OA-257 is not a denial yet. A Marketplace plan member who gets premium tax credits fell behind on premiums. The plan is holding the claim until the grace period ends. If the member pays, the claim is processed. If not, coverage ends back to the first grace month, and the claim is denied. Your job is to track the date and plan for both outcomes. (Primary source: X12 Claim Adjustment Reason Codes)
In brief: CARC 257 reads “The disposition of the claim/service is undetermined during the premium payment grace period, per Health Insurance Exchange requirements.” Note when the grace period ends, let the patient know, and watch for the plan to reverse and reprocess the claim.
Part of our denial codes library. Written by Manikandan J, CPC, CRCR, who has tracked grace-period holds on Marketplace plan claims. Published 24 October 2026. Last updated: 24 October 2026. Code wording quoted word for word from X12. Read about the author and our editorial policy, or contact us to report an error.
Exact wording of CARC 257
| Field | Value |
|---|---|
| Code | 257 |
| Group | OA only |
| Description | “The disposition of the claim/service is undetermined during the premium payment grace period, per Health Insurance Exchange requirements. This claim/service will be reversed and corrected when the grace period ends (due to premium payment or lack of premium payment). (Use only with Group Code OA)” |
| Start | 11/01/2013 |
Source: X12 Claim Adjustment Reason Codes, checked 24 October 2026.
Key terms: A CARC is a Claim Adjustment Reason Code from the X12 list, and it says why a line was paid differently than billed. A RARC is a Remittance Advice Remark Code that adds detail to the CARC. The group code is the two-letter prefix on the adjustment; OA means other adjustment: neither the contract nor the patient is named as owner of the balance. An electronic remittance advice (ERA) is the ANSI X12 835 transaction that carries these codes from the payer to the provider; its paper equivalent is the remittance notice or explanation of benefits.
Methodology: the code wording above is copied from the X12 list, and each fix step below links to the payer or CMS page it comes from.
The grace period rule behind OA-257
The rule is in 45 CFR 156.270. Members who get advance premium tax credits and have paid at least one full month get a three-month grace period.
- Month 1: the plan pays claims as usual.
- Months 2 and 3: the plan may pend claims. This is where OA-257 appears.
- End of month 3: if all premiums are paid, pended claims are processed. If not, coverage ends on the last day of month 1.
HealthCare.gov’s grace period page explains the same timeline for consumers.
Example scenario (fictional names), part 1
OA-257 Denial Example: What Happened
Marcus Bell bills for Elm Street Family Practice, a fictional clinic. A patient on a Marketplace plan had a visit on 12 August. The remit showed CAS*OA*257 and no payment.
The patient had paid the June premium but not July or August.
What should Marcus do while the claim is pended, and what happens next? Keep reading, or jump to how the OA-257 denial was resolved.
Working an OA-257 hold
- Find the grace month. Call the plan or check the portal for the grace period start and end dates.
- Tell the patient. Explain that the visit may not be covered unless the premiums are paid by the deadline.
- Set a follow-up. Put a reminder on the account for a few days after the grace period ends.
- Watch for the reversal. The plan will reverse the OA-257 line and reprocess the claim.
- Act on the result. If paid, post it. If coverage was ended, the claim is denied for no coverage and the patient becomes self-pay, subject to your financial policy.
For example, a visit in month 1 of the grace period pays normally, even if coverage ends later. Do not hold those claims.
Example scenario (fictional names), part 2
How the OA-257 Denial Was Resolved
Marcus confirmed the grace period ran July through September, so the August visit fell in month 2.
Fix: He told the patient about the deadline and set a follow-up for early October. No rebill was sent while the claim was pended.
Outcome: The patient paid the past premiums in September. The plan reversed the OA-257 line in October and paid the visit.
Names and details are illustrative; no real patient data.
OA-257 next to related eligibility codes
| Code | Meaning | What to do |
|---|---|---|
| OA-257 | Pended in the Marketplace grace period | Wait, inform the patient, follow up |
| CO-27 | Coverage ended before service | Check eligibility, other coverage |
| CO-31 | Patient not identified as a member | Fix the member details |
| CO-109 | Wrong payer | Send to the correct payer |
FAQ
What does OA-257 mean?
The Marketplace plan is holding the claim during a premium grace period. It will be reprocessed when the period ends.
Should I rebill an OA-257 claim?
No. The plan reverses and reprocesses it on its own once the grace period ends.
Can I bill the patient during the hold?
Wait for the outcome. If coverage ends, the claim is denied and patient billing follows your policy.
Which plans use OA-257?
Plans sold through the Health Insurance Marketplace, for members receiving advance premium tax credits.
How long is the grace period?
Three months for these members, under 45 CFR 156.270.
Sources
How we checked: the code quote on this page was matched word for word with the X12 CARC list on 24 October 2026.
- X12, Claim Adjustment Reason Codes (CARC 257). Accessed 24 Oct 2026.
- eCFR, 45 CFR 156.270. Accessed 24 Oct 2026.
- HealthCare.gov, Health insurance grace period. Accessed 24 Oct 2026.
Last updated: 24 October 2026 ยท Educational content; not legal advice.
Related denial codes
- CO-166: Submitted After the Payer's Responsibility for the Plan Ended
- CO-258: Patient in Custody or Incarcerated
- CO-254: Send It to the Medical Plan
- CO-270: Bill the Patient's Dental Plan
- CO-239: Rebill Separate Claims by Coverage Period
- PR-238: Coverage Ended Partway Through the Claim
- CO-224: Patient Identity Compromised
- PR-204: Not Covered Under the Patient's Current Benefit Plan