CHILD CARE

Prepared by:
Melinda Hugdahl, Staff Attorney
Legal Services Advocacy Project
651-842-6907
mthugdahl@mnlsap.org

Acronyms Used in this Section

BSF = Basic Sliding Fee
CCAP = Child Care Assistance Program
DHS = Minnesota Department of Human Services
FPG = Federal Poverty Guidelines
MFIP = Minnesota Family Investment Program

I. CHILD CARE ASSISTANCE PROGRAM (CCAP)

A. Absent Day Payments
Chapter 108, Article 3, Section 12 (HF 1233)
Amends Minn. Stat. §119B.13, subd. 7
Effective February 1, 2014

1. Restoration of Payments and Limitations
Restores CCAP payments for a child attending a licensed provider or licensed-exempt center if a child: (1) has missed up to 25 full days of child care; or (2) misses up to 10 consecutive full days. Provides that the increased absent days do not apply to legal nonlicensed providers.

2. Exemption
Allows an exemption for a child who exceeds the number of absent days permitted because of a documented medical condition of: (1) the child; or (2) a parent or sibling residing in the same household. Qualifies the following persons to verify the illness: (1) a medical practitioner; (2) a public health or school nurse; or (3) a lead teacher or center director, if the child is sent home due to medical illness. Directs DHS to establish forms and timelines.

B. Eligibility

1. Of Child of Center Employee/Provider
Chapter 108, Article 3, Section 43 (HF 1233)
Amends Laws 2011, First Special Session, Chapter 9, Article 1, Section 3
Effective July 1, 2014

Delays the January 1, 2013 effective date of 2011 changes that prohibited child care assistance payments if a child was related to a child care center employee or provider, unless at least 50% of children enrolled in the center received child care assistance. Makes change retroactive to January 1, 2013, when the 2011 law technically took effect.

2. Redeterminations
Chapter 108, Article 3, Section 3 (HF 1233)
Amends Minn. Stat. § 119B.025, subd. 1
Effective August 4, 2014

Provides that a family completing a redetermination form and all required authorizations within 30 days of when they were due, the family will: (1) be considered to have met the redetermination requirement; and (2) will receive CCAP payments retroactively to the original due date.

Note: The family must remain otherwise eligible for CCAP.

C. Fraud Disqualifications
Chapter 108, Article 3, Section 23 (HF 1233)
Amends Minn. Stat. § 256.98, subd. 8
Effective February 3, 2014

Aligns family disqualification for child care assistance fraud with other public benefits programs, making disqualification periods for the family if one member commits fraud: (1) one year for the first offense; (2) two years for the second offense; and (3) permanent disqualification for the third offense.

Note: What constitutes fraud and the definition of "family member" are not changed from existing law.

D. Student Parents
Chapter 108, Article 3, Sections 1, 4, and 5 (HF 1233)
Amends Minn. Stat. §§ 119B.03, subd. 4; and 119B.05, subd. 1
Adds Minn. Stat. § 119B.011, subd. 19b
Effective November 11, 2013

Note: These changes as a whole will result in allowing student parents to: (1) move into the first priority on the BSF waiting list; and (2) become eligible for MFIP child care until BSF funds are available to move them from the waiting list as a first priority case.

1. Definition of "Student Parent"
Defines "student parent" as a person who is: (1) under age 21; (2) pursuing a high school diploma or GED; (3) residing in a county with a BSF waiting list; and (4) not an MFIP participant.

2. BSF Priority for Student Parents
Expands the first priority on the BSF waiting list to include student parents.

3. MFIP Child Care Eligibility
Makes student parents eligible for MFIP child care (which has no waiting list) if there is a BSF waiting list in the student parent's county of residence.

II. EARLY EDUCATION/PRESCHOOL SCHOLARSHIPS
Chapter 116, Article 8, Section 2 (HF 630)
Adds Minn. Stat. § 124D.165
Effective July 1, 2013

Note: Scholarships applications likely available Fall 2013

Creates an early learning scholarship for: (1) low-income children ages 3 - 5; and (2) their siblings in the same program, provided they are not already in kindergarten.

Note: This program is intended to provide funding in addition to, and not in place of, CCAP funds.

A. Eligibility
Makes a parent or guardian eligible who: (1) has a child at least age 3 as of September 1 who has not yet started kindergarten; or (2) is parent under age 21, who has children age 5 or younger, and is pursuing a high school or GED; and (3) meets the income eligibility criteria. Provides that a parent or guardian is eligible if s/he: (1) has income equal or less than 185% FPG; (2) can document placement in foster care under Minn. Stat. § 260C.212; or (3) can document participation in: (i) free and reduced-price lunch program, or child and adult care food program; (ii) National School Lunch Act (See 42 U.S.C. §§ 1751 and 1766); (ii) Head Start; (ii) MFIP under Minnesota Statutes, Chapter 256J; (iii) Child Care Assistance under Minnesota Statutes, Chapter 119B; or (iv) Supplemental Nutrition Assistance Program (SNAP). Disregards scholarship funds as income for purposes of: (1) Medical Assistance under Minnesota Statutes, Chapter 256B; (2) MinnesotaCare under Minnesota Statutes, Chapter 256L; (3) MFIP under Minnesota Statutes Chapter 256J; and (4) Head Start or CCAP under Minnesota Statutes, Chapter 119B.

B. Administration
Places responsibility for administration with Department of Education.

C. Prioritization of Applications
Permits prioritization of scholarship applications by factors of: (1) income; (2) geographic location; (3) whether the family is on a waiting list for publically-funded child care (e.g., BSF) or early education programs (e.g. Head Start). Allows prioritization as well at programs: (1) with a 4-star Parent Aware rating; (2) that have waiting lists; and (3) that use scholarships to expand capacity.

D. Amount and Terms of Scholarship
Awards scholarships of up to $5,000 per eligible child per year. Provides that the scholarship cancels and the parent must re-apply if a child has not been enrolled in a qualifying program within 10 months of receipt the scholarship. Requires children to complete a developmental screening within 90 days of attending an eligible program, unless a screening has already been completed. Makes scholarships available to siblings up to age 5 who are attending the same program if requested by the parent.

Note: The current appropriation will provide approximately 8,000 scholarships per year.

E. Eligible Programs
Programs must, to be eligible: (1) be participating in the Parent Aware rating system under Minn. Stat. § 124D.142; and (2) as of July 1, 2016, have a three- or four-star rating from Parent Aware. Provides that programs must use the scholarships in addition to, and not in place of, federal funding.

F. Evaluation
Requires the Department of Education to evaluate the scholarship program through a contract with an independent evaluator. Requires that the evaluation assess the: (1) per child award and recommend an appropriate amount; (2) efficiency and effectiveness of the scholarship administration; and (3) impact of the scholarship program on kindergarten readiness.

III. PROVIDER PAYMENTS

A. Higher CCAP Reimbursement Differential
Chapter 108, Article 3, Sections 8-10 (HF 1233)
Amends Minn. Stat. § 119B.13, subd. 3a
Adds Minn. Stat. § 119B.13, subds. 3b and 3c
Various Effective Dates
July 1, 2013 (Section 8 - Accreditation); March 3, 2014 (Section 9 - Parent Aware differential); and August 4, 2014 (Section 10 - Weekly rate differential)

1. Evaluation of Accreditations
Requires DHS to evaluate and expand accreditations accepted that will result in a 15% child care assistance reimbursement differential payment. Leaves intact the current statutory accreditations that merit an increased differential until the evaluation process is complete. Requires 90 days' advance notification to providers and parents if an accreditation is no longer approved.
Effective July 1, 2013

2. Parent Aware Differential
Establishes that a family child care provider or center will be paid the following parent aware differential payment increase: (1) 15% for a three-star rating from the Parent Aware rating system; and (2) 20% for a four-star rating from Parent Aware. Provides that the differential is in addition to the child care assistance maximum reimbursement rate, up to the provider's actual rate.
Effective March 3, 2014

3. Weekly Rate Differential
Permits payment of the maximum weekly rate (up to the provider's actual rate) to a licensed provider who or a licensed-exempt center: (1) that receives a higher differential reimbursement payment for a child up to age 5 (but not yet in kindergarten); and (2) where the applicant/parent's activities qualify under: (i) the BSF provisions (Minn. Stat. § 119B.03); MFIP Child Care (Minn. Stat. § 119.05); Employment/Training eligibility (Minn. Stat. § 119B.10); and CCAP payment rules (Minn. Rules, Chapter 3400).
Effective August 4, 2014

B. MARKET RATE/COUNTY PRICE CLUSTERS
Chapter 108, Article 3, Sections 2, 6 and 7 (HF 1233)
Amends Minn. Stat. § 119B.13, subds. 1 and 1a
Adds Minn. Stat. § 119B.02, subd. 7
Effective February 3, 2014

1. New Method to Determine Market Rate
Establishes a new county clustering method (replacing the current county-by-county method) to determine market rate provider payments. Directs DHS to cluster counties, grouping like-priced counties together. Gives DHS the flexibility to cluster counties so geographic proximity is not required.

2. Applicability
Applies the county price cluster reimbursement to: (1) licensed providers; (2) license-exempt centers; and (3) legal nonlicensed providers.

3. Maximum Market Rate
Establishes the maximum market rate, beginning in 2014, at the greater of: (1) the 25th percentile of the 2011 provider rate survey; or (2) the maximum rate as of November 28, 2011. Directs DHS, beginning in 2014, to biennially survey child care market rates to set the maximum reimbursement rate for each price cluster.

4. Maximum Registration Fees
Sets a ceiling of the maximum registration fee in effect as of January 1, 2013 remain in effect, regardless of the section of Minnesota Rules that ties registration rate reimbursement to market surveys (Minn. R. part 400.0130, subp. 7).

C. FRAUD
Chapter 108, Article 3, Section 11 (HF 1233)
Amends Minn. Stat. § 119B.11, subd. 6
Effective February 3, 2014

Permits counties to withhold provider child care assistance reimbursement payments, or authorization for payments, for up to three months after a condition that results in denial or termination of payments under existing law has been corrected.

IV. PROVIDERS

A. Child Care Assistance Fraud Investigations/Sanctions
Chapter 108, Article 5, Sections 1 and 5 (HF 1233)
Adds Minn. Stat. §§ 13.461, subd. 7b; and 245E.01
Effective July 1, 2013

Creates statutory authorization for DHS investigations of child care assistance fraud by the Office of Inspector General. Governs: (1) processes and scope of investigations; (2) administrative sanctions; (3) appeals; and (4) recovery of payments. Makes CCAP recipients subject to sanction only if their conduct is related to the financial misconduct of: (1) a provider; (2) license holder; or (3) controlling individual. Protects data under Chapter 13, and provides that data has the same classification as other licensing data.

Note: Data protections are established under the new section (Minn. Stat. § 245E.01, subd. 15), which makes data subject to the provisions of Minn. Stat. § 13.461.

B. Liability Insurance
Chapter 108, Article 3, Section 19 (HF 1233)
Adds Minn. Stat. § 245A.152
Effective July 1, 2013

Requires child care providers to notify parents in writing prior to admission whether or not the provider carries liability insurance. Requires providers to possess signed documentation that each parent received all required notices regarding liability insurance coverage. Requires that a provider having liability insurance: (1) make the certificate of coverage available to parents, DHS, and the county licensing agency; (2) notify parents that the certificate of coverage is available for inspection; (3) include the policy's expiration date in the notice; (4) upon the policy's expiration date, notify all parents whether or not the policy has been renewed and, if renewed, provide the new expiration date; and (5) immediately notify all parents/guardians of any changes in coverage. Requires providers without liability insurance, to provide an annual notice of the lack of insurance to all families.