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: [x] Sets the same payment rates for the entire State or Territory. [ ] 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). 10/1/2024 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)? Monthly rates were divided by 4.3. 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) 1230.0 0 Per Month 100.00 286.00 60.00 1180.0 0 1230.0 0 1325.0 0 Family Child Care for Infants (6 months) 850.00 Per Month 100.00 198.00 60.00 840.00 850.00 900.00 Center Care for Toddlers (18 months) 1230.0 0 Per Month 100.00 286.00 60.00 1180.0 0 1230.0 0 1325.0 0 Family Child Care for Toddlers (18 months) 850.00 Per Month 100.00 198.00 60.00 840.00 850.00 900.00 Center Care for Preschool ers (4 years) 875.00 Per Month 100.00 203.00 60.00 823.00 875.00 969.00 Family Child Care for Preschool ers (4 years) 710.00 Per Month 100.00 165.00 60.00 680.00 710.00 750.00 Center Care for School- Age (6 years) 660.00 Per Month 100.00 153.00 50.00 660.00 694.00 755.00 Family Child Care for School- Age (6 years) 640.00 Per Month 100.00 149.00 50.00 640.00 650.00 700.00 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) Family Child Care for Infants (6 months) Center Care for Toddlers (18 months) Family Child Care for Toddlers (18 months) Center Care for Preschool ers (4 years) Family Child Care for Preschool ers (4 years) Center Care for School- Age (6 years) Family Child Care for School- Age (6 years) 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? [ ] 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: [x] 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: Children with special needs may qualify for a higher rate each month if documentation establishes that additional child care supports are needed to care for the child. Children ages two and older with special needs are subsidized at the infant rate in the provider tier being used. For example, a subsidy for a 5-year old with special needs in a family licensed home setting is determined using the family licensed home infant rate. Infants with special needs are subsidized at the infant rate of the next higher provider tier. For example, a subsidy for a child 0-23 months with special needs in a residential certificate setting is determined using the licensed family infant 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. [ ] Differential rate for higher quality, as defined by the Lead Agency. Describe: vi. [x] Other differential rates or tiered rates. For example, differential rates for geographic area or for type of provider. Describe: Tiered rates are set using market rate data and are based on provider type and age of the child. vii. If applicable, describe any additional add-on rates that you have besides those identified above. 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 Lead Agency compares the established (1) maximum monthly rate based on the market rate study, (2) the provider’s published charge posted in the Care About Childcare website (or custom rate, if reported to the agency) and (3) the participation rate (part-time or full-time tiers) of the customer and pays the lowest of the three amounts. [ ] 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 Lead Agency used data collected from the most recent 2024 Market Rate Study and the cost estimation model used to complete the narrow cost analysis. The Lead Agency compared the market rates to the estimated cost of care at each level of Utah’s Child Care Quality System (CCQS). b. How did the Lead Agency determine that the rates are adequate to meet health, safety, quality, and staffing requirements under CCDF? The Lead Agency determined rates are adequate to meet health, safety, quality and staffing requirements by analyzing the market rates and the estimated cost of care at each level of Utah’s Child Care Quality System (CCQS). For licensed family providers, the subsidy rates exceed the estimated cost of care for the Certified Foundation of Quality CCQS rating in all age groups except for children ages 6 and older. 80% of licensed family providers who accept subsidy payments charge at or below the subsidy base rate for school age care. For licensed centers, rates were set at the 60th percentile of the 2024 market rate study for children ages 0-5. This compares to 80% of the Certified Foundation of Quality CCQS rating for infants and toddlers and 90% of the Certified Foundation of Quality CCQS rating for four-year olds. For school age children, although the subsidy rate was set at the 50th percentile, this rate exceeds the estimated cost of Certified High Quality and High Quality Plus CCQS rating by over 105 percent. 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? Rather than solely basing rates on the market rate study, the Lead Agency was able to utilize the cost estimation model used for the narrow cost analysis to inform decisions about rate setting. For example, the cost of care study supported the decision to raise the rates for school age children to the 50th percentile of the 2024 MRS since these rates exceeded the cost of the Certified High Quality Plus CCQS rating. Although the rates for other age groups were not increased to the 75th percentile, the cost estimation model was helpful in identifying where to prioritize any additional funding and the need to re-examine current policies. d. How did the Lead Agency account for the cost of higher quality while setting payment rates? Licensed centers and licensed family child care providers who receive a certified high quality or high quality plus rating in Utah’s QRIS, the Child Care Quality System (CCQS), are eligible to receive an Enhanced Subsidy Grant. The Enhanced Subsidy Grant is a monthly payment in addition to the regular subsidy payment the program receives and is based on the average number of children served in the 12-month CCQS documentation period that had their care paid for through the child care subsidy program. For licensed centers, the average number of children is multiplied by $175 for High Quality ratings and by $200 for High Quality Plus ratings to calculate the monthly Enhanced Subsidy Grant. For licensed family child care providers, the average number of children is multiplied by $100 for High Quality rating and $125 for High Quality Plus ratings to calculate the monthly Enhanced Subsidy Grant. Although the Enhanced Subsidy Grant does not cover the full difference between the base subsidy rates and the cost of high quality care, it moves the total amount closer to the cost of high quality care to begin to close the gap. Adding the enhanced subsidy grant to the base subsidy rates increases the total amount a provider receives to above the 75th percentile of the market rate survey in all age groups for licensed centers and licensed family programs. For the 0-23 month age group (and several others), the total amount exceeds the 80th percentile for both licensed centers and licensed family providers. 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. N/A