TEFRA
Home Care for Children

TEFRA 134(a), a provision of the Tax Equity and Fiscal Responsibility Act of 1982, allows states to extend Medicaid coverage to certain disabled children. Also known as the Katie Beckett option, TEFRA is a category of Medicaid that provides care to disabled children in their homes rather than in institutions. To qualify for TEFRA benefits, the child must be disabled according to the Supplemental Security Income (SSI) definition of disability and must meet the medical-necessity requirement for institutional care. Children who live in institutions or who receive extended care in institutions are not eligible in the TEFRA category.

To qualify for TEFRA benefits, the child

  • must be younger than 19
  • cannot have income that exceeds the Long Term Care Medicaid limit
  • cannot have countable resources that exceed $2,000

Parental income and resources are not considered. Only the income and resources of the child are counted. Appropriate medical services must be available to provide care for the child in the home. The estimated cost of care in the home cannot exceed the estimated cost of care for the child in an institution.

Children who receive SSI but lose coverage intermittently due to fluctuating parental income may be eligible for TEFRA benefits in the months they do not receive SSI. The child’s parent or guardian can apply for TEFRA at the DHS office in the child’s county of residence. Applications also are accepted at Arkansas Children’s Hospital and by Children’s Medical Services service team workers.

The TEFRA program is coordinated by the Division of Medical Services. For more information about the program, contact the Division of Medical Services.

TEFRA Premium

Added 3/20/18
TEFRA household with annual income after allowable expenses above 150% of the Federal Poverty Level for their household size will be required to pay monthly premiums. The amount of the premium will be determined based on the custodial parent(s) total gross income. If the custodial parent(s) reports to the resident DHS County Office that household income has decreased significantly or there has been a change in the household size, the premium amount can be reduced after verification of the decreased income amount is provided. Income that fluctuates due to seasonal employment will not affect the monthly premium. The premium can only be adjusted once every six months.

The TEFRA Premium Unit will send premium invoices to TEFRA households. When a TEFRA case is approved, the TEFRA Premium Unit will send a TEFRA Premium Selection Form to the TEFRA beneficiaries’ parent(s)/guardian giving the option of authorizing an automatic bank draft or making quarterly payments in advance. Regardless of payment choice, everyone will be required to pay for the first two months’ premiums by check that is to be sent back to the TEFRA Premium Unit with the completed Payment Selection Form. The bank draft or quarterly payment will begin with the third month after the month of approval. Failure to provide the completed Payment Selection Form or make the two month initial payment will cause the child to be ineligible, and the TEFRA case will be closed after the proper 10 day advance notice. For ongoing cases, if the premium is not paid for three months, a 10 day advance notice will be sent advising if the past due premiums are not paid within the 10 day period, the TEFRA case will be closed.

When a TEFRA case is closed due to non-payment of premiums, a new application must be made before eligibility can resume. Eligibility will be re-determined at the time the new application is made. If the case has been closed less than 12 months because of failure to pay premiums, the past due premiums must be paid in full before the child can be re-approved for TEFRA waiver services. If a case is closed 12 months or more due to failure to pay premiums, payment of the past due premiums will not be required to reopen the case.

Tax Equity and Fiscal Responsibility Act (TEFRA) 1115 (a) Demonstration Waiver Extension Renewal Application

Updated 9/18/17
Arkansas is submitting an extension renewal request to the Centers for Medicare and Medicaid Services (CMS) for a three-year extension renewal of its TEFRA-like 1115 demonstration waiver. A second 30-day comment period has been extended an additional 10 days (September 8 – October 17, 2017.)

All comments MUST be submitted no later than October 17, 2017. Comments may be provided in writing to:
Division of Medical Services
Office of Policy Development
700 South Main Street
PO Box 1437, S-295
Little Rock, AR 72203-1437

or by email to becky.murphy@dhs.arkansas.gov

View Tax Equity and Fiscal Responsibility Act (TEFRA) 1115 (a) Demonstration Waiver Extension Renewal Application.

TEFRA Important Informational Documents

To view or print a document, click a link below.