Families receiving federally-funded child care subsidies are free to choose from a broad range of types of child care. Families can choose a child care center or family child care home—the most common types of child care subsidized with federal money.1 But in most places, families can also choose a less-formal type of care, such as having a relative or neighbor care for the child. These less-formal types of care are typically “license-exempt”, meaning that the people providing care have to comply with relatively few regulations. Now, with the recent reauthorization of the main federal program that funds child care subsidies, the federal government is applying new requirements to license-exempt child care providers receiving subsidy funds.
The Child Care and Development Fund (CCDF) provides funding from the Child Care and Development Block Grant (CCDBG) to the States, District of Columbia, and Territories to administer child care subsidy programs for low-income families.2 States/Territories must comply with broad federal guidelines, including but not limited to establishing income eligibility limits at or below 85 percent of state median income (SMI); setting the maximum age for children at or below 12 years, or at or below 18 years if children have special needs; and defining what activities qualify for assistance (work, education, training, etc.). Within the broad federal guidelines, States/Territories are given discretion to establish many of the detailed policies used to operate their CCDF programs, including requirements for child care providers.
The CCDBG Act of 2014 is the first reauthorization of the federal block grant since 1996. The reauthorization of CCDBG emphasizes family-friendly eligibility policies, increased quality of care, more explicit health and safety requirements for child care providers, and transparent and accessible information about providers to help parents make informed decisions.3 The Act includes several new requirements for policies related to providers. While many of the new requirements apply to both licensed and license-exempt providers, in this brief we focus on the policy changes for license-exempt providers, particularly legally unregulated home-based providers. The policy changes for providers are likely to have a greater impact on license-exempt providers, since in many States/Territories these providers had to meet relatively few requirements prior to CCDBG reauthorization.4
The new law creates uniform requirements for license-exempt providers that will apply to all States/Territories. The new requirements include comprehensive background checks at least every five years, annual health, safety, and fire inspections, and requirements for pre-service and ongoing training. While many of the new policies went into effect when the law was signed on November 19, 2014, some policies have later implementation dates. For requirements without specified dates, the Office of Child Care set September 30, 2016 as the implementation date. Additional guidance is provided to the States/Territories through the CCDF Plan Preprint and program instruction memorandums from the Office of Child Care.5
In this brief, we look at current State/Territory policies for legally unregulated home-based providers as they are addressed in the new legislation in order to understand what State/Territories are currently doing and how those policies might have to change. We discuss three broad policy areas for legally unregulated providers: criminal history background checks, health, safety, and fire inspections, and training requirements. For each policy area, we provide an overview of the federal policy, a snapshot of State/Territory policies prior to reauthorization, and a description of how the State/Territory policies will have to change to align with the new federal requirements. Finally, we provide information about additional resources for understanding State/Territory policies and reauthorization.
The policies discussed in this brief are drawn from several resources. We use the CCDF Policies Database to understand current State/Territory policies, and the CCDBG legislation, as well as the CCDF Plan Preprint, to describe the federal policy requirements. The U.S. Department of Health and Human Services (HHS) has issued proposed regulations based on the new law. In addition to providing information on how to implement the law, the regulations may include additional requirements, within the CCDBG legislation, for States’/Territories’ child care subsidy policies.
Policies for Legally Unregulated Home-Based Providers
Families receiving subsidies through CCDF may choose care from licensed or regulated providers, or from legally unregulated providers (also referred to as providers legally operating without regulation or license-exempt providers).6 In federal fiscal year 2014, 13 percent of children receiving CCDF subsidies in the average month received care from legally unregulated providers.7 Providers who are licensed or regulated must meet certain standards, such as health and safety requirements, criminal history checks, staff-to-child ratios, and trainings in order to provide care. Legally unregulated providers—who are often home-based providers (meaning they provide care in the child’s home or their own home)—may provide care without meeting the same licensing or other standards. Historically, requirements for license-exempt providers have varied based on each State’s/Territory’s subsidy policies. While these providers are referred to as “legally operating without regulation,” many State/Territory CCDF policies do place requirements on this group if they receive payments through the subsidy system.
CCDBG reauthorization attempts to ensure the health and safety of children in subsidized care through mandatory background checks, annual inspections, pre-service or orientation training and ongoing training, and clear standards for providers, including license-exempt providers. While many of these requirements will also apply to licensed providers, in this brief we focus on how the policy changes affect legally unregulated home-based providers.
As States/Territories implement the new health and safety requirements (including background checks, annual inspections, and training), they will have the option to exempt legally unregulated providers who are related to all of the children in their care. A significant number of in-home providers could be exempt; on average during federal fiscal year 2014, 62 percent of children in legally unregulated care received care from a relative.8
Criminal history background checks are one method for determining whether or not child care providers are able to provide a safe environment for the children in their care. Background checks can be conducted at different levels, including State, FBI, and National Sex Offender Registry checks. States/Territories can check for specific crimes as well as complaints with child and adult protective services.9 States/Territories can then restrict participation in the subsidy program to providers who meet certain standards, while excluding providers who have been convicted of serious crimes.
The use of background checks for legally unregulated home-based providers, as well as the types of checks required, varied by State/Territory prior to reauthorization. As of October 1, 2014, 40 States/Territories required criminal history background checks for the provider and some other staff or household members with access to the children in care (figure 1 and appendix table 1). Ten States/Territories required criminal history background checks for only the provider, and five States/Territories did not require criminal history background checks for unregulated providers.
In States/Territories that required background checks prior to reauthorization, the type of checks varied greatly, with most States/Territories requiring some combination of checks (appendix table 1). Forty-seven States/Territories required a State level check, 29 required an FBI check, 28 required a state sex offender registry check, and 3 required a local criminal background check. In addition to the criminal history background checks, most of the States/Territories (49) required providers to undergo some sort of child protective services screening, and 15 States/Territories required providers to undergo an adult protective services check. The background check requirements sometimes varied depending on whether the unregulated provider was a relative, with at least seven States exempting certain relative home-based providers from undergoing at least one of the types of criminal history background checks required for other providers.
With the reauthorization of the CCDBG, States/Territories are now required to conduct comprehensive background checks at least every five years for all license-exempt providers, as well as anyone who might have unsupervised access to the children at any point. These criminal background checks must search the State criminal and sex offender registry, the State child abuse and neglect registry, the National Crime Information Center, an FBI fingerprint check using the Next Generation Identification System, and the National Sex Offender Registry. State searches must include the current State of residence and any State the individual lived in over the last five years. The five States/Territories that did not previously require background checks will have to implement comprehensive background checks, and the States/Territories that only required background checks for the provider will also have to require checks for anyone who will have unsupervised access to the children in care.10 In addition to this, all of the States/Territories will have to add new types of checks, with some States/Territories already covering some but not all of the checks required under the new law. States/Territories will have the option to exempt relative providers from the background check requirements.
Health, Safety, and Fire Inspections
Health and safety requirements often pertain to the physical premises where children will receive care and are generally designed to prevent injuries and the spread of disease. Many State/Territory subsidy programs rely on self-completed checklists for license-exempt providers that outline minimum health and safety standards. The use of on-site inspections can allow States/Territories to better ensure that providers are complying with the requirements.
Similar to background check requirements, health and safety requirements for legally unregulated home-based providers varied across States/Territories prior to reauthorization. Almost all States/Territories required providers to comply with a health and safety checklist (including items such as safe sleep practices, routine cleaning, food safety, immunization documentation, disaster planning, etc.)11, with only six States/Territories not requiring providers to complete a health and safety checklist (figure 2 and appendix table 2). Among the States/Territories that required providers to comply with a health and safety checklist, fewer than half (17) conducted home visits or inspections to ensure providers met the requirements. Thirty-two States/Territories allowed for a self-completed checklist whereby providers attested to the fact that they met the requirements. In addition to the initial checklist requirement, 23 States/Territories also required some type of ongoing inspection or home visit, ranging from monthly visits, to annual inspections, to inspections as needed. Appendix table 2 provides the States’/Territories’ policies for ongoing health and safety inspections for October 2014.
The new CCDBG Act requires all States/Territories to have licensing inspectors (or qualified monitors designated by the State/Territory agency) perform annual inspections of license-exempt providers’ facilities to ensure they are following health, safety, and fire standards. Additionally, States/Territories must demonstrate how the licensing exemptions for legally unregulated providers will not endanger the health and safety of the children in the program. As with the background check requirements, States/Territories will have the option to exempt relative providers.
Pre-service and ongoing training requirements for providers can address a number of different topics related to the quality and safety of care. Trainings often cover topics related to health and safety, but they can also cover other topics related to professional development and improving the knowledge and skills of providers.
Like background checks and health and safety requirements, training requirements for legally unregulated home-based providers also varied across States/Territories prior to reauthorization. First Aid and CPR are two common types of training requirements. As of October 2014, more than half of the States/Territories did not require legally unregulated providers to complete either of these trainings. Of the States/Territories that required the provider to complete these trainings, 18 States/Territories required First Aid training and 19 required CPR training. In a few additional States/Territories, trainings were required for at least one person on site, whether or not that person is the primary provider. Appendix table 2 provides the States’/Territories’ policies for First Aid and CPR training for October 2014.
With the CCDBG reauthorization, States/Territories must establish pre-service or orientation training and ongoing training requirements that address health and safety standards and are appropriate for a given type of provider. As noted above, States/Territories will have the option to exempt relative providers. While the new law mandates that States/Territories must require pre-service and ongoing training and specifies subject areas for training, States/Territories have the flexibility to include additional subject areas determined necessary to protect the health and safety or promote the development of children in care.
Understanding State and Territory Policy Changes Going Forward
Over the next several years, State/Territory CCDF policies will change significantly as a result of the reauthorization of the CCDBG Act. Regarding the new health and safety requirements, States/Territories will face decisions about how to implement the requirements and how to fund the changes, as the new law did not guarantee higher federal funding.12 Some of these costs, such as the background checks, may be passed on to the providers, but States/Territories will have to decide how best to allocate resources for other new costs. The new requirements for license-exempt providers will also result in significant changes for the providers participating in the programs, and potentially for the children receiving care. It is unknown whether the new requirements will have any other impacts such as affecting the number or characteristics of legally-unregulated providers participating in the program or the portion of subsidized children in this type of care.
While the new policies could result in significant changes to caseloads and families’ choices regarding provider settings, much of this will depend on additional guidance provided in the pending regulations and how States/Territories implement the new requirements. Over the next several years, as States/Territories revise their policies to come into alignment with the new law, additional information about CCDBG reauthorization and guidance for States/Territories, how and when State/Territory policies change, and how caseloads change, will be available through several public resources.
- Resources from the CCDF Policies Database: The CCDF policies shown here are taken from the CCDF Policies Database. The CCDF Policies Database tracks State/Territory policies over time, with hundreds of variables tracking policies related to family eligibility, application and wait list procedures, family copayments, provider reimbursement rates, and other provider policies. The Database is maintained by the Urban Institute and funded by the Office of Planning, Research and Evaluation within the Administration for Children and Families, U.S. Department of Health and Human Services. The data are available for public use through annual published reports and access to the full Database detail.13 This brief is one in a series of briefs on the implications of CCDBG reauthorization on state child care subsidy policies. The other two briefs describe the changes to ongoing eligibility requirements and the changes to requirements for eligibility during periods of job search. Additionally, policy changes resulting from CCDBG reauthorization will be picked up as part of future updates to the Database, with the data made available for public use.
- Resources from the Office of Child Care: Information on CCDBG reauthorization, as well as information on CCDF caseloads and spending, can be obtained from the Office of Child Care (OCC), within the Administration for Children and Families, U.S. Department of Health and Human Services.
- CCDBG Reauthorization: OCC provides the statutory language of the Act, guidance for States/Territories provided in the CCDF Plan Preprint, details on the timeline for implementing the new requirements, and additional resources.14
- CCDF Statistics: OCC provides CCDF Statistics, including information on the number and characteristics of children and families served, the types of provider settings used, and State/Territory expenditures.15
- Resources from the Child Care Administrative Data Center (CCADAC): CCADAC, a project run by Child Trends and funded by OPRE, supports the use of administrative data to address policy-relevant early care and education research questions for state child care administrators and their research partners.16 State/Territory leaders and researchers may be interested in analyzing data to understand the effects of changes to requirements for legally unregulated child care providers. Analysis of administrative data is a cost-effective means of assessing the intended and unintended outcomes of policies and administrative procedures. Box 1, with information provided by CCADAC, provides examples of questions that can be answered with administrative data and next steps that States/Territories can take now to capture relevant information in their administrative records.
- In the average month of Federal Fiscal Year 2014, 72 percent of children received care in centers and 18 percent of children received care in family homes. See “FFY 2014 CCDF Data Tables (Preliminary Estimates)”, Table 3, available online at http://www.acf.hhs.gov/programs/occ/resource/fy-2014-ccdf-data-tables-preliminary.↩
- “States/Territories” is used throughout the brief to refer to the 50 States, the District of Columbia, American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the Virgin Islands. While not covered in this brief, the CCDF program also provides funding for the Tribes.↩
- For more information about the new child care provisions and the full law, see the Office of Child Care’s CCDF reauthorization resources webpage at http://www.acf.hhs.gov/programs/occ/ccdf-reauthorization.↩
- Policies for legally unregulated home-based providers are included in the CCDF Policies Database. Polices regarding licensed providers are available through other public resources, including those provided by the National Association for Regulatory Administration.↩
- The CCDF Plan serves as a State’s/Territory’s application for funds by providing a description of the program and policies and must be submitted every three years.↩
- The one exception is North Carolina, where unregulated providers cannot provide care through the subsidy program. Beginning August 1, 2012, the State required all providers participating in the subsidy program to be licensed at the three-star level or above.↩
- See “FFY 2014 CCDF Data Tables (Preliminary Estimates)”, Table 4, available online at http://www.acf.hhs.gov/programs/occ/resource/fy-2014-ccdf-data-tables-preliminary.↩
- See “FFY 2014 CCDF Data Tables (Preliminary Estimates)”, Table 5, available online at http://www.acf.hhs.gov/programs/occ/resource/fy-2014-ccdf-data-tables-preliminary.↩
- Adult protective services are provided to ensure the safety of the elderly and adults with disabilities. Protective services agencies maintain records of abuse, neglect, or exploitation of vulnerable adults. See http://www.ncea.aoa.gov/Stop_Abuse/Partners/APS/index.aspx for more information.↩
- See “Program Instruction on CCDF Reauthorization Effective Dates” available online at http://www.acf.hhs.gov/programs/occ/resource/pi-2015-02.↩
- For more examples see “Caring for Our Children Basics” available online at https://www.federalregister.gov/articles/2014/12/18/2014-29649/caring-for-our-children-basics-comment-request.↩
- The law does include a 16 percent increase in authorized discretionary funds over six years, but this increase must be allocated by Congress each year. For more information about the funding for CCDBG, see the guide to reauthorization prepared by the Center for Law and Social Policy and the National Women’s Law Center http://www.clasp.org/resources-and-publications/publication-1/ccdbg-guide-for-states-final.pdf.↩
- For more information about the CCDF Policies Database and access to the Database products, see http://www.acf.hhs.gov/programs/opre/research/project/child-care-and-development-fund-ccdf-policies-database-2008-2013 and http://www.urban.org/policy-centers/income-and-benefits-policy-center/projects/ccdf-policies-database.↩
- For more CCDBG reauthorization information from the Office of Child Care, see http://www.acf.hhs.gov/programs/occ/ccdf-reauthorization.↩
- CCDF statistics are available from OCC at http://www.acf.hhs.gov/programs/occ/resource/ccdf-statistics. CCDF expenditure data are available from OCC at http://www.acf.hhs.gov/programs/occ/resource/ccdf-expenditure-data-all-years.↩
- For more resources on working with administrative data from CCADAC, see http://www.researchconnections.org/content/childcare/understand/administrative-data.html.↩
About the Authors
Sarah Minton is a research associate in the Income and Benefits Policy Center at the Urban Institute. Her research focuses on child care subsidy policies and other government programs that serve low-income families. She serves as co-project director for the CCDF Policies Database.
Kathryn Stevens is a research associate in the Income and Benefits Policy Center at the Urban Institute. Her work focuses on child care subsidy policies, tax policy, and government programs that serve low-income families. She serves as project manager for the CCDF Policies Database.
Lorraine Blatt is a research assistant in the Income and Benefits Policy Center at the Urban Institute. She works primarily on child care subsidy policies and education and training initiatives.
This brief was funded by the Office of Planning, Research and Evaluation (OPRE). The authors would like to thank Linda Giannarelli (the Urban Institute) and Kathleen Dwyer (OPRE) for their insight during the drafting of the brief and their review of various drafts. The authors would also like to thank Gina Adams and Monica Rohacek of the Urban Institute for reviewing and providing feedback on the brief, as well as for their ongoing guidance on the project. Particular thanks are owed to the CCADAC team—Kelly Maxwell, Van-Kim Lin, Nicole Forry, and Carlise King—for their insight on using administrative data, for providing the supplemental material included in Box 1 of the brief, and for reviewing the draft brief. Finally, the authors would like to thank Rachel Schumacher (Director of OCC), Dawn Ramsburg (OCC), Minh Le (OCC), Amanda Clincy (OPRE), and Elizabeth Shuey (OPRE) for reviewing the draft brief, and Andrew Williams (OCC) for providing input on the overall plan and policy topics for the brief.
The views expressed in this publication do not necessarily reflect the views or policies of the Office of Planning, Research and Evaluation, the Administration for Children and Families, the U.S. Department of Health and Human Services, the Urban Institute, or the Urban Institute’s trustees or funders.
Kathleen Dwyer, Project Officer
Office of Planning, Research and Evaluation
Administration for Children and Families
U.S. Department of Health and Human Services
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This brief is in the public domain. Permission to reproduce is not necessary. Suggested citation: Minton, Sarah, Kathryn Stevens, and Lorraine Blatt (2016). Implications of Child Care and Development Block Grant Reauthorization for State Policies: Changes to Requirements for Legally Unregulated Child Care Providers. OPRE Report 2016-22, Washington, DC: Office of Planning, Research and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services.
This report and other reports sponsored by the Office of Planning, Research and Evaluation are available at http://www.acf.hhs.gov/programs/opre/index.html.