TEFRA is what is known as a cost-sharing Medicaid program. Families whose annual incomes, after allowed deductions, exceed 150 percent of the Federal Poverty Level (FPL) will pay a monthly premium to participate in the TEFRA program. The premium amount is based on a sliding scale by income. Those families whose incomes are below 150 percent FPL will not have a premium.
The premium payments begin the first month after your application has been approved, and the total out-of-pocket cost sharing (your premium) cannot be more than 5 percent of your family’s gross (before taxes) annual income.
How are premiums determined?
Monthly premiums are based on a family’s household size, the number of people living in the household, and the annual income as reported to the Internal Revenue Service. Families can deduct $600 for each dependent child living in the home, along with excess medical and dental expenses as shown on Schedule A of the parents’ federal tax returns.
Chart 1 shows the 150 percent FPL income amount for different household sizes.
|Family Size||150% FPL|
If your income is more than the amount for your household size shown in Chart 1, then your premium is based on a sliding scale shown here in Chart 2.
How are premiums collected?
Premium payments are collected by a monthly automatic bank draft, or you can pay by check or money order. Credit card payments are not available at this time. You choose your payment option when your application is approved. Regardless of the option, you will need to pay the first two months of premiums in advance by check or money order. If you choose the bank draft option, the premium will automatically be withdrawn from your bank account after the first two months premium has been pre-paid.
If you fail to provide the Payment Selection Form, which is provided to you when your application is approved, or if you fail to pay the two-month initial premium payment, then that could cause your child to be ineligible.
If the premium is not paid for three months while your child receives TEFRA, the coverage will end. If that happens, you will have to fill out a new application to determine if your child is eligible for TEFRA.
If your child’s TEFRA coverage has ended within the past 12 months because premiums weren’t paid, those premiums must be paid in full before the child can be re-approved for TEFRA Waiver services.