Office 365 customers who have ADFS installed can do simple filtered MFA using ADFS claim rules

Please continue to use Azure AD Conditional Access for the future as part of your strategy. Please refer the following article for further information about Azure AD Conditional Access.

Conditional access in Azure Active Directory Azure AD Conditional Access

Small Medium sized Office 365 customers may not want to deploy on premises MFA server if the requirements are very simple and scope is limited to Office 365 workloads only.

Small Medium sized Office 365 customers who want to enable MFA may want to skip AppPassword based authentication for rich clients and activesync clients but most want to do MFA when the web based access happens to Office 365 outlook web access or similar web based services.

This solution is mainly for Small Medium sized Office 365 customers.

MFA helps secure user sign-ins for cloud services beyond just a single password. With MFA for Office 365, users are required to acknowledge a phone call, text message, or app notification on their smart phones after correctly entering their passwords. They can sign in only after this second authentication factor has been satisfied.

A form of multi-factor authentication is included with Office 365, but you can also purchase Azure Multi-Factor authentication that includes extended functionality.

Multi-factor authentication is enabled per user. This means that if a user has been enabled for multi-factor authentication and they are attempting to use non-browser clients, such as Outlook with Office 365, they will be unable to do so. An app password allows this to occur. An app password, is a password that is created within the Azure portal that allows the user to by-pass the multi-factor authentication and continue to use their application.

Some customers may find AppPasswords difficult to manage for basic users as it needs another credentials set for users to remember.

Simple solution would be enable MFA only for web based clients when they access from internet initially. For Outlook and ActiveSync clients some customers may want to bypass MFA due to AppPassword requirements if they don't support MFA natively.

Scenario is simple: Customer has Office 365 and Azure AD tenant implicitly. They have ADFS and ADFS proxy to redirect federated domain authentication requests to STS servers first. Then the second will be Azure AD MFA if the client is web browser and if the client is accessing from the internet. They don't have any Azure AD MFA server on premises installed on ADFS as additional authentication provider.


Step 1:
Enable MFA for some Office 365 users.

To set up multi-factor authentication for Office 365
1. Sign in to the Office 365 admin center.
2.In the admin center, choose users and groups > Active Users.
3.In the classic admin center, next to Set Multi-factor authentication requirements, choose Set up.
Set up multifactor authentication.
In the admin center preview, choose More > setup azure multi-factor auth.
Set up multifactor authentication
4.Find the user or users that you want to enable for MFA. In order to see all the users, you might need to change the view at the top.
The views have the following values based on the MFA state of the users:
This is the default state for a new user not enrolled in multi-factor authentication.
The user has been enrolled in multi-factor authentication, but has not completed the registration process. They will be prompted to complete the process the next time they sign in.
The user may or may not have completed registration. If they have completed the registration process then they are using multi-factor authentication. Otherwise, the user will be prompted to completer the process at next sign-in
In non-browser apps (such as …Outlook etc.) will not work until app passwords are created and entered into the non-browser apps.
5.Check the check box next to the names you chose.
Users selected for MFA.
6.This will reveal two options on the right: Enable and Manage user settings. Choose Enable.
7.In the dialog box that opens, choose enable multi-factor auth.

Step 2:
Set SupportsMFA flag to False.
SupportsMFA feature has been enabled for all tenants on Production. This feature changes MFA behavior so that for federated tenants, by default MFA happens on the cloud. The old default behavior was MFA on prem. We have done backfilling to set a flag to true to ensure customers who were using MFA on-prem continue to have MFA on prem. The switch lets tenant admin control where he wants MFA. Switch essentially sets flag SupportsMFA on the trusted realm object. SupportsMFA as true means ESTS must redirect user to ADFS for MFA if MFA is required and MFA claim is missing. SupportsMFA as false means ESTS does MFA natively (again assuming MFA is required and MFA claim is missing). If flag is not set, it is assumed to be false. Users won't be double MFA'd. If MFA was already done at ADFS as part of login, MFA claim will be present and ESTS won't ask for MFA again.

Do MFA on premises:
Set-MsolDomainFederationSettings -DomainName -SupportsMFA $true

Do MFA on cloud:
Set-MsolDomainFederationSettings -DomainName -SupportsMFA $false

Identifying where Current MFA is being done
To determine if the customer has a configuration that forces MFA to be performed at the on-premises Identity Provider:

Ensure the most current version of MSONLINE Powershell Module has been downloaded
Launch MSONLINE powershell
Type Connect-MSOLService
Type Get-MSOLDomainFederationSettings –DomainName

In the Output, look for SupportsMFA value
If SupportsMFA == TRUE, then the CloudIDP expects MFA authentication to happen on-premises
If SupportsMFA == FALSE, then the CloudDIP expects to perform MFA authentication for the principal

$credential = Get-Credential Connect-MsolService -Credential $credential Set-MsolDomainFederationSettings -DomainName "" -SupportsMfa $false Get-MsolDomainFederationSettings -DomainName "" null

Create 2 new custom claim rules in ADFS.

Start the AD FS Management console.
Navigate to Relying Party Trusts and right-click on the OFFICE 365 Relying Party Trust. Select Edit Claim Rules…
Click Add Rule…
From the drop down, select Send Claims Using a Custom Rule and click Next.
Enter any name for the claim rule such “Rule1”.
Under Custom rule: add the following text
Click OK.
Click Add Rule…
From the drop down, select Send Claims Using a Custom Rule and click Next.
Enter any name for the claim rule such “Rule2”.
Under Custom rule: add the following text
Click OK. Click Finish. Close the AD FS Management console.

NOTE: sending the multipleauthn claim is a work-around to skip MFA when the user is inside the network, but the workaround implies that the user has performed MFA on-premises, thus forcing Azure AD to skip MFA.

If the client is not from Internet, then do not perform MFA in Azure AD.

not exists([Type == ""]) => issue(Type = "", Value = ""); null

If the client type is not web browser, then do not perform MFA in Azure AD.

not exists([Type == "", Value =~ "(/adfs/ls)|(/adfs/oauth2)"]) => issue(Type = "", Value = ""); null

You may also want to add another transformation rule to disable MFA for AutoDiscover and ActiveSync.

Exists([Type == "", Value =~"^(Microsoft.Exchange.(Autodiscover|ActiveSync))$"])

=> Issue(Type = "", Value = ""); 

You will notice that only ADFS authentication will be sufficient. MFA will not be performed.

You will notice that ADFS authentication will not be be sufficient. MFA will be performed in Azure AD additionaly.

Hope this helps.