DAR File No. 41985

Workforce Services, Employment Development

Rule R986-700

Child Care Assistance

Notice of Proposed Rule

(Amendment)

DAR File No.: 41985
Filed: 07/31/2017 06:12:08 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of the proposed rule is to bring the state child care subsidy program into compliance with federal requirements, to make client- and provider-side eligibility rules more consistent with one another, to close loopholes in client eligibility and provide for more consistent enforcement of eligibility criteria for clients and providers, to codify existing Department policy where necessary for enforcement purposes, to reduce the administrative burden on providers and the Department by changing some reporting timeframes, and to set forth reporting requirements where necessary.

Summary of the rule or change:

The state's child care subsidy program is funded primarily through the federal Child Care and Development Fund (CCDF). Congress passed a reauthorization of the CCDF (42 U.S.C. 9858 et seq.) in November 2014, and regulations implementing the reauthorized CCDF requirements became final in November 2016 (see 45 CFR Part 98; 81 FR 67438). These regulations imposed new requirements on states receiving CCDF monies. In particular, the regulations require states to provide child care subsidies during certain allowable "temporary change" periods following a change in circumstances for a parent client receiving a subsidy. The regulations also require additional classes of child care providers and their employees to undergo background checks as a condition of being employed in a facility that receives CCDF funding. The present rule sets forth eligibility criteria, reporting requirements, and application procedures for the "temporary change" program. It also codifies the requirements for license-exempt child care providers that receive CCDF funds to obtain background checks for all employees who will have unsupervised access to children as well as family members living in the home or facility where the child care is being provided. The rule also discards a provision allowing the Department to excuse a provider or individual from the background check requirement. In addition, the rule makes other changes that are primarily aimed at making the Department of Workforce Services' enforcement efforts more effective and codifying Department policy where necessary for enforcement. Specifically, the rule provides new standards for client reporting of material changes in their circumstances, spells out when multiple providers may be paid on one client s behalf in a given month, changes the monthly reporting timeframes for providers, removes the threat of an overpayment for providers caring for children that are not in child care by the 15th of each month (so long as the provider timely reports the child's absence), changes the enforcement timeframe for record-keeping by providers to bring it in line with other elements of the existing rule, sets out a certification procedure for providers to follow to certify the monthly attendance of children who receive child care subsidies, and formalizes Department rules regarding the need for an Employer Identification Number or other tax ID number for each provider. Further, the rule makes technical changes to appeal procedures for those seeking to appeal adverse actions. Specifically, the rule clarifies that appeals of licensing-related issues are to be made to the Office of Child Care Licensing, which enforces those requirements, and also formally allows for providers who are removed from approved provider status to appeal that decision in the same manner as those that appeal a provider disqualification. Finally, the rule closes client eligibility pathways that were intended to be closed previously but were not effectively closed in the prior rule, such as eligibility for clients who receive less than eight hours of child care per month and clients who regularly care for their own children as part of their employment. These changes are expected to save funds for the Department and will bring the eligibility requirements more in line with the purposes of the child care program. The Department has rulemaking authority under Section 35A-3-310.

Statutory or constitutional authorization for this rule:

• 42 U.S.C. 9858 et seq.
• Section 35A-3-310
• Section 53A-1b-110
• 45 CFR 98.1 et seq.

Anticipated cost or savings to:

the state budget:

The following changes are not expected to impact the state budget: Defining allowable temporary changes by rule will not impact the state budget because allowable temporary changes are already being approved as per existing Department policy, consistent with the 2016 amendments to 45 CFR 98.21. The changes to the qualification procedure for temporary change child care will not impact the state budget because the changes merely formalize and clarify existing Department procedures for qualifying for and receiving temporary change child care. The criteria for when a subsidy payment may be made to two providers in one month will not impact the state budget because the criteria represent existing Department policy and are simply being clarified. The removal of approval for hourly child care centers to receive child care payments will not impact the state budget because no hourly centers are approved currently, and hourly centers are not eligible to be licensed by the Office of Child Care Licensing. Directing provider appeals of child care licensing-related issues to the Office of Child Care Licensing will not impact the state budget because no hearings have been previously held, and because changing which office administers any future hearing will not affect the cost of such hearing. Providing specific enforcement authority for the three-year provider record-keeping requirement will not impact the state budget because providers were already required to keep records for three years under Section R986-700-706. Allowing for removal of a provider from approved status for failure to provide an Employer Identification Number or other tax ID number will not impact the state budget because the rule change simply codifies and clarifies existing Department policy. Allowing providers to appeal a decision to remove them from approved provider status will not impact the state budget because no provider has ever sought to appeal removal from approved status, because any appeal would have had to be heard previously in any event because of Utah Administrative Procedure Act requirements, and because the Department's experience is that providers that lose their approved status but are not disqualified primarily direct their efforts toward regaining approved status by coming into compliance with Department rules and policies rather than protesting the Department's decision to remove them from approved status. The removal of the Department's authority to exempt covered individuals working in child care centers from exclusion due to missing or disqualifying background check results will not impact the state budget because the Department had never used this authority and had no intention of using it in the future. The change to background check requirements for license-exempt child care programs will not impact the state budget because the cost of the background check is passed on to the provider requesting the check. The following changes may impact the state budget: The minimum requirement of eight hours of care per month for child care eligibility is expected to impact the state budget. The Department expects to save subsidies of approximately $3,000 per month for children who would no longer be eligible for child care subsidy under the new rule because they fall under the eight-hour threshold. The denial of child care subsidy payments to clients who watch their own children in other than temporary or emergency circumstances is expected impact the state budget. The Department expects to save subsidies of approximately $10,000 per month for children who would no longer be eligible for child care subsidy under the new rule because they are regularly cared for by their parents. The changes to client reporting requirements may impact the state budget because of a possible change in the number of overpayments assessed due to the failure of clients to report additional changes in their circumstances as required by the new rules. However, the Department does not anticipate a change in the number of overpayments caused by the new reporting requirements because previous changes to client reporting requirements in 2005 do not appear to have resulted in a change in the number of overpayments. The requirement that allowable temporary changes be reported may impact the state budget because of a possible change in the number of overpayments assessed due to the failure of clients to report additional changes in their circumstances as required by the new rules. However, the Department does not anticipate a change in the number of overpayments caused by the new reporting requirements because there does not appear to have been a change in the number of overpayments caused by the de facto removal of the reporting requirement for temporary change child care when the program was instituted in October 2016. The changes in provider reporting timeframes may have an impact on the state budget because the Department anticipates having fewer overpayments to process with reporting occurring on the 25th as opposed to the 15th of the month. The Department anticipates savings to the state budget but cannot provide an estimate of the anticipated savings on account of the difficulty in determining whether and to what extent providers will report in a timelier manner with a more forgiving reporting deadline. No longer assessing an overpayment when a client meets the eight-hour requirement after the 25th of the month, so long as the provider is timely in its reporting to the Department, may have an impact on the state budget. The Department anticipates potential savings to the state budget in an as-yet-undetermined amount from administering fewer overpayments. Implementing the requirement that providers certify, on a monthly basis, the attendance of children for whom child care subsidies are being received is expected to result in costs of approximately $400 to the Department to implement the software to be used for the certification program. No meaningful costs are anticipated from provider education efforts or notification to providers of noncompliance with certification requirements, since those tasks will be integrated into the existing pattern of communication with providers without additional cost.

local governments:

There are no anticipated costs or savings to local governments because the child care program is administered at the state level and does not rely on local government administration or enforcement.

small businesses:

Most if not all child care providers in the state meet the definition of small businesses, and the impacts or lack of impacts to them from the rule changes are described below. No other category of small business is expected to experience an impact from the rule changes because providers are the only category of small business subject to the child care rules. The following changes are not expected to impact small businesses: The minimum requirement of eight hours of care per month for child care eligibility will not impact small businesses because providers were already subject to an overpayment under Section R986-700-715 for clients who received less than eight hours of care per month. The change in client reporting requirements for changed circumstances will not impact small businesses because a change in what clients have to report does not affect the provider reporting burden. The requirement that allowable temporary changes be reported by clients will not impact small businesses because the change impacts only what clients have to report, not what providers have to report. Defining allowable temporary changes by rule will not impact small businesses because allowable temporary changes are already being approved for child care clients as per existing department policy, consistent with the 2016 amendments to 45 CFR 98.21. The changes to the qualification procedure for temporary change child care will not impact small businesses because the changes merely formalize and clarify existing department procedures for qualifying for and receiving temporary change child care. The criteria for when a subsidy payment may be made to two providers in one month will not impact small businesses because the criteria represent existing department policy and are simply being clarified. The removal of approval for hourly child care centers to receive child care payments will not impact small businesses because no hourly centers are approved currently, and hourly centers are not eligible to be licensed by the Office of Child Care Licensing. Directing provider appeals of child care licensing-related issues to the Office of Child Care Licensing will not impact small businesses because no hearings have been previously held, and because changing which office administers any future hearing will not affect the cost of such hearing. The changes in timeframes for provider reporting will not impact small businesses because the change in timeframes allows additional time for providers to report each month, and because no additional reporting burden is being imposed on providers beyond what they are already required to report to the department. Providing specific enforcement authority for the three-year provider record-keeping requirement will not impact small businesses because providers were already required to keep records for three years under Section R986-700-706. Allowing for removal of a provider from approved status for failure to provide an Employer Identification Number or other tax ID number will not impact small businesses because, per existing department policy, providers were already subject to removal from approved provider status if they failed to provide this information. Allowing providers to appeal a decision to remove them from approved provider status will not impact small businesses because no provider has ever sought to appeal removal from approved status, because any appeal would have had to be heard previously in any event because of Utah Administrative Procedure Act requirements, and because the department's experience is that providers that lose their approved status but are not disqualified primarily direct their efforts toward regaining approved status by coming into compliance with department rules and policies rather than protesting the department's decision to remove them from approved status. The removal of the department's authority to exempt covered individuals working in child care centers from exclusion due to missing or disqualifying background check results will not impact small businesses because the department had never used this authority and has no intention of using it in the future. The following changes may impact small businesses: The denial of child care subsidy payments to clients who watch their own children in other than temporary or emergency circumstances may impact small businesses because providers for these clients will no longer receive subsidies on behalf of these clients' children. The average cost of these lost subsidies is expected to be approximately $8 per provider per month, although that average is skewed by the fact that many providers have no cases that would be affected while those with affected cases would have higher costs. The changes in provider reporting timeframes are expected to result in savings to small businesses, specifically, to providers that will now have additional time to timely report to the department and therefore avoid overpayment assessment. The amount of savings cannot be determined until the department observes how providers respond to having more time to report. No longer assessing an overpayment when a client meets the eight-hour requirement after the 25th of the month, so long as the provider is timely in its reporting to the department, may affect small businesses. Specifically, providers may save an as-yet-undetermined amount from receiving fewer overpayments due to children meeting the eight-hour threshold late in the month. The requirement that providers certify the attendance of all children receiving subsidies on a monthly basis may impact small businesses because providers who fail to certify for three months out of any six-month period will be disqualified from receiving child care subsidies. The department is unable to anticipate how many providers will be disqualified due to this requirement but believes its provider outreach efforts will sufficiently inform providers of the certification requirement and prevent disqualification for all providers except those that willfully fail to engage in the certification process. Previous changes to reporting requirements have not resulted in a substantial increase in disqualifications or other adverse actions against providers. Further, the certification requirement does not take effect immediately, so providers will have time to become accustomed to it before any negative consequences take effect. The certification process will not require any additional record-keeping costs beyond those already imposed by the existing rules. The certification process will be electronic and is expected to take approximately one minute per month; this cost is so minimal that the Department is unable to meaningfully calculate it. The change to background check requirements for license-exempt child care programs is expected to impact the approximately 130 license-exempt child care providers receiving child care subsidies from the department. Per Federal Register guidance (81 FR 67554), the typical license-exempt provider is estimated to have approximately 11 employees who would be subject to the background check requirements, and the cost of a background check is estimated to be $55. The same Federal Register guidance also estimates the annual turnover rate for license-exempt child care providers to be approximately 13.5%. Based on these estimates, the estimated initial cost to a typical license-exempt provider will be approximately $600, with annual costs of approximately $80 for background checks for new staff members and ongoing costs of approximately $120 per year to renew background checks as required every five years. These costs will be higher or lower depending on the number of employees a provider has. This is a cost imposed by changes to federal regulations governing the background check requirements of the child care program (45 CFR 98.43). The department has considered methods of reducing the negative fiscal impact of the rule on small businesses in accordance with Subsection 63G-3-301(6) but cannot establish less stringent requirements, schedules, or deadlines; simplify compliance or reporting requirements; replace design standards with performance standards; or exempt small businesses from the proposed rule. This is because aspects of the rule are required by federal law as a condition of receiving CCDF funding, without which the child care program could not function. Those aspects of the rule that are not mandated by federal law must be applied to small businesses because most if not all of the state?s child care providers meet the definition of a small business, and a rule that did not apply to them would not effect the department's goals in a meaningful way. The department has taken steps to reduce the potential impact on small businesses by placing the burden for notifying a client of the client's potential eligibility for temporary change child care on the department, and by delaying the effective date of the provider attendance certification requirement until 02/01/2018 so that providers will have time to become educated on the certification requirement and how to certify.

persons other than small businesses, businesses, or local governmental entities:

The following changes are not expected to affected persons other than small businesses, businesses, or local government entities ("other affected persons"): Defining allowable temporary changes by rule will not impact other affected persons because allowable temporary changes are already being approved for child care clients as per existing department policy, consistent with the 2016 amendments to 45 CFR 98.21. The changes to the qualification procedure for temporary change child care will not impact other affected persons because the changes merely formalize and clarify existing department procedures for qualifying for and receiving temporary change child care. The criteria for when a subsidy payment may be made to two providers in one month will not impact other affected persons because the criteria represent existing department policy and are simply being clarified. The removal of approval for hourly child care centers to receive child care payments will not impact other affected persons because no hourly centers are approved currently, and hourly centers are not eligible to be licensed by the Office of Child Care Licensing. Directing provider appeals of child care licensing-related issues to the Office of Child Care Licensing will not impact other affected persons because no hearings have been previously held, and because changing which office administers any future hearing will not affect the cost of such hearing. The changes in timeframes for provider reporting will not impact other affected persons because the change applies only to provider reporting, not client reporting. Providing specific enforcement authority for the three-year provider record-keeping requirement will not impact other affected persons because the record-keeping requirement applies only to providers, not clients. The requirement that providers certify child attendance on a monthly basis will not impact other affected persons because only providers and not clients are required to certify in the manner being prescribed by the rule. Allowing for removal of a provider from approved status for failure to provide an Employer Identification Number or other tax ID number will not impact other affected persons because the rule change simply codifies and clarifies existing department policy. Allowing providers to appeal a decision to remove them from approved provider status will not impact other affected persons because clients are not parties to provider appeals. The change to background check requirements for license-exempt child care programs will not impact other affected persons because clients are not covered by the background check requirements. The removal of the department's authority to exempt covered individuals working in child care centers from exclusion due to missing or disqualifying background check results will not impact other affected persons because the department had never used this authority and had no intention of using it in the future. The following changes may impact other affected persons: The changes to the changed circumstances a client is required to report to the department may impact other affected persons because clients who fail to follow these requirements may be assessed an overpayment by the department. However, previous changes to reporting requirements in 2005 do not appear to have resulted in an increased number of overpayments, so the department does not anticipate an increase in the number of overpayments from the proposed change. The department does not anticipate any impact from the reporting process itself because clients are already required to regularly report changes in circumstances to the department. The requirement that allowable temporary changes be reported may impact other affected persons because clients who fail to follow these requirements may be assessed an overpayment by the department. However, the department does not anticipate a change in the number of overpayments caused by the new reporting requirements because there does not appear to have been a change in the number of overpayments caused by the de facto removal of the reporting requirement for temporary change child care when the program was instituted in October 2016.

Compliance costs for affected persons:

The compliance costs consist of the provider certification process. This process will be electronic and is expected to take approximately one minute per month; this cost is so minimal that the Department is unable to meaningfully calculate it.

Comments by the department head on the fiscal impact the rule may have on businesses:

I. WHETHER A FISCAL IMPACT TO BUSINESS IS EXPECTED AS A RESULT OF THE PROPOSED RULE AND, IF SO, A DESCRIPTION OF WHY: The proposed rule may result in a fiscal impact to some businesses. Child care providers whose clients currently receive subsidy payments to watch their own children may lose business as a result of that subsidy no longer being available. Providers are expected to save money as a result of the changes to the Department's reporting timeframes because there may be fewer overpayments assessed against providers who report timely. Providers will see at least some minimal impact from the requirement that they certify attendance for subsidized children on a monthly basis. License-exempt providers will be impacted by the requirement to obtain background checks for all employees and household members. II. AN ESTIMATE OF THE TOTAL NUMBER OF BUSINESS ESTABLISHMENTS IN UTAH EXPECTED TO BE IMPACTED: The number of businesses that are impacted by the proposed rule is difficult to predict because some of the potential impacts are not certain to occur. There are approximately 130 license-exempt providers that will now have to obtain background checks as a condition of receiving CCDF funding. The Department estimates, at most, approximately 70 to 80 providers will be impacted by the loss of subsidy on behalf of clients who will no longer be eligible under the proposed rule. III. AN ESTIMATE OF THE SMALL BUSINESS ESTABLISHMENTS IN UTAH EXPECTED TO BE IMPACTED: The proposed rule will likely only have a fiscal impact on small businesses because small businesses constitute most if not all the child care providers in the state. IV. A DESCRIPTION OF THE SOURCES OF COST OR SAVINGS AS WELL AS THE EXPECTED NET SAVINGS OR COST TO BUSINESS ESTABLISHMENTS AND SMALL BUSINESS ESTABLISHMENTS AS A RESULT OF THE PROPOSED RULE OVER A ONE-YEAR PERIOD, IDENTIFYING ONE-TIME AND ONGOING COSTS: The background check requirement is expected to cost the typical license-exempt provider approximately $600 as a fixed cost for background checks for existing employees, and approximately $200 per year to renew background checks or provide checks for new employees. The denial of child care subsidy payments to clients who watch their own children in other than temporary or emergency circumstances is expected to cost affected providers approximately $100 per month until the child care slot vacated by a lost client is filled. Any savings from the absence of overpayments due to changes in the reporting timeframes are expected to be ongoing, although as noted above any such savings cannot be determined at this point. V. DEPARTMENT HEAD'S COMMENTS ON THE ANALYSIS: The primary cost of the rule is expected to come in the form of the background check requirement for license-exempt providers, which is a federally imposed requirement over which the Department has no control. The Department expects that costs from the loss of no-longer-subsidized child care clients will be minor and limited in duration because child care providers are typically able to fill vacated slots with other clients.

Jon Pierpont, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Workforce Services
Employment Development
140 E 300 S
SALT LAKE CITY, UT 84111-2333

Direct questions regarding this rule to:

• Nathan White at the above address, by phone at 801-526-9647, by FAX at , or by Internet E-mail at nwhite@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

09/14/2017

This rule may become effective on:

09/21/2017

Authorized by:

Jon Pierpont, Executive Director

R986. Workforce Services, Employment Development.

R986-700. Child Care Assistance.

R986-700-702. General Provisions.

(1) CC is provided to support employment for U.S. citizens and qualified aliens authorized to work in the U.S. Child care for approved education and training activities,[and] job search, or for an approved temporary change as defined in R986-700-703 may be authorized in accordance with rule.

(2) CC is available, as funding permits, to the following clients who are employed or are participating in activities that lead to employment:

(a) parents;

(b) specified relatives; or

(c) clients who have been awarded custody or appointed guardian of the child by court order and both parents are absent from the home. If there is no court order, an exception can be made on a case by case basis in unusual circumstances by the Department program specialist.

(3) Child care is provided only for children living in the home and only during hours when neither parent is available to provide care for the children. To be eligible, the child must have a need for at least eight hours of child care per month as determined by the Department.

(4) If a client is eligible to receive CC, the following children, living in the household unit, are eligible:

(a) children under the age of 13; and

(b) children up to the age of 18 years if the child;

(i) meets the requirements of rule R986-700-717, and/or

(ii) is under court supervision.

(5) Clients who qualify for child care services will be paid if and as funding is available. When the child care needs of eligible applicants exceed available funding, applicants will be placed on a waiting list. Eligible applicants on the list will be served as funding becomes available. Special needs children, homeless children and FEP or FEPTP eligible children will be prioritized at the top of the list and will be served first. "Special needs child" is defined in rule R986-700-717.

(6) Payments are issued monthly based on a client's eligibility for services in that month. The amount of CC might not cover the entire cost of care.

(7) A client is only eligible for CC if the client has no other options available for child care. The client is encouraged to obtain child care at no cost from a parent, sibling, relative, or other suitable provider. If suitable child care is available to the client at no cost from another source, CC cannot be provided.

(8) CC can only be provided by an eligible provider approved by the Department and will not be provided for illegal or unsafe child care. Illegal child care is care provided by any person or facility required to be licensed or certified but where the provider has not fulfilled the requirements necessary to obtain the license or certification.

(9) CC will not be paid to a client for the care of his or her own child(ren) when the client is working in a residential setting. CC may be approved where the client is working for an approved child care center, does not regularly watch[es] his or her own children [other than her own]at the center, and does not have an ownership interest in the child care center. CC will not be paid to a client for the care of his or her own child(ren) if the client is a stockholder, officer, director, partner, manager or member of a corporation, partnership, limited liability partnership or company or similar legal entity providing the CC.

(10) Neither the Department nor the state of Utah is liable for injuries that may occur when a child is placed in child care even if the parent receives a subsidy from the Department.

(11) Foster care parents receiving payment from the Department of Human Services are not eligible to receive CC for the foster children.

(12) Once eligibility for CC has been established, eligibility must be reviewed once every twelve months. The review is not complete until the client has completed, signed and returned all necessary review forms to the local office. All requested verifications must be provided at the time of the review. If the Department has reason to believe the client's circumstances have changed, affecting either eligibility or payment amount, the Department may reduce or terminate CC even if the certification period has not expired.

 

R986-700-703. Client Rights and Responsibilities.

In addition to the client rights and responsibilities found in R986-100, the following client rights and responsibilities apply:

(1) A client has the right to select the type of child care which best meets the family's needs.

(2) If a client requests help in selecting a provider, the Department will refer the client to the local Care About Child Care agency.

(3) A client is responsible for monitoring the child care provider. The Department will not monitor the provider.

(4) A client is responsible to pay all costs of care charged by the provider. If the child care assistance payment provided by the Department is less than the amount charged by the provider, the client is responsible for paying the provider the difference.

(5) The only changes a client must report to the Department within ten days of the change occurring are:

(a) that the household's gross monthly income exceeds the percentage of the state median income as determined by the Department in R986-700-710(3);

(b) that the client is no longer in an approved training or educational program;

(c) if the client's schedule changes so that child care is no longer needed during the hours of approved employment and/or training activities;

(d) that the client does not meet the minimum work requirements of an average of 15 hours per week or 15 and 30 hours per week when two parents are in the household and it is expected to continue;

(e) the client is separated from his or her employment;

(f) a change of address;

(g) any of the following changes in household composition; a parent, stepparent, spouse, or former spouse moves into the home, a child receiving child care moves out of the home, or the client gets married;[or]

(h) a change in the child care provider, including when care is provided at no cost;[.]

(i) when the child has stopped attending child care or has not attended child care for at least eight hours during the month for which CC was authorized;

(j) a change in child custody, visitation, or parent - time, including any regular periods of extended change in visitation or parent - time such as extended holidays or vacations with a non - custodial parent;

(k) a change in the total cost of care for a client that is based on a change in a person(s) paying some or all of the total cost of care; and

(l) any other changes that would affect a client's eligibility for ESCC as described in rule R986-700-709.

(6) [A client is not required to report certain allowable temporary changes, as defined in Department policy, ]Certain reportable changes are considered allowable temporary changes when the circumstances are expected to last three months or less.

(a) The following are allowable temporary changes:

(i) Time-limited absences from work due to medical or other emergency, such as maternity leave, bed rest, or temporary medical issues of the client or an immediate family member living in the client's home if the client is responsible for the immediate family member's care;

(ii) Temporary fluctuations in earnings or hours, such as summer break for teachers or seasonal hours changes for IRS employees, that would otherwise have the effect of causing the client to fail to meet the minimum work requirements for eligibility;

(iii) Scheduled holidays or breaks in a client's educational training schedule.

(b) [However, temporary changes will be acted upon when they are known to the Department. Temporary changes lasting more than three months must be reported to the Department following general reporting requirement time frames. ]A client must have received an ESCC payment [and met the work requirement for a minimum of 30 days]in the month prior to or the month of the temporary change before receiving a temporary change payment or a subsequent temporary change payment. The Department shall inform a client whose eligibility for ESCC ends due to a change in circumstances of the client's possible eligibility for temporary change child care. To receive temporary change child care, the client must request such child care within ten days of receiving a notification of possible eligibility from the Department, comply with Department procedures regarding eligibility verification, and continue to use child care during the temporary change period. Temporary change child care may not be received for more than three consecutive months.

(7) If a material change which would result in a decrease in the amount of the CC payment is reported within 10 days, the decrease will be made effective beginning the next month and sums received in the month in which the change occurred will not be treated as an overpayment. If it is too late to make the change to the next month's CC payment, the client is responsible for repayment even if the 10 days for reporting the change has not expired. If the client fails to report the change within 10 days, the decrease will occur as soon as the Department learns of the change and the overpayment will be assessed back to the date of the change.

(8) If an overpayment is established and it is determined that the client was at fault in the creation of the overpayment, the client must repay the overpayment to the Department. In some situations, the client and provider may be jointly liable. In the case of joint liability, both parties can be held liable for the entire overpayment.

(9) The Department is authorized to release the following information to the designated provider:

(a) limited information regarding the status of a CC payment including that no payment was issued or services were denied;

(b) the date the child care subsidy was issued;

(c) the subsidy amount for that provider;

(d) the copayment amount;

(e) information available in the Department Provider Portal. The Provider Portal provides a provider with computer access to limited, secure information;

(f) the month the client is scheduled for review;

(g) the date the client's application was received; and

(h) general information about what additional information and/or verification is needed to approve CC such as the client's work schedule and income.

(10) If a client uses a child care provider at least eight hours [by the 15th of]in the calendar month, and that provider has been paid for that month, the Department will not pay another provider for child care for the rest of that month , even if the client changed providers[. However, if it is the provider that decided not to provide care and the client is required to change providers, the Department may pay that second provider for a portion of that same month.], unless the maximum subsidy payment amount for the month will not be exceeded by paying the second provider and one of the following exceptions also applies:

(a) The initial provider is no longer providing child care, is no longer an approved provider, or has been disqualified by the Department;

(b) The client relocates his or her residence and it is no longer reasonably feasible to continue using the initial provider due to travel time or distance;

(c) There is a substantial change in the days or times of day when child care is needed, such as a change in the timing of the shifts the client is working, that cannot be accommodated by the initial provider; or

(d) The Department determines a change in child care providers is necessary due to an endangerment finding for the child. The Department may, in its discretion, approve payment to a second provider due to an endangerment finding even if the maximum subsidy payment amount would be exceeded.

 

R986-700-705. Eligible Providers and Provider Settings.

(1) The Department will only pay CC to clients who select eligible providers. All eligible providers, including providers who receive CC grants from the Department, must meet all Child Care Development Fund (CCDF) requirements. The only eligible providers are:

(a) providers regulated through Department of Health Child Care Licensing (CCL):

(i) licensed homes;

(ii) licensed child care centers, except hourly centers; and

(iii) homes with a residential certificate.

(b) license exempt providers who are not required by law to be licensed and are either;

(i) license exempt centers as defined in R430-8-3. Programs or centers must have a current letter of exempt status from CCL; or

(ii) DWS Family, Friend and Neighbor providers (FFN) as approved by CCL. The requirements for FFN approval are provided in subsection (3) of this section and in Department policy.

(2) The following providers are not eligible for receipt of a CC payment:

(a) a provider living in the same home as the parent client unless the provider is caring for a child who has special needs who cannot be otherwise accommodated;

(b) a sibling of the child living in the home can never be approved, even for a special needs child;

(c) a parent, foster care parent, stepparent or former stepparent, even if living in another residence;

(d) undocumented aliens;

(e) persons under age 18;

(f) a provider providing care for the child in another state;

(g) a sponsor of a qualified alien client applying for child care assistance;

(h) a provider who has committed an IPV as a provider, or as a recipient of any funds from the Office of Child Care including subsidy and grant payments, as determined by the Department or by a court. The disqualification for an IPV will remain in effect until the IPV disqualification period has run, any resulting overpayment has been satisfied, and the provider is otherwise eligible;

(i) any provider disqualified under R986-700-718;

(j) a provider who does not provide necessary information or cooperate with a Department investigation or audit or is not an approved provider; or

(k) a provider whose child care subsidies are being taken pursuant to an IRS levy or garnishment.

(3) FFN providers must comply with all CCDF and Department requirements and will not be approved for a CC subsidy payment unless all of the following requirements have been successfully completed and verification has been provided to CCL:

(a) complete, sign and submit an application to CCL;

(b) provide a copy of a certificate of completion of New Provider orientation and agree to comply with Department requirements and policy, including ongoing training, as explained in the orientation;

(c) pass a home inspection as provided in Department policy;

(d) complete an infant/child CPR training;

(e) complete first aid training; and,

(f) the provider and all individuals 12 years old or older living in the home where care is provided must submit to and pass a background check as provided in R986-700-751 et seq.

(4) A FFN provider must also comply with all Department policy including abiding by the ratio requirements.

(5) FFN approval must be renewed annually. Renewal information is found in Department or CCL policy. The FFN CC Provider must complete an announced inspection and show compliance with all regulations at least 30 calendar days before the expiration date of the current approval.

(6) FFN CCL provider approval is for the provider and the location(s) and is not assignable or transferable.

(7) [A FFN provider or applicant has a right to file an appeal when an adverse action has been taken against him or her in regards to FFN approval status or health and safety compliance. Prior to filing an appeal, the provider or applicant must request a review with the CCL manager. If unresolved after that review, the provider may file an appeal by requesting a fair hearing with DWS in accordance with R986 - 100 - 123 et seq.]If a program or provider is not subject to licensing requirements, and the program or provider receives or wishes to receive CCDF funds but has had adverse action taken against it by CCL regarding DWS approval status or health and safety compliance, the program or provider's appeal shall be made to CCL according to CCL's procedures. An appeal based on adverse action by the Department shall be made to the Department in accordance with R986-100-123 et seq.

 

R986-700-706. Provider Rights and Responsibilities.

(1) Providers assume the responsibility to collect copayments and any other fees for child care services rendered. Neither the Department nor the state of Utah assumes responsibility for payment to providers.

(2) A provider may not charge clients receiving a CC subsidy a higher rate than their customers who do not receive a CC subsidy.

(3) Providers may retain the full monthly subsidy payment so long as at least eight hours of care were provided [by the 15th of]during the month and the provider is otherwise in compliance with Department rules and policies. The subsidy payment is to support an eligible client's monthly employment and training activities and allows for temporary absences and unforeseen circumstances. Having a child only attend one day per month or sporadically to receive a child care payment is a misuse of funds and will result in an overpayment and possible child care disqualification. Additionally, the subsidy payment is intended to be used to cover the provider's business expenses during the month for reserving the slot(s) and shall not be used to cover the client's out of pocket expenses, copayments, or carried forward for future months of service. Providers who choose not to apply the funds as required will be subject to an overpayment and possible child care disqualification.

(4) Providers must keep accurate records of subsidized child care payments, and time and attendance. The Department has the right to investigate child care providers and audit their records. Audits and investigations may be performed by a person or entity under contract with the Department. Time and attendance records for all subsidized clients must be kept for at least three years.

(5) Providers must provide initial verification information to determine eligibility. Providers must also cooperate with an investigation or audit to determine ongoing eligibility or if eligibility was correctly determined. Cooperation includes providing information and verification and returning telephone calls or responding to emails from Department employees or other persons authorized by the Department to obtain information such as an employee of ORS in a timely manner. "A timely manner" is usually considered to be ten business days for written documentation and two business days to return a phone call or email request. Providing incomplete or incorrect information will be treated the same as a failure to provide information if the incorrect or insufficient information results in an improper decision with regard to the eligibility. Failure to disclose a material fact that might affect the eligibility determination can also lead to criminal prosecution. If a provider fails to cooperate with an investigation or audit, provide any and all information or verification requested, or fails to keep records for [one year]three years without good cause, the provider will no longer be an approved provider. Good cause is limited to circumstances where the provider can show that the reasons for the delay in filing were due to circumstances beyond the provider's control or were compelling and reasonable. The period the provider will not be an approved provider will be from the date the information or verification was due until when it is received by the Department.

(6) If a provider accepts payment from funds provided by the Department for services which were not provided, the provider is responsible for repayment of the resulting overpayment and there may be a disqualification period and/or criminal prosecution.

(7) CCL will keep a list of all providers that have been disqualified as a provider or against whom a referral or complaint is received.

(8) All providers, except FFN providers as defined in R986-700-705(1)(b)(ii), are required to report their monthly, full-time child care rates to the local Care About Child Care agency. All providers must also report the rate for each individual child to the Department if the amount is less than the rate reported to Care About Child Care. Failure to report reduced rates may result in an overpayment.

(9) Providers are required to access the Provider Portal at jobs.utah.gov/childcare and:

(a) submit and manage bank account information;

(b) read and agree to the terms and conditions contained in the Provider Guide and in the Portal;

(c) view child care payment information;

(d) manage Provider Portal user access to ensure only those users with authority to make changes can do so. The provider is liable for all changes made and information provided through the Provider Portal;

(e) report the following changes within 10 days, or by the 25th of the month, whichever is sooner:

(i) a reduced or part-time rate for an individual child in care, as applicable. This includes reporting any rate changes or updates that occur for each child once a rate has been submitted in the portal;

(ii) a child is no longer in child care;

(iii) a child [was not]is not expected to be in child care [during that]the following month;

(iv) that the provider received a greater subsidy payment amount than what was charged to the client for the month of service. Excess subsidy funds cannot be used to cover outstanding balances, copayments, or future services. The provider should notify the Department and the difference will either be deducted from the next month's subsidy payment or the funds must be returned to the Department;

(v) that a child has not attended for [less than]at least eight hours by the [1]25th of the month, [payment for the month was received and the child is not expected to return]regardless of whether the child attends or is expected to attend for at least eight hours following the 25th of the month; [or]and

(vi) a change in financial institution account information for direct deposit.

(f) Effective February 1, 2018, between the 25th of each month and the end of the month, a licensed provider shall certify, in a manner specified by the Department, that the licensed provider has reviewed each child's attendance and reported any reportable changes in each child's attendance, including future changes known or expected by the provider.

(10) Providers must submit a W-9 Form, Federal Employer Identification Number (EIN) or Social Security Number via the DWS Provider Portal, if required by the Department, and a 1099 will be issued annually. The Federal EIN or Social Security Number must be provided within 30 days of receipt of the first subsidy payment from the Department. Failure to submit this information shall result in the provider being removed from approved provider status .

(11) A provider who provides services for any part of a month and then terminates services with the client/child during the month, must reimburse the Department for the days when care was not provided. However, if it was necessary to remove the child from care because the child or others were endangered, and the incident was reported to CCL or local authorities, the Department may waive repayment.

 

R986-700-715. Overpayments.

(1) An overpayment occurs when a client or provider received CC for which they were not eligible including when a provider accepts payment but does not provide care. If the Department fails to establish one or more of the eligibility criteria and through no fault of the client, payments are made, it will not be considered to have been an overpayment if the client would have been eligible and the amount of the subsidy would not have been affected.

(2) Even if CC funds are authorized by the Department, a CC provider cannot receive and retain funds for any month during which no CC services were provided. If authorized or unauthorized subsidy funds received and retained by a provider but no CC services were provided during the month, the provider will be required to reimburse the Department for the excess funds and may be disqualified from receipt of further CC subsidy funds as provided in R986-700-718. A provider is considered to have retained subsidy funds if the provider knew or should have known the child would not receive services that month and fails to notify the Department within ten days , or if the provider does not notify the Department [within ten days of the end]by the 25th of the month when the child was not in care at least eight hours that month. If the client does not use at least eight hours of child care by the [1]25th of the month but uses at least eight hours of child care after the [1]25th of the month, it may result in a partial overpayment for that month. The partial overpayment may not be assessed if the provider reports by the 25th of the month that a child was not in care during that month or stopped attending care during that month and the child then attends for eight hours that month after the change has been reported.

(3) In the event that excess funds were issued for the month of service, the payment cannot be used to cover the client's out of pocket expenses, copayments, or carried forward for future months of service with a provider. The payment must be returned to the Department or, if possible, the payment for the following month may be reduced to offset the over-issuance. An overpayment may also occur when a provider receives a greater subsidy payment amount than the client was charged for the month of service.

(4) All CC overpayments must be repaid to the Department.

(a) Client overpayments may be deducted from ongoing CC payments for clients who are receiving CC. If the Department is at fault in the creation of an overpayment, the Department will deduct $10 from each month's CC payment unless the client requests a larger amount.

(b) Provider overpayments. If a provider does not repay any outstanding overpayment within 30 days of notice of the overpayment, the Department will commence collection procedures which may include recouping the overpayment by deducting a portion of the overpayment from ongoing child care subsidies from the Department. This is true even if the child or client no longer receives child care from the provider. The decision whether to recoup the overpayment from ongoing child care payments or to commence collection procedures lies with the Department and not the provider or client/s.

(i) If the Department elects to recoup the overpayment from ongoing child care payments, and the overpayment is less than $1,000, the Department will recoup the full amount within 90 days. If the overpayment is more than $1,000 the Department will recoup the amount within six months. If the recoupment presents a hardship because it is more than 50% of the provider's ongoing monthly subsidy amount, the provider can contact the Department to discuss alternative arrangements for repayment.

(ii) If a provider stops providing care and has a balance due on an overpayment, and seeks approval to become a provider at a later date, approval cannot be granted until the overpayment is paid in full even if any disqualification period has expired.

(5) CC will be terminated if a client fails to cooperate with the Department's efforts to investigate alleged overpayments.

(6) If the Department has reason to believe an overpayment has occurred and it is likely that the client will be determined to be disqualified or ineligible as a result of the overpayment, payment of future CC may be withheld, at the discretion of the Department, to offset any overpayment which may be determined.

(7) A CC provider may appeal an overpayment as provided for public assistance appeals in rule R986-100. Any appeal must be filed in writing within 30 days of the date of the notice of agency action establishing the overpayment.

(8) If a provider or individual facility fails to enter into a payment plan to repay the overpayment or abide by the terms of the payment plan for 12 consecutive months, the provider will be taken off the approved provider list until all overpayments are paid in full or the arrearage on the payment plan is brought current. This is true even if there is only one overpayment.

 

R986-700-718. Provider Disqualification; Removal From Approved Provider Status.

(1) If a parent or provider commits an IPV, as defined in R986-100-117, the parent or provider will be responsible for repayment of the overpayment, if there is one, and will be disqualified from receipt of any funds from the Office of Child Care, including subsidy funds, grants and funds as a provider or as a parent:

(a) for a period of one year for the first IPV;

(b) for a period of two years for the second IPV; and

(c) for life for the third IPV.

(2) If the overpayment resulted from parent or provider fault not amounting to fraud or an agency error, the client and or provider will be responsible for repayment of the overpayment. There is no disqualification or ineligibility period for a fault overpayment.

(3) Effective February 1, 2018, a licensed provider that, in any six-month period, fails three times to timely certify attendance during the monthly certification period as required in rule R986-700-706(9)(f) shall be disqualified.

(4) A CC provider may appeal an overpayment, removal from approved provider status, or disqualification as provided for public assistance appeals in rule R986-100. Any appeal must be filed in writing within 30 days of the date of the notice of agency action establishing the overpayment or disqualification. A provider who has been disqualified or removed from approved provider status may not continue to receive CC subsidy funds pending appeal[until a decision is issued by the ALJ]. The disqualification period will take effect even if the provider files an appeal of the decision issued by the ALJ. If the provider fails to file an appeal within 30 days of the date of the notice of agency action and the Department issues a default decision, and the provider files a request to set aside the default, CC subsidy funds will not continue unless or until the default is set aside by the ALJ. If the request to set aside the default is denied, the provider will be disqualified pending appeal of the denial to set aside the default.

(5) A provider is ineligible for CC subsidy funds after a disqualification until all overpayments established in conjunction with the disqualification have been paid in full even if the disqualification period has ended.

(6) A provider that intentionally breaches any program rule as provided in R986-100-117, except as provided in subsection (1) of this section, or violates CC rule R986-700-706(2) through (5) or who assumes a client's identity in order to gain access to client information or payment of Department funds will be disqualified for one year for the first offense, two years for the second offense and for life for the third offense.

(7) All disqualification periods run concurrently.

(8) A disqualification issued to a provider, including a child care center, under this subsection will follow both the provider, the principal provider, and any successor center or provider.

(a) A "successor" provider, including a child care center, that acquires the business or acquires substantially all of the assets of the provider or child care center. This includes a provider who changes from one status to another like a provider who was disqualified as a licensed family provider who then changes to be a license exempt provider.

(b) "Acquired" means to come into possession of, obtain control of, or obtain the right to use the assets of a business by any legal means including a gift, lease, repossession or purchase. For purposes of succession, a purchase through bankruptcy court proceedings where assets are being liquidated is not considered an acquisition, if the court places restrictions on the transfer of liabilities to the purchaser. It is not necessary to purchase the assets in order to have acquired the right to their use, nor is it necessary for the predecessor to have actually owned the assets for the successor to have acquired them. The right to the use of the asset is the determining factor.

(c) "Assets" are commonly defined to include any property, tangible or intangible, which has value. Assets may also include the acquisition of the name of the business, customers, accounts receivable, patent rights, goodwill, employees, or an agreement by the predecessor not to compete.

(d) "Substantially all" means acquisition of 90 percent or more of all of the predecessor's assets.

(f) A "principal" is the individual or individuals who were responsible for the day to day business of the child care center provided that individual had an ownership interest in the center. An ownership interest includes a shareholder, director or officer of a corporation and a partner, member or manager of a limited liability partnership or company.

 

R986-700-751. Background Checks.

(1) Sections R986-700-751 through 756 apply to child care providers identified in Utah Code Section 35A-3-310.5(1) and license-exempt providers and other programs not subject to CCL requirements that wish to receive CCDF funds.

(2) [The provider and each person age 12 years old or older living in the household where the child care is provided must submit to a background check.]The following persons must submit to a background check:

(a) The provider;

(b) Each person age 12 years old or older who is living in the household where the child care is provided; and

(c) Each person who is employed or volunteering at the facility where the child care is provided, if the person's activities involve care or supervision of children or unsupervised access to children.

(3) If child care is provided in the child's home, a background check must be done on each person age 12 years old or older living in the child's home who is not on the client's child care case.

(4) A client is not eligible for a subsidy if the client chooses a provider and [the provider or any person age 12 years old or older living in the household where the child care is provided]any person described in Subsection (2) above has:

(a) a supported finding of severe abuse or neglect by the Department of Human Services, a substantiated finding by a Juvenile court under Subsection 78-3a-320 or a criminal conviction related to neglect, physical abuse, or sexual abuse of any person; or

(b) a conviction for an offense as identified in R986-700-754; or

(c) an adjudication in juvenile court of an act which if committed by an adult would be an offense identified in R986-700-754.

 

R986-700-752. Definitions.

Terms used in the section R986-700-751 through 756 are defined as followed:

(1) "Convicted" includes a conviction by a jury or court, a guilty plea or a plea of no contest, an adjudication in juvenile court or an individual who is currently subjected to a deferred judgment and sentence agreement, a deferred prosecution agreement, a deferred adjudication agreement, or a plea in abeyance.

(2) "Covered Individual" means:

(a) each person providing child care;

(b) all individuals 12 years old or older residing in a residence where child care is provided ;

(c) each person who is employed or volunteering at the facility where the child care is provided, if the person's activities involve care or supervision of children or unsupervised access to children .

(3) "Supported" means a finding by the Utah Department of Human Services (DHS), at the completion of an investigation by DHS, that there is a reasonable basis to conclude that one or more of the following severe types of abuse or neglect has occurred:

(a) if committed by a person 18 years of age or older;

(i) severe or chronic physical abuse;

(ii) sexual abuse;

(iii) sexual exploitation;

(iv) abandonment;

(v) medical neglect resulting in death, disability, or serious illness;

(vi) chronic or severe neglect; or

(vii) chronic or severe emotional abuse

(b) if committed by a person under the age of 18:

(i) serious physical injury, as defined in Subsection 76-5-109(1)(f) to another child which indicates a significant risk to other children, or

(ii) sexual behavior with or upon another child which indicates a significant risk to other children.

 

R986-700-754. Exclusion from Child Care Due to Criminal Convictions.

(1) As required by Utah Code Subsection 35A-3-310.5(4), if the criminal conviction was a felony, or is a misdemeanor that is not excluded under paragraphs (2) or (3) below, the covered individual may not provide child care or reside in a home where child care is provided.

(2) As allowed by Utah Code Subsection 35A-3-310.5(5), the Department hereby excludes the following misdemeanors and determines that a misdemeanor conviction listed below does not disqualify a covered individual from providing child care:

(a) any class B or C misdemeanor offense under Title 32A, Alcoholic Beverage Control Act, except for 32A-12-203, Unlawful sale or furnishing to minors;

(b) any class B or C misdemeanor offense under Title 41, Chapter 6a, Traffic Code except for 41-6a-502, Driving under the influence of alcohol, drugs, or a combination of both or with specified or unsafe blood alcohol concentration, when the individual had a child in the car at the time of the offense;

(c) any class B or C misdemeanor offense under Title 58, Chapter 37, Utah Controlled Substances Act;

(d) any Class B or C misdemeanor offense under Title 58, Chapter 37a, Utah Drug Paraphernalia Act;

(e) any class B or C misdemeanor offense under Title 58, Chapter 37b, Imitation Controlled Substances Act;

(f) any class B or C misdemeanor offense under Title 76, Chapter 4, Inchoate Offenses, except for 76-4-401, Enticing a Minor;

(g) any class B or C conviction under Chapter 6, Title 76, Offenses Against Property, Utah Criminal Code;

(h) any class B or C conviction under Chapter 6a, Title 76, Pyramid Schemes, Utah Criminal Code;

(i) any class B or C misdemeanor offense under Title 76, Chapter 7, Subsection 103, Adultery, and 104, Fornication;

(j) any class B or C conviction under Chapter 8, Title 76, Offenses Against the Administration of Government, Utah Criminal Code except 76-8-1201 through 1207, Public Assistance Fraud; and 76-8-1301 False statements regarding unemployment compensation;

(k) any class B or C conviction under Chapter 9, Title 76, Offenses Against Public Order and Decency, Utah Criminal Code, except for:

(i) 76-9-301, Cruelty to Animals;

(ii) 76-9-301.1, Dog Fighting;

(iii) 76-9-301.8, Bestiality;

(iv) 76-9-702, Lewdness;

(v) 76-9-702.5, Lewdness Involving Child; and

(vi) 76-9-702.7, Voyeurism; and

(l) any class B or C conviction under Chapter 10, Title 76, Offenses Against Public Health, Welfare, Safety and Morals, Utah Criminal Code, except for:

(i) 76-10-509.5, Providing Certain Weapons to a Minor;

(ii) 76-10-509.6, Parent or guardian providing firearm to violent minor;

(iii) 76-10-509.7, Parent or Guardian Knowing of a Minor's Possession of a Dangerous Weapon;

(iv) 76-10-1201 to 1229.5, Pornographic Material or Performance;

(v) 76-10-1301 to 1314, Prostitution; and

(vi) 76-10-2301, Contributing to the Delinquency of a Minor and

(m) any class A misdemeanor where the conviction occurred more than ten years ago and the offense would be an excludable offense listed in this section.

[(3) The Executive Director or designee may consider and approve individual cases where a covered individual will be allowed to provide child care who would otherwise be excluded by this section.]

([4]3) The Department will rely on the criminal background screening as conclusive evidence of the conviction and the Department may revoke or deny approval for a provider based on that evidence.

([5]4) If a covered individual causes a provider to be disqualified as a provider based upon the criminal background screening and the covered individual disagrees with the information provided by BCI, the covered individual may challenge the information by contacting BCI directly. If the information causing the disqualification came from a Utah court, the covered individual must contact that court or seek an expungement as provided in Utah Code Ann. Sections 77-18-10 through 77-18-15.

([6]5) All child care providers must report all felony and misdemeanor arrests, charges or convictions of covered individuals to DOH within 48 hours of the arrest, notice of the charge, or conviction. All child care providers must also report a person aged 12 or older moving into the home where child care is provided within ten calendar days of that person moving in. A release for a background check must also be provided for that person within the time requested by the Department or DOH.

 

KEY: child care

Date of Enactment or Last Substantive Amendment: [April 1], 2017

Notice of Continuation: September 3, 2015

Authorizing, and Implemented or Interpreted Law: 35A-3-310; 53A-1b-110