Upcoming Child Care Policy Changes in Tennessee

Hey Bright Start TN friends!

ICYMI here’s a recap of our March 18 Lunch ‘n’ Learn on Child Care Policy Changes Coming to TN. We featured federal child care policy expert Grace Reef with CED in an engaging and informative interview on new federal policy changes set to take effect next month and how they will affect TN.

Plus we shared how you can provide input on TN’s new “CCDF state plan” for how to spend federal Chile Care & Development Fund child care dollars. Here’s the Tennessee Department of Human Services webpage on that topic. Stay tuned for an email alert from us before March 29 inviting you to sign onto a recommendations memo!

Quick Review / Summary notes

Grace Reef – Senior Outreach Consultant – Committee for Economic Development of the Conference Board (national organization that focuses on issues affecting businesses)
- CCDF Final Rule Overview
  - Childcare and Development Block Grant is a federal law that sends money to every state for childcare
  - States must put together a State Plan every 3 years on July 1st to outline their usage of the program
  - Final Rule issued 3/1/24, goes into effect 4/30/24 (states can apply for a 2-year extension)
    - Lowers costs for families
    - Increases child care options for families
    - Strengthens payment prices for providers
    - Makes enrollment easier and faster for families
- Focus 1: Child Care Affordability
  - Caps family co-pays to 7% of family income (not per child)
    - States are allowed to set lower copays but must not exceed the cap
  - Co-pay waivers
    - Allows states to waive copays for families at/below 150% FPL, w/children with disabilities, w/children in foster/kinship care, experiencing homelessness, or w/a kid enrolled in Head Start/EHS
    - States can waive co-pays for additional categories of families with HHS approval (e.g. teen parents enrolled in school full-time)
  - Consumer Education:
    - Requires states to post current information about co-pays and related policies on their website
      - Based on family size, income, and related policies
- Focus 2: Expanding Parent Choices and Provider Stability
  - Grants & Contracts
    - Requires states to use some grants and contracted slots for children in under-served areas, infants & toddlers, and children with disabilities
    - Contracts can cover things in addition to tuition, such as extra staff, etc
  - Prospective Payments
    - Requires states to pay providers prior to service delivery or at the start of service provision*
    - *retroactive payment can be included in a corrective action plan
  - Subsidy Paid on Enrollment
    - Requires states to pay subsidies based on authorized enrollment, not attendance
    - TN has been doing this since 2019
  - States may pay above the provider’s private rate to increase quality, build supply, or better reflect the cost of providing care
- Focus 3: Expanding Access to Subsidy & Reducing Bureaucracy
  - Presumptive eligibility
    - States can choose to use presumptive eligibility for the subsidy prior to full documentation
  - Eligibility simplification
    - States can choose to use verification from other programs (smart steps, WIC, etc) to prove eligibility
  - Additional Children in Family
    - Allows states to extend eligibility for the first enrolled child to match the timeline of the other eligible children in the family
  - Online Applications
    - Requires states to streamline the eligibility process to minimize parental work disruption
    - Encourages states to use online applications and screening tools
  - Administrative expenditure
    - IT/software expenses are allowable, as well as activities to provide 1:1 application assistance to families
- Miscellaneous
  - Criminal background checks
    - One cannot begin work until the results of background checks return
    - Only states can make eligibility decisions, not individual programs
    - All child pornography charges are disqualifying
  - State reports on provider charges
    - Requires states to conduct a market rate survey and collect information about whether providers are charging in excess of subsidy rates and to report the difference between the private pay rates and subsidy rates
  - Major renovations
    - Defines major renovations by fiscal caps instead of structural project type
What’s Next for TN’s CCDF Plan?
- DHS focus groups with providers
- Constituents can email recommendations
- Public hearings
- Final review and submission in June
Q&A
- Parents who are income-eligible can use subsidies for eligible before/after school care even if they received continuous voucher coverage from 0-5; the funding stream doesn’t have to be the same (ex. Switch from Families First to a different funding stream)