health history.
Regardless of the retention period, it is essential to store EOBs securely and destroy them properly when the time comes. You can choose to store them on paper or scan them onto a computer, whichever suits your preference. If opting for paper storage, keep the documents in a dry area to prevent water damage. For electronic storage, ensure that you have reliable data backup solutions in place.
EOBs are valuable for cross-referencing with your insurance company to ensure you are receiving all your entitled benefits and have met your deductible. They can also help identify billing errors or fraud, serving as proof to support your case. Additionally, EOBs can be used to verify deductions when filing tax returns.
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Retain EOBs for 3-8 years after medical care
Explanation of Benefits (EOBs) are not bills but a breakdown of how an insurance claim was paid on your behalf. They are a valuable part of your files and can be used to prove that you've met your annual deductible. They can also be used to prove what you have paid if you take the medical expense deduction on your annual IRS 1040 Schedule A.
While there is no clear guidance on how long to retain EOBs, experts recommend keeping them for a set period, but this depends on individual circumstances. If you are of sound health, it is recommended to keep EOBs for a year. If you are assisting someone with care, it is recommended to keep their EOBs for five years after the illness or condition is alleviated. If you are claiming a medical deduction, keep the EOBs for seven years. If you have a recurring or serious condition, keep documents like prescription receipts for a year, and longer if you've claimed prescription costs on your taxes.
Outside of these guidelines, it is generally recommended to keep EOBs for three to eight years after receiving medical care. You can keep the records on paper or scanned onto a computer, but be sure to back up your data reliably if you go the electronic route.
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Keep for 7 years if claiming a medical deduction
If you're claiming a medical deduction, it's important to keep your medical insurance explanation of benefits for at least seven years. This is because the IRS can audit your tax returns for up to six years from the date they were filed if they suspect any issues, and having those records will help you provide evidence to support your claimed deductions.
Keeping these documents for seven years ensures that you have a comprehensive paper trail to protect yourself in case of an audit. It also helps you accurately You may want to see also Explanation of Benefits (EOB) documents contain confidential information, such as Social Security numbers and sensitive financial information. As such, it is important to destroy them securely to prevent sensitive data theft. There are several ways to destroy paper documents securely. One of the most common methods is to use a paper shredder. Paper shredders come in three types: cross-cut, strip-cut, and Department of Defense (DoD)-certified. Cross-cut shredders cut paper into small pieces in two directions, while strip-cut shredders only cut in one direction. DoD-certified shredders are the most secure option, but they are also the most expensive. If you have a large number of documents to shred, you can consider using a shredding service offered by companies like FedEx and UPS. Another option is to burn the documents. However, it is important to check your local regulations, as it may be illegal to openly burn trash in residential areas. When burning documents, it is recommended to mix them with other pieces of scrap paper, so that any unburned pieces are harder to read. After the fire is out, sift through the ashes and burn any remaining legible pieces. You can also destroy documents by soaking them in a mixture of bleach and water. Bleach breaks down the paper and destroys the colourants of the ink, making it difficult to retrieve any information. However, bleach is a hazardous chemical that can cause serious illness if not used safely. It is important to wear protective clothing and avoid contact with your skin and eyes when working with bleach. Additionally, some local businesses offer free paper shredding events for customers. This option allows you to have your documents shredded using professional cross-cut shredders, but you may need to store the sensitive information for a longer period while waiting for the event to occur. Finally, you can also use methods such as composting, multi-cut scissors, or hole punches to destroy documents. However, these methods are less secure and may not fully protect against information breaches. You may want to see also An EOB is a breakdown of how an insurance claim was paid on your behalf. It is not a bill, but it will show how much your insurance company paid and the amount you owe. It depends on your personal situation. If you don't have a recurring or serious condition, keep your EOBs for at least a year. If you have a chronic illness, it is recommended to keep them for five years after your condition is alleviated. If you've claimed a medical deduction, keep them for seven years. You can keep your EOBs on paper or scan them onto a computer. If you go the electronic route, be sure to back up your data. Contact your insurance company right away. EOBs can serve as proof in cases of fraud or billing errors. Make sure to store and destroy your EOBs securely to prevent sensitive data from falling into the wrong hands. Also, note that you can request a replacement EOB from your insurance company if needed.Medicaid and Medicare: Understanding Insurance Coverage Overlap
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Destroy securely to prevent sensitive data theft
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