The OA-277 denial code means the patient’s small business plan bought through a SHOP Exchange is in a premium grace period. The employer is behind on premiums, so the payer will not decide the claim yet. The fix is to wait, not resubmit, and watch for the reversal and correction once the grace period ends. (Primary source: X12 Claim Adjustment Reason Codes)
In brief: CARC 277 is a hold code for SHOP coverage. X12 says it is used during the 31-day SHOP grace period, with group code OA only. If the employer pays, the claim is reprocessed. If not, coverage can end and the claim is reversed.
Part of our denial codes library. Written by Manikandan J, CPC, CRCR, who has worked grace-period holds and premium reversals for physician practices. Published 10 November 2026. Last updated: 10 November 2026. Code wording quoted word for word from X12. Read about the author and our editorial policy, or contact us to report an error.
What does denial code OA-277 mean?
Denial code OA-277 means the claim is undetermined, not denied. The patient’s employer bought group coverage through a SHOP Exchange and missed a premium payment. During the grace period the payer holds the claim. It decides once it knows whether the premium was paid.
| Field | Value |
|---|---|
| Code | 277 |
| Description | “The disposition of the claim/service is undetermined during the premium payment grace period, per Health Insurance SHOP 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)” |
| X12 note | To be used during 31 day SHOP grace period. |
| Start | 11/01/2015 |
Source: X12 Claim Adjustment Reason Codes, checked 10 November 2026.
Key terms: SHOP is the Small Business Health Options Program, the Marketplace channel where small employers buy group plans (HealthCare.gov small businesses). A grace period is the time a plan waits for a late premium before ending coverage (HealthCare.gov glossary). OA means other adjustment, so no one owes the balance yet.
Methodology: the code wording is copied from the X12 list, and the grace period rule comes from the eCFR section cited below.
Why is CARC 277 OA only?
CARC 277 is OA only because nobody owns the balance yet. CO would push it onto your contract. PR would make the patient owe it. Neither is true while the employer can still pay. OA parks the amount until the plan reverses the line and sends a final answer.
| Group | What it would say | Fits a grace-period hold? |
|---|---|---|
| OA-277 | Outcome unknown until the premium question is settled | Yes, the only valid group |
| CO or PR | The provider or patient owns the balance now | No |
How long does the SHOP grace period last?
The SHOP grace period X12 points to is 31 days. Under the federal SHOP rule in 45 CFR 155.735, premium is due on the first of the coverage month. If it is not received within 31 days, the employer group can be terminated.
That rule covered federal SHOP plan years before 2018. State SHOPs and later plan years can set their own terms, such as notice dates and reinstatement rules. So ask the plan which dates apply.
Example scenario (fictional names), part 1
OA-277 Denial Example: What Happened
Marisol Ortega runs billing for Brookfield Family Dermatology. A patient covered by her employer’s small group plan, bought through a SHOP Exchange from a fictional commercial plan, came in for a rash.
- Billed: 99213 with L30.9 (dermatitis, unspecified), entered as L309.
- 835 result:
CAS*OA*277for the full charge, paid $0. - Remark: N618, “Alert: This claim will automatically be reprocessed if the enrollee pays their premiums.”
The front desk wanted to send the balance to the patient that week.
Should Marisol bill the patient, resubmit, or wait? Keep reading, or jump to how it was resolved. Keep reading, or jump to how the OA-277 denial was resolved.
What should I do when I get OA-277?
When you get OA-277, hold the claim and set a follow-up date after the grace period ends. Do not resubmit, because the payer will reverse and correct the line itself. Do not bill the patient yet. Tell them the employer premium is late, so they can raise it with their employer.
- Read the remark. N618 means the plan will reprocess on its own if premiums are paid.
- Hold the account. Pause patient statements while the outcome is unknown.
- Tell the patient. Explain that the employer plan is behind on premiums.
- Diary a follow-up. Check about 31 days after the coverage month began.
- Post the final remit. The reversal and correction show the true outcome.
Claim form note
No claim form visual is shown here. OA-277 is a coverage hold caused by a late premium. Nothing on the CMS-1500 or UB-04 was wrong, so there is no box or form locator to change.
Example scenario (fictional names), part 2
How the OA-277 Denial Was Resolved
Marisol stopped the patient statement and set a task for 35 days out. She asked the payer’s portal for the grace period dates. It showed the group was in its grace month.
The patient told her HR team, and the employer paid the late premium. Three weeks later, a new 835 reversed the OA-277 line. It reprocessed the claim, paid the visit, and moved the coinsurance to PR.
Outcome: no duplicate claim was sent, and the patient got one correct statement. Marisol added OA-277 to her hold list, next to OA-257.
Names and details are illustrative; no real patient data.
Names and details are illustrative; no real patient data.
What happens if the employer never pays?
If the employer never pays, the plan can end the group’s coverage and reverse the held claim. The reversal often carries N698, a remark for non-payment of premiums by the end of the grace period. Then the services may become the patient’s balance, based on your financial policy.
Before you bill the patient, check for other coverage, such as a spouse’s plan or new employer coverage. Also check whether the plan offered reinstatement.
Is OA-277 the same as OA-257?
No. OA-277 and OA-257 use the same hold wording, but for different markets. CARC 277 is for SHOP small group coverage. CARC 257 is for individual Health Insurance Exchange coverage, where the grace period can be longer for people getting premium tax credits.
Related codes
| Code | Meaning |
|---|---|
| OA-257 | Same hold, individual Exchange coverage |
| CO-27 | Expenses incurred after coverage terminated |
| OA-133 | Line pending further review |
FAQ
What does OA-277 mean?
The SHOP employer plan is in a premium grace period, so the claim is on hold.
Should I resubmit an OA-277 claim?
No. The payer reverses and corrects the claim when the grace period ends.
Can I bill the patient for OA-277?
Not yet. Wait for the final remit before you bill anything.
How long is the SHOP grace period?
X12 ties CARC 277 to the 31-day SHOP grace period.
Which remark code often comes with OA-277?
N618 is common. It says the claim will be reprocessed if premiums are paid.
Sources
How we checked: the CARC 277 quote and note were matched word for word with the X12 CARC list on 10 November 2026, and the remark codes with the X12 RARC list.
- X12, Claim Adjustment Reason Codes (CARC 277, 257). Accessed 10 Nov 2026.
- X12, Remittance Advice Remark Codes (N618, N698). Accessed 10 Nov 2026.
- eCFR, 45 CFR 155.735 (SHOP termination for non-payment). Accessed 10 Nov 2026.
- HealthCare.gov, small business coverage (SHOP). Accessed 10 Nov 2026.
- HealthCare.gov, grace period definition. Accessed 10 Nov 2026.
Last updated: 10 November 2026 · Educational content; not legal advice.