You can use the background blur effect to avoid blurring content in the frame. If you can’t get the special effect that you want with just a frame, then add your rectangle in the same frame, but behind the text, and apply whatever effects you want to it. If the frame is an auto layout to adjust to the text size, then set the rectangle to ignore auto layout and make it scale with the frame using vertical and horizontal constraints.

I don’t think this works for what I am trying to do. So what I want is a box behind text. This box should expand dynamically with the text. I also want to blur this box and change it’s transparency completely separately from the text. So my dilemna is that in order for the box to change with the text, they need to be in an auto layout together. But by doing this any effect given to the box is also given to the text.

This is the effect I want, but if I were to auto layout this, the rectangle would disappear and become a frame, making the blur effect cover the text as well. 

I see what you mean. It’s Figma trying to be smart and thinking you probably want that as a background. Try adding the rectangle after you’ve made the auto layout, and then set it to ignore auto layout.