Relating to state child care assistance eligibility for children of full-time child care providers

Description

House File 343 directs the Department of Health and Human Services (HHS) to establish an Enhanced Child Care Assistance Pilot Program (ECCAPP) to extend eligibility for State child care assistance to children of child care workers employed full-time by a child care facility from July 1, 2023 to June 30, 2025.

The HHS is also directed to submit a report on the pilot program to the General Assembly on or before March 1, 2025. The report is required to include the number of applicants approved for the pilot program who would otherwise have been denied due to income limits, the total number of families served by the pilot program, and the total annual cost of the program.

Background

The Child Care Assistance (CCA) Program was established in 2000 to subsidize child care costs for low-income families with parents who are working, gaining work skills, attending school, or otherwise unable to care for children due to physical or mental illness. The CCA Program provides financial assistance for the care of children under the age of 13 in a number of circumstances based on the income level of the parents and the needs of the children. In fiscal year (FY) 2023, the State General Fund appropriation to the CCA Program was $40.8 million. Federal dollars from Temporary Assistance for Needy Families (TANF) provided $26.2 million and Child Care Development Fund (CCDF) provided $84.5 million for the CCA Program. The carryforward at the end of FY 2022 was $73.4 million, and the FY 2023 surplus is projected to be approximately $93.5 million.

Assumptions

The HHS reports that implementation of the pilot program will require 880 hours of IT contractor time to develop a new program and modify the copay structure to implement the new program in the KinderTrack system. The Bureau of Data and Business Intelligence would need to devote approximately 44 hours of contractor time to update reporting systems for the data warehouse. In addition, the Bureau of Project Management will require 92 hours of project management time to oversee the pilot program and 304 hours of business analyst time to meet the reporting requirements. All of these hours, 1,320 total, would be billed at $125 per hour. Of the approximately 10,000 child care workers employed full-time in Iowa, 5.0% (500) are currently ineligible for assistance due to CCDF program income limits. The average cost per child care unit is approximately $20 per unit. At 10 units per week, the average weekly cost per child would be approximately $200 per week.

Fiscal Impact

Table 1 shows the breakdown of expenses required to establish, support, and maintain the Child Care Assistance Pilot Program.

Table 1 — Contractor Hours and Costs The fiscal impact for HF 343 cannot be determined as the number of eligible workers that will enroll in the Program is unknown. However, Table 2 displays a range of costs based on the percentage of eligible workers enrolling in the program with an estimated average of 2.0 children per enrolled worker. Program expenditures will begin in FY 2024 and will be funded from the Child Care Assistance (CCA) surplus.

Table 2 — Average Annual Cost by Percent of Eligible Workers Enrolled

Sources

• Department of Health and Human Services
• Legislative Services Agency