4.3 Adequate Payment Rates

The Lead Agency must set CCDF subsidy payment rates in accordance with the results of the current MRS or ACF pre-approved alternative methodology and at a level to ensure equal access for eligible families to child care services comparable with those provided to families not receiving CCDF assistance. Lead Agencies are also required to provide a summary of data and facts to demonstrate how payment rates ensure equal access, which means the Lead Agency must also consider the costs of base level care and higher quality care as part of its rate setting. Finally, the Lead Agency must re-evaluate its payment rates at least every 3 years. The ages and types of care listed in the base payment rate tables are meant to provide a snapshot of the categories of rates and are not intended to be comprehensive of all categories that might exist or to reflect the terms used by the Lead Agency for particular ages. If rates are not statewide, please provide all variations of payment rates when reporting base payment rates below. Base rates are the lowest, foundational rates before any differentials are added (e.g., for higher quality or other purposes) and must be sufficient to ensure that minimum health, safety, quality, and staffing requirements are covered. These are the rates that will be used to determine compliance with equal access requirements. 4.3.1 Payment rates a. Are the payment rates that the Lead Agency is reporting in 4.3.2 set statewide by the Lead Agency? [x] Yes. i. If yes, check if the Lead Agency: [ ] Sets the same payment rates for the entire State or Territory. [x] Sets different payment rates for different regions in the State or Territory. [ ] No. ii. If no, identify how many jurisdictions set their own payment rates: b. Provide the date the current payment rates became effective (i.e., date of last payment rate update based on most recent MRS or ACF pre-approved alternative methodology as reported in 4.2.1). 7/1/2024 c. If the Lead Agency does not publish weekly rates, then how were the rates reported in 4.3.2 or 4.3.3 calculated (e.g., were daily rates multiplied by 5 or monthly rates divided by 4.3)? OEC publishes weekly rates 4.3.2 Base payment rates a. Provide the base payment rates in the tables below. If the Lead Agency completed a market rate survey (MRS), provide the percentiles based on the most recent MRS for the identified categories. If the Lead Agency sets different payment rates for different regions in the State or Territory (and checked 4.3.1aii), provide the rates for the most populous region as well as the region with payment rates set at the lowest percentile. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. The preamble to the 2016 final rule states that a benchmark for adequate payment rates is the 75th percentile of the most recent MRS. The 75th percentile benchmark applies to the base rates. The 75th percentile is the number separating the lowest 75 percent of rates from the highest 25 percent. Setting rates at the 75th percentile, while not a requirement, would ensure that eligible families can afford three out of four child care providers. In addition to reporting the 75th percentile in the tables below, the Lead Agency must also report the 50th percentile and 60th percentile for each identified category. If the Lead Agency conducted an ACF pre-approved alternative methodology, provide the estimated cost of care for the identified categories, as well as the percentage of the cost of care covered by the established payment rate. If the Lead Agency indicated it sets different payment rates for different regions in the State or Territory in 4.3.1.a, provide the estimated cost of care and the percentage of the cost of care covered by the established payment rate for the most populous region as well as the region with rates established at the lowest percent of the cost of care. For each identified category below, provide the percentage of providers who are receiving the base rate without any add-ons or differential payments. Provide the full-time weekly base payment rates in the table below. If weekly payment rates are not published, then the Lead Agency will need to calculate its equivalent. i. Table 1: Complete if rates are set statewide. If rates are not set statewide, provide rates for most populous region. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Center Care for Infants (6 months) 376.00 Per Week 61.00 376.00 57.00 370.00 390.00 425.00 Family Child Care for Infants (6 months) 280.00 Per Week 36.00 280.00 60.00 275.00 300.00 300.00 Center Care for Toddlers (18 months) 376.00 Per Week 65.00 376.00 57.00 370.00 390.00 425.00 Family Child Care for Toddlers (18 months) 280.00 Per Week 43.00 280.00 60.00 275.00 300.00 300.00 Center Care for Preschool ers (4 years) 250.00 Per Week 28.00 250.00 41.00 275.00 305.00 350.00 Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Family Child Care for Preschool ers (4 years) 215.00 Per Week 19.00 215.00 20.00 250.00 275.00 300.00 Center Care for School- Age (6 years) 176.00 Per Week 11.00 176.00 21.00 240.00 248.00 270.00 Family Child Care for School- Age (6 years) 201.00 Per Week 79.00 201.00 24.00 260.00 275.00 280.00 ii. Table 2: Do not complete if rates are set statewide. If rates are not set statewide, provide rates for region with payment rates set at the lowest percentile. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Center Care for Infants (6 months) 284.00 Per Week 66.00 284.00 24.00 335.00 350.00 370.00 Family Child Care for Infants (6 months) 254.00 Per Week 7.00 254.00 87.00 225.00 250.00 250.00 Center Care for Toddlers (18 months) 284.00 Per Week 66.00 284.00 24.00 335.00 350.00 370.00 Family Child Care for Toddlers (18 months) 254.00 Per Week 7.00 254.00 87.00 225.00 250.00 250.00 Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Center Care for Preschool ers (4 years) 228.00 Per Week 69.00 228.00 37.00 280.00 300.00 305.00 Family Child Care for Preschool ers (4 years) 195.00 Per Week 7.00 195.00 20.00 200.00 225.00 250.00 Center Care for School- Age (6 years) 160.00 Per Week 74.00 160.00 15.00 250.00 250.00 275.00 Family Child Care for School- Age (6 years) 183.00 Per Week 7.00 183.00 31.00 225.00 240.00 350.00 b. Does the Lead Agency certify that the percentiles reported in the table above are calculated based on their most recent MRS or ACF pre-approved Alternative Methodology? [x] Yes. [ ] No. If no, what is the year of the MRS or ACF pre-approved alternative methodology that the Lead Agency used? What was the reason for not using the most recent MRS or ACF pre-approved alternative methodology? Describe: 4.3.3 Tiered rates, differential rates, and add-ons Lead Agencies may establish tiered rates, differential rates, or add-ons on top of their base rates as a way to increase payment rates for targeted needs (e.g., a higher rate for serving children with special needs). a. Does the Lead Agency provide any rate add-ons above the base rate? [x] Yes. If yes, describe the add-ons, including what they are, who is eligible to receive the add-ons, and how often are they paid: Certificates for Children with Special Needs has an add-on of 25% above base rate. Accredited Center-based program certificates have an add-on of 25% above base rate. Accredited Licensed Family rates have an add-on of 12.5% above the base rate. [ ] No. b. Has the Lead Agency chosen to implement tiered reimbursement or differential rates? [x] Yes. [ ] No. Tiered or differential rates are not implemented. If yes, identify below any tiered or differential rates, and, at a minimum, indicate the process and basis used for determining the tiered rates, including if the rates were based on the MRS or an ACF pre-approved alternative methodology. Check and describe all that apply: i. [ ] Differential rate for non-traditional hours. Describe: ii. [x] Differential rate for children with special needs, as defined by the Lead Agency. Describe: Certificates for Children with Special Needs has an add-on of 25% above base rate. iii. [ ] Differential rate for infants and toddlers. Note: Do not check if the Lead Agency has a different base rate for infants/toddlers with no separate bonus or add-on. Describe: iv. [ ] Differential rate for school-age programs. Note: Do not check if the Lead Agency has a different base rate for school-age children with no separate bonus or add-on. Describe: v. [x] Differential rate for higher quality, as defined by the Lead Agency. Describe: Accredited Center-based program certificates have an add-on of 25% above base rate. Accredited Licensed Family rates have an add-on of 12.5% above the base rate vi. [x] Other differential rates or tiered rates. For example, differential rates for geographic area or for type of provider. Describe: The Connecticut subsidy rates are regional with five regions and different weekly full-time, full-time plus, half- time and quarter time rates in East, North Central, Northwest, South Central, and Southwest regions and by age groups: Infant/Toddler, Preschool, and School Age groups. vii. If applicable, describe any additional add-on rates that you have besides those identified above. Licensed family child care providers and unlicensed relative provider can receive a 3% incentive for obtaining an associate’s degree in early childhood education. Does the Lead Agency reduce provider payments if the price the provider charges to private-pay families not participating in CCDF is below the Lead Agency’s established payment rate? [x] Yes. If yes, describe: The Care 4 Kids program pays the providers the lower of the two payment rates. For example, if the provider's rates are lower than the subsidy established payment rate, Care 4 Kids will pay the provider's lower rate. [ ] No. 4.3.4 Establishing payment rates Describe how the Lead Agency established payment rates: a. What was the Lead Agency’s methodology or process for setting the rates or how did the Lead Agency use their data to set rates? The Connecticut subsidy rates are set for five regions, with different weekly full-time (FT), full-time plus (FT+), half-time (HT) and quarter time (QT) rates based on setting type and age group. These are based on a calculation for a range of hours with cost calculated at ￿X￿ rate time # of hours, as follows: Full-time Care = hourly rate x 40 hours (35-50 hours); Full-time Plus Care= x 53 Hours (51-65 hours); Half-time Care = x 24 hours (16 to 34 hours): Quarter-time Care = x 12 Hours (1-15 hours). These rates were set by market rates from prior years by region in East, North Central, Northwest, South Central, and Southwest regions and by age groups: Infant/Toddler, Preschool, and School Age. Over time, the increases have been made in part based on a targeted Market Rate, and in some years by a flat percent increase. Most recently, in the Spring of 2023, rate increases were approved for Licensed Center, Exempt Center, Licensed Group and Licensed Family Child Care to increase by 11% for SFY 2024, and additional 11% for SFY 2025; and a third increase of 11% in SFY 2026, each increase above the prior year rates. Child Care subsidy rates by regions, age group, and hours of care. Center-based and Licensed Family Home rate increase from SFY 2023 to SFY 2024 = 11%, from 2024 to 2025 another 11% increase; and for SFY 2026, a third 11 % increase. During these same dates, Unlicensed Relative providers rates will increase by 6% in SFY2024, another 6% increase in SFY2025 and 6% in SFY 2026. Unlicensed Relative provider rates are relational to and exceeds Connecticut’s Minimum Wage if the provider has 3 children in care. In 2022, CT OEC negotiated a new contract with SEIU Family Child Care (FCC) providers, that contained a historic 3-year subsidy rate increase to retain current and attract new FCC providers. Additionally, OEC is working with SEIU on an FCC apprenticeship program. b. How did the Lead Agency determine that the rates are adequate to meet health, safety, quality, and staffing requirements under CCDF? Connecticut was cited for non-compliance for payments rates below the 50th percentile on April 20, 2023 based on the rates for licensed family child care which were below the 50th percentile of the market. The OEC continues to work closely with Governor's office and state legislature to increase payment rates by sharing with them the MRS and NCA in an effort to increase rates for the next legislative session budget. c. How did the Lead Agency use the cost of care, either from the narrow cost analysis or the ACF pre-approved alternative methodology to inform rate setting, including how using the cost of care promotes the stabilization of child care providers? Reviewing both the recent MRS and Narrow Cost Analysis, Connecticut’s Governor, Legislative and State Leadership, and the Office of Early Childhood Commissioner established a plan to reach toward increasing rates toward the 60th and 75th percentiles, over time. With the commitment to an 11% increase for each year for three consecutive years, to the licensed providers and a 6% increase for each of three years, to unlicensed relative providers, allows for a balance in the number of families able to receive child care subsidy within the State and Federal budget allotments. d. How did the Lead Agency account for the cost of higher quality while setting payment rates? Connecticut payment rates are differentiated between Licensed Center-based, Licensed Family Homes and Unlicensed Relative Care. The licensed programs receive higher subsidy rates, and if accredited, receive an additional 25% if Center-based and an additional 12.5% for accredited licensed family settings. For several years, over 80% of children in the subsidy program are in licensed settings. Over 40 percent of the children in Licensed Centers are in accredited centers. And 9% of children in Licensed family settings are in accredited setting. This equates to 26% of all children served in Care 4 Kids are in accredited settings. e. Identify and describe any additional facts (not covered in responses to 4.3.1 – 4.3.3) that the Lead Agency considered in determining its payment rates to ensure equal access. A key component of Care 4 Kids provider eligibility is a variety of child care provider setting from Licensed to License-Exempt Centers, Licensed Group and Family Home Child Care, and Unlicensed Relative Care, in all regions in the state, allowing families to choose a provider that fits their and their child’s needs, including type of care and location in relation to home, work or training and education. The family chooses the child care provider and establishes a Parent-Provider Agreement. Care 4 Kids pays a maximum base rate as defined in the weekly payment rate charts. https://www.ctcare4kids.com/wp- content/uploads/2024/01/Care-4-Kids-Weekly-Payment-Rates-July-1-Jun-30-2025.pdf. In addition, the Family Fee share is a subset of the rate so that the provider receives the full maximum rate with the family paying a portion and the C4K program paying the balance. The Family Fee is based on percent of household income and is the total amount for all children in the program. If a monthly family fee is $100 and the family has 3 children in the program, the $100 will be split across the children’s certificates with for instance, %50 assigned to the Infant care, plus $30 assigned to preschool child and $20 assigned to the school age child. The Family Fee is based on Income range as a percent of State Median Income. Family Fee equals 2% of Household Income for Incomes between 0%-20% or SMI, 4% for 20%-30% SMI, 6% for 30%-40% SMI, 8% for 40%-50% Smi, and 10% for 50% SMI or higher. Connecticut is discussing changes to the Family Fee to reduce it to a maximum of 7% but, will be requesting a waiver of this requirement for the next two years in order to balance the change in fees to the program to offset by a reduction in the number of families served.