DAR File No. 43556

Workforce Services, Employment Development

Rule R986-700

Child Care Assistance

Notice of Proposed Rule

(Amendment)

DAR File No.: 43556
Filed: 02/28/2019 01:24:44 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of these rule changes is to streamline reporting requirements for child care subsidy recipients, clarify the definition of out-of-pocket costs, and clarify the procedure when a non-subsidy recipient parent pays a child care provider directly for the care of a recipient child.

Summary of the rule or change:

The Department of Workforce Services (Department) administers the federal Child Care and Development Block Grant (CCDBG). The CCDBG provides funds for child care assistance, or subsidies, to assist low-income families in paying for child care. Child care assistance programs are referred to as "CC" programs. These rule changes eliminate the Job Search Child Care Program and expands the Employment Support Child Care Program (ESCC). Rather than providing up to three months of child care for job search after a job loss, ESCC customers will remain eligible during the remainder of their certification period. ESCC reporting requirements are also reduced during the 12-month CC eligibility certification period to be less disruptive to families. These changes allow child care coverage during temporary breaks in school or employment or job loss through the end of the re-certification period. These rule changes clarify that child care subsidy does not cover additional costs such as registration fees, late fees, or field trips, consistent with existing Department policy and practice. These rule changes clarify the procedure when one parent receives a subsidy on behalf of a child and the child's other parent does not receive a CC subsidy (the "non-applicant" parent). This is a clarification to be consistent with current policy and practice. These rule changes explain the procedure when a non-applicant parent pays a child care provider directly for their share of child care. In that case, the amount paid by the non-applicant parent will be deducted from the provider's total charge for providing care to the child, and will not be deducted from the child care subsidy amount. There is one example in this rule change illustrating the application of the rule. Following are two additional examples: Example 1: The applicant parent has two children ages three and five. The provider's monthly charge is $600 for each child or $1,200 total. The non-applicant parent of the three-year old pays the provider $200 per month. The applicant parent is solely responsible for the charge for the five-year old. The provider should report the reduced charge of $400 for the three-year old, as that is the portion the applicant parent is responsible to pay. The provider charge of $400 for the three-year old and $600 for the five year old ($1,000 total) will be used in the benefit calculation when determining the amount of the subsidy the applicant parent qualifies for. Example 2: The applicant parent has one child. The maximum limit the subsidy will pay is $600. The applicant parent has been approved for $500 subsidy payment and must pay a $100 copayment based on her income. Her provider charges $650 for the child. The non-applicant parent begins paying $200 directly to the provider. The provider reports to the Department that the portion the applicant parent is responsible to pay is now $450. The Department subsidy payment would be reduced to $350 with the same $100 copayment.

Statutory or constitutional authorization for this rule:

• Section 35A-3-310

Anticipated cost or savings to:

the state budget:

These proposed rule changes are not expected to have any fiscal impact on state government revenues or expenditures because any costs will be paid with funds granted to the State through the federal Child Care and Development Fund (CCDF). Congress approved and allocated additional CCDF funds to states to be able to fully implement changes in CCDF regulations. There are no additional state employees or resources needed to oversee these proposed rule changes. These changes will not increase workload and can be carried out with existing budget.

local governments:

These proposed rule changes are not expected to have any fiscal impact on local governments' revenues or expenditures because the program is federally-funded and does not rely on local governments for funding, administration, or enforcement.

small businesses:

There are potentially 1,120 small businesses providing child care services (NAICS 624410) that could accept subsidy payments in Utah. It is estimated that subsidy recipients will receive an additional $7,460,480 annually. Those subsidy benefits will be paid directly to providers for the cost of child care. Providers include both small businesses and non-small businesses. These businesses will receive a portion of the additional annual subsidy payments, which will result in increased revenues each year. There are too many variables to separate the benefits between small and large businesses. In the chart below, the benefit has been equally divided between small businesses and other persons, as child care subsidies benefit both recipients and providers.

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

Potentially 6,183 families who receive ESCC will benefit from these changes. The direct impact is $7,460,480 annually that will support low-income parents to maintain their child care arrangements. Indirect benefits to families include continuity of care for children and fewer changes to report to the Department upon job loss or re-entry into the workforce during the certification period. There are also inestimable benefits for employers of child care recipients. Employers will benefit from their employees having stable child care arrangements and fewer interruptions such as having to reapply for child care and turn in income verification that could jeopardize their child care and their ability to maintain employment. In the chart below, the benefit has been equally divided between small businesses and other persons, as child care subsidies benefit both recipients and providers.

Compliance costs for affected persons:

These proposed rule changes are not expected to cause any compliance costs for affected persons because these proposed rule changes do not create any new eligibility or administrative requirements for recipients or any other affected persons. These proposed rule changes simplify and reduce the reporting requirements for child care subsidy recipients.

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

After a thorough analysis, it was determined that these proposed rule changes will result in a positive fiscal impact to affected businesses.

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:

• Amanda McPeck at the above address, by phone at 801-517-4709, by FAX at , or by Internet E-mail at ampeck@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:

04/15/2019

This rule may become effective on:

06/01/2019

Authorized by:

Jon Pierpont, Executive Director

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2019	FY 2020	FY 2021
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$310,853	$3,730,240	$3,730,240
Non-Small Businesses	$0	$0	$0
Other Persons	$310,853	$3,730,240	$3,730,240
Total Fiscal Benefits:	$621,706	$7,460,480	$7,460,480
Net Fiscal Benefits:	$621,706	$7,460,480	$7,460,480

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non - Small Businesses

The impacts to small businesses were characterized above and the impacts to non-small businesses are described here. There are four non-small businesses providing child care services (NAICS 624410) that accept subsidy payments in Utah. It is estimated that subsidy recipients will receive an additional $7,460,480 annually. Those subsidy benefits will be paid directly to providers for the cost of child care. Providers include both small businesses and non-small businesses. These businesses will receive a portion of the additional annual subsidy payments, which will result in increased revenues each year. In the table above, the benefits have been listed as benefits to small businesses, since the majority of subsidy payments are made to small-business providers. However, some benefit will go to non-small businesses, but there are too many variables to separate the benefits between small and non-small businesses. Further, in the table above, the benefit has been equally divided between small businesses and other persons, as child care subsidies benefit both recipients and providers.

 

The executive director of the Department of Workforce Services, Jon Pierpont, has reviewed and approved this fiscal analysis.

 

 

R986. Workforce Services, Employment Development.

R986-700. Child Care Assistance.

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

[(c) the client is separated from his or her employment;]

(c[d]) a change of address;

(d[e]) [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];

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

(f[g]) 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.[;

(h) 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;

(i) 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

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

(6)(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;

(iv) An eligible child turning 13 years old during an eligibility review period, unless the child no longer has a need for child care[.]; and,

(v) A client who has been approved for ongoing employment support child care at application or recertification and has a permanent loss of employment may remain eligible through the remainder of that certification period.

(b) A client who experiences an allowable temporary change after having[and has] been approved for ongoing employment support child care (ES CC) may continue to receive child care payments at the same level for the remainder of the certification period.[If the allowable temporary change is a temporary loss of employment, the client must comply with Department procedures regarding eligibility verification, including but not limited to reporting the temporary loss of employment to the Department within ten days and requesting the child care continue.]

(7) Once an eligibility determination is made and a full month's payment and copayment is assessed, benefits will be paid at the same level during the remainder of the certification period so long as the client remains eligible, except that:

(a) The Department may act on reported changes that result in a participation[subsidy] increase or copayment decrease, and

(b) Benefits may be reduced if a child care provider reports a lower monthly charge or the client changes to a different child care provider.

(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 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, 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.

 

R986-700-706. 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 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, registration fees, late fees, field trips, 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 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 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 is not expected to be in child care 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, registration fees, late fees, field trips, 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 at least eight hours by the 25th of the month, regardless of whether the child attends or is expected to attend for at least eight hours following the 25th of the month; 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 are required to read and agree to the terms and conditions contained in the Provider Guide annually.

(11) 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.

(12) 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.

 

R986-700-710. Income and Asset Limits for ES CC.

(1) Rule R986-200 is used to determine:

(a) who must be included in the household assistance unit for determining whose income must be counted to establish eligibility. In some circumstances, determining household composition for a ES CC household is different from determining household composition for a FEP or FEPTP household. ES CC follows the parent and the child, not just the child so, for example, if a parent in the household is ineligible, the entire ES CC household is ineligible. A specified relative may not opt out of the household assistance unit when determining eligibility for CC. The income of the specified relatives needing ES CC in the household must be counted. For ES CC, only the income of the parent/client is counted in determining eligibility regardless of who else lives in the household. If both parents are living in the household, the income of both parents is counted. Recipients of SSI benefits are included in the household assistance unit.

(b) what is counted as income except:

(i) the earned income of a minor child who is not a parent is not counted;

(ii) child support, including in kind child support payments, is counted as unearned income, even if it exceeds the court or ORS ordered amount of child support, if the payments are made directly to the client. If the child support payments are paid to a third party, only the amount up to the court or ORS ordered child support amount is counted; and

(iii) earned and unearned income of SSI recipients is counted with the exception of the SSI benefit.

(c) how to estimate income.

(2) The following income deductions are the only deductions allowed on a monthly basis:

(a) the first $50 of child support received by the family;

(b) court ordered and verified child support and alimony paid out by the household;

(c) $100 for each person with countable earned income; and

(d) a $100 medical deduction. The medical deduction is automatic and does not require proof of expenditure.

(3) The household's countable income, less applicable deductions in paragraph (2) above, must be at, or below, a percentage of the state median income as determined by the Department. The Department will make adjustments to the percentage of the state median income as funding permits. The percentage currently in use is available at the Department's administrative office.

(4) Charts establishing income limits and the copayment amounts are available at all local Department offices.

(5) An independent living grant paid by DHS to a minor parent is not counted as income.

(6) If a non-applicant parent pays a portion of the child care costs directly to the applicant parent, that amount is counted as income. If the non-applicant parent pays the child care provider directly, that amount will be deducted from the amount the provider reports to the Department as the charge for the child[subsidy amount]. For example: The provider's monthly charge is $800 per month. The non-applicant parent pays $300 directly to the provider. The provider should report the charge of $500, as that is the portion the applicant parent is responsible to pay. The provider charge of $500 will be used in the benefit calculation when determining the amount of subsidy. If the court orders the non-applicant to pay one-half of the child care costs, the non-applicant parent must pay one-half of the total cost of child care.

(7) Clients must meet the CCDF asset limit.

 

R986-700-711. ES CC to Support Education and Training Activities.

(1) CC may be provided when the client(s) is engaged in education or training and employment, provided the client(s) meet the work requirements under Section R986-700-709(1).

(2) The education or training is limited to courses that directly relate to improving the parent(s)' employment skills.

(3) ES CC will only be paid to support education or training activities for a total of 24 calendar months. The months need not be consecutive.

(a) On a case by case basis, and for a reasonable length of time, months do not count toward the 24-month time limit when a client is enrolled in a formal course of study for any of the following:

(i) obtaining a high school diploma or equivalent,

(ii) adult basic education, and/or

(iii) learning English as a second language.

(b) Months during which the client received FEP child care while receiving education and training do not count toward the 24-month time limit.

(c) CC can not ordinarily be used to support short term workshops unless they are required or encouraged by the employer. If a short term workshop is required or encouraged by the employer, and approved by the Department, months during which the client receives child care to attend such a workshop do not count toward the 24- month time limit.

(4) Education or training can only be approved if the parent can realistically complete the course of study within 24 months.[

(5) A client may choose to receive continued child care coverage of training participation hours for up to three months during a break in semesters to allow for continuity of care and to reserve the child care slot(s).]

(5[6]) Any child care assistance payment to cover training participation hours made for a calendar month, or a partial calendar month, counts as one month toward the 24-month limit.

(6[7]) There are no exceptions to the 24-month time limit, and no extensions can be granted.

(7[8]) CC is not allowed to support education or training if the parent already has a bachelor's degree.

(8[9]) CC cannot be approved for graduate study or obtaining a teaching certificate if the client already has a bachelor's degree.

 

[ R986-700-719. Job Search Child Care (JS CC).

(1) JS CC is available to a client who is otherwise eligible for child care but is separated from his or her job and meets the eligibility criteria.

(2) JS CC is available for a maximum of three additional months provided the client:

(a) met the minimum work requirement for a single or two-parent household, and was permanently separated from his or her job or was receiving child care for an allowable temporary change when permanently separated from his or her job;

(b) was receiving ES CC in the month of the job separation and;

(c) reports the job loss within 10 days and requests continued child care payments while searching for a job. In that case, the client will be eligible for one additional month of child care. The month of the job loss does not count.

(3) If the client verifies the job loss in a timely manner, as directed by the Department, a second and third month of CC will be paid while the client looks for a job.

(4) The JS CC copayment will be at the lowest copayment amount required by the Department for the lowest income group, disregarding all earned income during the JS CC period.]

 

KEY: child care, grant programs

Date of Enactment or Last Substantive Amendment: [September 7, 2018]2019

Notice of Continuation: September 3, 2015

Authorizing, and Implemented or Interpreted Law: 35A-3-310; 53A-1b-110; 53F-5-210