Gray was placed on the disabled list in August with a strained right forearm and pitched only one inning after returning. Since he didn't pitch in more than 10 innings after August, Gray was an issue for the company that insures players for the event.
"As much as I'd like to participate and represent the A's and Team USA, it's just an unfortunate thing that came up and there's nothing we can really do except try to get ready to start the season," Gray said Sunday, according to the San Francisco Chronicle.
Major League Baseball had pushed for an exception to be made for Gray, who is reported to be healthy this spring.
"It's not up to us or MLB, it's up to the insurance company," Forst told reporters. "MLB pushed the issue and asked the insurance carrier to let him pitch, and they didn't do it."
Forst told reporters that Gray "feels great" and is throwing in spring training.
Gray is the second player to be denied insurance to play in this year's World Baseball Classic.