Statement of Scope
Department of Children and Families
Relating to: Payment of the Child Care Subsidy for Low-Income Families
Rule Type: Emergency and Permanent
This statement of scope was approved by the governor on November 4, 2016.
1. Finding/nature of emergency (for emergency rules only)
An emergency rule is necessary to implement the department’s new system for payment of the child care subsidy for low-income families in February 2017, as specified in the department’s plan approved by the Joint Committee on Finance.
2. Detailed description of the objective of the rules
Parent Payments Replacing Provider Reimbursement
The emergency and proposed rules will implement a new system for payment of the child care subsidy for low-income families. Currently, after providing child care services for a child whose care is subsidized, a child care provider has up to 3 months to submit to the department a request for reimbursement with attendance report forms. The department pays the child care subsidy directly to the provider with minimal involvement by the parent. The parent pays the provider the difference between the subsidy amount and the provider’s price, including a required copayment based on family size, income level, and other factors.
Under the new system, child care providers will no longer be billing the department for reimbursement. Payment arrangements will be between the provider and the parent. The department and a third-party EBT vendor will make the subsidy amount electronically available to the parent at the beginning of a month. The parent will be able to transfer payments to the provider via a website; telephone IVR (interactive voice response) system; or, if the provider chooses to lease the equipment, a point-of-sale card swipe system.
The funds will remain electronically available to the parent for payment to the authorized provider for 90 days and will then expire. The funds will only be transferrable to the specific provider for whom the parent received an authorization. Parents will continue to pay the difference between the provider’s price and the subsidy amount from their own funds.
Currently, an agency generally issues an authorization for payment based on enrollment if the care will be by a licensed group provider. Authorizations for payment based on attendance are used if the care will be by a licensed family provider or a certified provider. With the new system, there will no longer be two types of authorizations. Authorizations for payment for child care by all types of providers will be based on a family’s need for care.
Under the current payment system, after an applicant is determined to be eligible, a payment authorization can be backdated to the Sunday beginning the first week of the month if a provider who met the department’s requirements for receiving subsidy payments has cared for the child during this time. Under the new system, an authorization for payment may be backdated to the date of the parent’s request for assistance.
The emergency and proposed rulemaking orders will update ch. DCF 201 to conform to the language and policies of the new system for subsidy payments. This will include repealing obsolete language, such as vouchers, enrollment and attendance-based authorizations, provider recordkeeping and reporting requirements, adjustment of enrollment-based authorizations based on attendance report forms, reimbursement to providers, refusal to issue payments to providers, and recoupment from providers. Since providers may be submitting attendance report forms and requests for reimbursement for 3 months after the effective date of the emergency rule, some transitional provisions relating to attendance records, provider reimbursement, refusal to issue payment to providers, and recoupment from providers will remain in the emergency rule for issues related to payment for care provided before the effective date of the rule.
Continuity of Care to Support Parents and Minimize Disruptions to Child’s Development
The emergency and proposed rules will also implement new requirements in federal regulations that were adopted on September 30, 2016. The regulations provide that a state shall re-determine a child’s eligibility for child care services no sooner than 12 months following the initial eligibility determination or most recent redetermination. Between the initial determination and redetermination, states are required to allow subsidy payments to continue at the same level during a parent’s temporary absence from approved activities for a period not to exceed 3 months. Following a parent’s loss or cessation of employment or approved activities that is not temporary, states are required to allow subsidy payments to continue at the same level for a period of at least 3 months.
The rulemaking orders will also include minor changes to update and clarify program requirements, including the following:
• Create a provision in ch. DCF 201 that requires an individual to furnish a child care administrative agency with any relevant information that the agency determines is necessary, within 7 working days after receiving a request for the information from the agency. This requirement already exists in s. 49.145 (2), Stats., which applies to the child care subsidy program under s. 49.155 (1m) (b) 1., Stats. • Repeal a section in the Wisconsin Works rules that only applies to the child care subsidy and incorporate the information into ch. DCF 201. Wisconsin statutes define “Wisconsin Works” as the assistance program for families with dependent children, administered under ss. 49.141 to 49.161, Stats. This definition includes the child care subsidy program in s. 49.155, Stats. In earlier years, subsidy requirements that applied to parents were included in the Wisconsin Works rules, and requirements that applied to providers were included in the subsidy rules. The department is now moving toward consolidating child care subsidy requirements as much as possible.
• Repeal a provision that authorizes use of the child care subsidy program for care by an unregulated child care provider when the care allows a food stamp employment and training program (FSET) enrollee to attend a program activity prior to the development of an employability plan. The FSET program does not have program activities prior to the development of an employability plan, so this provision is obsolete.
• Incorporate a policy definition into the rule. The current rule requires that a child care administrative agency redetermine a parent’s eligibility and subsidy amount in a “timely manner” when the parent reports a change in circumstances. Timely redeterminations help to prevent payment errors. The rules will incorporate the current department policy that requires redeterminations within 2 working days after a parent’s report of a change in circumstances.
No Waivers of the Immunization Requirement Based on Personal Conviction
The proposed rules will also require that children whose care is subsidized under s. 49.155, Stats., receive age-appropriate immunizations or obtain an exemption for a reason permitted under federal Child Care Development Fund (CCDF) regulations. For children whose care is subsidized by the CCDF, 45 CFR 98.41 (a) (1) (i) allows an exemption of the immunization requirement for children in child care centers whose parents object on religious grounds and children whose medical condition contraindicates immunization. In Wisconsin, s. 252.04, Stats., requires that children in child care centers and students in elementary, middle, junior, and high school receive age-appropriate immunizations, unless the requirement is waived under s. 252.04 (3), Stats. This provision allows a waiver if a parent or student objects for reasons of health, religion, or personal conviction. The federal Administration for Children and Families, Office of Child Care, has approved the state’s CCDF plan for 2016−2018 with conditions that include not allowing a waiver of age-appropriate immunization requirements based on a parent’s personal conviction for children whose care is subsidized under s. 49.155, Stats.
3. Detailed explanation of statutory authority for the rules
The department administers the child care subsidy program under s. 49.155, Stats. Section 49.155, (3m) (a), Stats., as affected by 2013 Wisconsin Act 20, provides that the department shall issue benefits directly to individuals who are eligible for subsidies under this section or pay or reimburse child care providers. Section 49.131 (3m), Stats., as affected by 2013 Wisconsin Act 20, provides that prior to implementing, and receiving funding for implementing, electronic benefit transfer of child care subsidies under s. 49.155, Stats., the department’s implementation plan must be approved by the Joint Committee on Finance. The Committee approved the department’s plan on January 12, 2015. Section 49.155 (1m) Stats., specifies eligibility conditions for receiving a child care subsidy. Section 49.155 (1m) (d), Stats., provides that an individual may receive a subsidy if the individual satisfies other eligibility criteria established by the department by rule. Section 49.155 (1m) (g), Stats., provides that, except as provided in par. (bm), the individual may receive a subsidy if he or she meets the eligibility criteria under s. 49.145 (2) (f), (g), and (s), Stats. Section 49.145 (2) (g) is a nonfinancial eligibility requirement for Wisconsin Works (W-2) employment positions and job access loans that provides that an individual is eligible in a month only if the individual furnishes the W-2 agency with any relevant information that the W-2 agency determines is necessary, consistent with rules promulgated by the department, within 7 working days after receiving a request for the information from the W-2 agency. The W-2 agency may extend the 7-day time limit for an individual for whom compliance with that limit would be unduly burdensome, as determined by the W-2 agency. Section 49.155 (1) (ah), Stats., provides that “county department or agency” means a county department under s. 46.215, 46.22, or 46.23, Stats., the unit, as defined in s. 49.825 (1) (e), Stats., or a Wisconsin Works agency, child care resource and referral agency, or other agency. Section 49.155 (1m) (a) 3m., Stats., provides that an individual may receive a subsidy for child care to participate in a job search or work experience component of the food stamp employment and training program under s. 49.79 (9), Stats. Section 49.151 (2), Stats., provides that if the department, or a county department or agency under contract under s. 49.155 (1m), Stats., determines that an individual applying for or receiving benefits under ss. 49.141 to 49.161, Stats., for the purpose of establishing or maintaining eligibility for those benefits or for the purpose of increasing the value of those benefits, has committed an intentional program violation related to any provision in ss. 49.141 to 49.161 or any rule promulgated under those sections, the county department or agency under contract under s. 49.155 (1m), Stats., or the department shall deny benefits under ss. 49.141 to 49.161 to the individual for 6 months for a first intentional program violation, one year for a 2nd intentional program violation, and permanently for a 3rd intentional program violation.