TEFRA in Minnesota: How Families with Autism Can Access Medical Assistance

TEFRA stands for the Tax Equity and Fiscal Responsibility Act, a federal law passed in 1982. Buried inside it is a small provision — often called the "Katie Beckett" option, after the little girl whose story inspired it — that lets states offer Medicaid to children with significant disabilities without counting their parents’ income or assets. Minnesota chose to adopt this option, and today it is one of the most important and least-understood funding pathways for families raising children with autism in the state.

In everyday language: TEFRA Minnesota autism eligibility means that a child with autism who needs an intensive level of care can qualify for Medical Assistance (MA) as an individual, even if the family earns far more than the standard MA income limit. That single change opens the door to Minnesota’s EIDBI benefit, which is the state’s primary funding source for ABA therapy — as well as dental, medical, mental-health, and equipment benefits under MA.

TEFRA is administered by the Minnesota Department of Human Services (DHS) and processed through your local county human services agency (or a Tribal Nation, if applicable). It is not a waiver, not a scholarship, and not a private program. It is a category of Medical Assistance eligibility. That distinction matters, because approved children get the full package of MA benefits with no waiting list, no lottery, and no annual cap.

Many Minnesota families first hear about TEFRA from another parent, a school social worker, or an EIDBI intake team — rarely from their pediatrician. If your child has an autism diagnosis and you have been told your family "earns too much for Medical Assistance," TEFRA is the option that was almost certainly not explained to you.

ABA therapy is one of the most well-researched interventions for autism, but it is also one of the most expensive services a family can need. Depending on hours, private-pay costs in the Twin Cities metro can reach tens of thousands of dollars each year, as we describe in more detail in our ABA therapy cost Minnesota guide. Even families with strong private insurance often face high deductibles, visit limits, or gaps between what a plan approves and what a child clinically needs.

Minnesota’s EIDBI benefit was designed to solve this problem for Medical Assistance families — but only if a child is enrolled in MA in the first place. That is where many autism families run into a wall. Standard MA has strict income and asset limits that phase out for most working- and middle-class households. Families with a solid job and modest savings can be well over the threshold and still find themselves unable to afford the full scope of ABA their child needs.

TEFRA is Minnesota’s answer to that wall. By evaluating eligibility based on the child’s income (which for a young child is almost always zero) rather than the parents’ income, TEFRA lets middle-income families qualify for MA and, through MA, for EIDBI. That means:

• ABA therapy hours are covered at the intensity your child’s clinical team recommends, without a lifetime dollar cap.
• Family and caregiver training is a covered service under EIDBI, so parents get structured coaching alongside their child’s therapy.
• Wraparound benefits — dental, developmental pediatrics, speech, occupational therapy, mental-health support, and durable medical equipment — come with the same MA card.
• Your private insurance keeps working. MA becomes secondary payer, so anything private insurance covers, it still pays. MA fills the gaps.

For many Minnesota families, TEFRA is the difference between two hours of therapy a week and a full, evidence-based program. It is worth the paperwork.

To qualify for TEFRA Minnesota autism eligibility, a child must meet four criteria. All four must be true; missing any one means the child is evaluated for standard MA instead.

• 1. Age under 19. The child must be younger than 19 at the time of application. Once approved, coverage renews annually until the child ages out of the program, at which point other Medicaid categories may apply.
• 2. Meets Social Security disability criteria. The child must have a disability that meets the Social Security Administration’s definition for children — a medically determinable physical or mental impairment that causes marked and severe functional limitations and is expected to last at least 12 months. An autism spectrum disorder diagnosis alone does not automatically satisfy this test; DHS looks at how the diagnosis affects daily functioning across communication, social interaction, adaptive skills, and behavior.
• 3. Requires an institutional level of care. The child must need a level of care that would ordinarily be provided in a hospital, nursing facility, or intermediate care facility for people with developmental disabilities (ICF/DD). In Minnesota this determination is made through a MnCHOICES assessment completed by a certified assessor. For a child with autism, the assessment looks at supervision needs, safety risks (elopement, self-injury), communication limitations, behavioral support needs, and daily-living skills.
• 4. Would be MA-eligible if only the child’s income counted. Because parental income and assets are excluded, this is a very low bar for most children. A child with no employment income and modest personal savings will meet it.

One important point families often miss: you can hold private insurance and still qualify for TEFRA. Having employer-sponsored health coverage does not disqualify your child — in fact, most TEFRA families keep private insurance as their primary payer and use MA to fill the gaps. The two work together, not against each other.

The TEFRA application process is more involved than a standard MA application, but it is very manageable when you know what to expect. Here is what the pathway looks like for most Minnesota families.

1. Confirm your child has a qualifying diagnosis. You will need clinical documentation of your child’s autism diagnosis, ideally from a developmental pediatrician, neurologist, psychiatrist, or licensed psychologist. If you are still early in the diagnostic process, our signs of autism guide and understanding autism page are good starting points.
2. Submit the Minnesota Health Care Programs Application (DHS-6696). This is the same application used for all Medical Assistance eligibility. You can apply online through MNbenefits, by paper form, or through your county human services agency. On the application, indicate that you are applying under the TEFRA option (sometimes listed as "MA for children with disabilities").
3. Complete the disability determination. The State Medical Review Team (SMRT) at DHS reviews medical records to decide whether your child meets the Social Security disability criteria. You will be asked to provide diagnostic reports, developmental evaluations, IEP or IFSP documents, and clinician letters. It helps to submit as much documentation as possible in the first packet — back-and-forth requests slow the process down.
4. Complete a MnCHOICES level-of-care assessment. A certified county or lead-agency assessor meets with you and your child (in your home, at a clinic, or via telehealth) to evaluate needs across safety, health, communication, behavior, and daily living. This is where the "institutional level of care" question is answered.
5. Receive the eligibility decision. Once SMRT approves the disability determination and MnCHOICES confirms the level of care, your county eligibility worker issues a TEFRA MA determination. Approval is retroactive to the application date, so any qualifying services delivered in the interim can often be billed.
6. Coordinate with your EIDBI provider. With MA active, your child can be enrolled in EIDBI. This typically starts with a Comprehensive Multi-Disciplinary Evaluation (CMDE) — the clinical gateway to EIDBI services. From CMDE to first ABA session is usually a few additional weeks.

Most Minnesota families move through the full pathway in two to four months, though timelines vary based on documentation, county workload, and MnCHOICES availability. If you are working with an experienced EIDBI provider, they can often help you prepare the packet and coordinate with your eligibility worker to keep things moving.

Because TEFRA gives Medical Assistance to a child whose family may earn well above the standard MA income limit, Minnesota charges an income-based parental fee. This fee is not a punishment or a copay for each service — it is a modest monthly contribution that helps sustain the TEFRA program. Understanding how it is calculated up front will save you a lot of anxiety later.

The Minnesota TEFRA parental fee is a sliding scale based on adjusted gross income (AGI) and household size, benchmarked against federal poverty guidelines. In broad strokes:

• Families under a certain multiple of the federal poverty level (FPL) pay zero.
• Families above that threshold pay a percentage of the amount over the threshold, capped at a maximum monthly rate.
• The fee is billed monthly, separate from any medical claims. It is not tied to how many therapy hours your child receives.

To put this in perspective: a Minneapolis family earning around the state median might pay a fee of roughly $50–$150 per month — or in some cases nothing at all. That same family, without TEFRA, might otherwise face thousands of dollars a month in out-of-pocket ABA and related therapy costs. The exact amount depends on your specific numbers, and the DHS TEFRA parental fee schedule is the authoritative reference — it is updated periodically as poverty guidelines change.

A few practical notes families ask about:

• The parental fee is deductible as a medical expense on federal taxes when itemized, subject to normal IRS rules.
• The fee is recalculated annually based on the tax return you submit at renewal.
• Fees do not increase if your child uses more services in a given month. They are strictly income-based.
• Missed fee payments can lead to disenrollment, so keep the payment plan current. If your income changes mid-year, contact your eligibility worker — mid-year adjustments are possible.

For most families we work with, the parental fee is one of the easiest conversations in the process once the numbers are on the table.

TEFRA does not pay for ABA therapy directly. What it does is make your child eligible for Medical Assistance, and MA is what unlocks Minnesota’s Early Intensive Developmental and Behavioral Intervention (EIDBI) benefit. EIDBI, in turn, is the funding source that covers ABA therapy, family training, and coordinated care for children on the autism spectrum. Think of the sequence like this: TEFRA → MA → EIDBI → ABA services.

Once your child’s TEFRA application is approved and MA is active, the EIDBI pathway looks the same as it does for any other MA-enrolled child:

• A Comprehensive Multi-Disciplinary Evaluation (CMDE) is completed by an approved evaluator. The CMDE confirms medical necessity for EIDBI services and recommends a level of intervention intensity.
• An Individual Treatment Plan (ITP) is written by a Qualified Supervising Professional — usually a Board Certified Behavior Analyst. The ITP sets specific goals across communication, social, adaptive, and behavior domains.
• Direct ABA services begin, delivered by Level III providers (Registered Behavior Technicians, in most cases) under BCBA supervision. Services can be delivered at a center-based ABA program, in your home through in-home ABA therapy, at school, or in community settings.
• Family and caregiver training is scheduled alongside direct services and is fully covered.

A common point of confusion: TEFRA and EIDBI are not the same thing. TEFRA is the eligibility door. EIDBI is the service benefit inside the room. Some families arrive at our intake team thinking they need to "apply for TEFRA and EIDBI." In reality, TEFRA is your MA application, and EIDBI enrollment happens once MA is active. Our team helps families work both sides of that sequence in parallel so the calendar does not stretch out longer than it needs to.

One more Minnesota-specific benefit worth mentioning: if your family qualifies for TEFRA, your child’s culturally responsive ABA services, interpretation, and language-matched providers can all be requested as part of the EIDBI plan. TEFRA does not just fund therapy; it funds the right therapy for your family.

Because TEFRA is not widely explained, families often carry outdated or incorrect information about how it works. Here are the myths we hear most often at Dakota Autism Center — and the reality behind each one.

• Myth: "We make too much money to qualify for anything Medicaid-related."
  Reality: Under TEFRA, parental income is not counted for eligibility. A family earning six figures can qualify if the child meets the disability and level-of-care criteria. Income only affects the sliding-scale parental fee, not whether the child is eligible.
• Myth: "TEFRA has a waiting list, like the disability waivers."
  Reality: TEFRA is a Medical Assistance eligibility category, not a waiver. There is no waiting list. Approval times are driven by paperwork and the disability determination, not by a queue.
• Myth: "If I use TEFRA, I have to drop our private insurance."
  Reality: You keep your private insurance. MA becomes secondary. The two coordinate benefits, which usually reduces your out-of-pocket costs across the board rather than replacing your existing coverage.
• Myth: "TEFRA only covers therapy, not medical care."
  Reality: TEFRA gives your child full Medical Assistance benefits — medical, dental, vision, mental-health, developmental, and durable medical equipment. ABA therapy through EIDBI is one benefit among many.
• Myth: "My child’s autism diagnosis is enough to qualify."
  Reality: A diagnosis is necessary but not sufficient. Minnesota looks at how the diagnosis affects daily functioning, and it requires an institutional level-of-care determination through MnCHOICES. Good documentation of your child’s support needs is the single biggest factor in a smooth approval.
• Myth: "TEFRA lasts forever once approved."
  Reality: TEFRA MA renews annually. You will resubmit income documentation each year, and the disability status will be periodically re-reviewed. Renewals are usually much lighter than the initial application.

If you are unsure whether TEFRA is the right pathway for your family, an experienced EIDBI provider can help you think it through in one conversation. Our intake team offers a free eligibility check that walks you through both TEFRA and non-TEFRA options so you can compare paths side by side.