System updates 2023
Prioritized State Child Care System Investments
The State of Indiana is dedicated to increasing access to and the sustainability of early learning opportunities for children and families qualifying for Indiana’s child care assistance programs. As part of this commitment, Indiana has recently announced two new investments to support families: increased income eligibility requirements for families to qualify for CCDF and On My Way PreK, and new CCDF reimbursement rates for providers. Together, these two initiatives will help approximately 11,000 more children and families across the state to access child care assistance while supporting the sustainability of providers who serve them. This page offers additional detail for providers and community members regarding the upcoming changes.
Increase in Income Eligibility for Child Care Assistance
Effective July 1, 2023, initial family income eligibility for CCDF and On My Way PreK (OMWPK) will increase from 127% of the federal poverty level to 150% - which equals around $45,000 in annual income for a family of four. This expansion will create access for approximately 11,000 more Hoosier children and families to receive assistance.
Following required system changes, families may begin applying for CCDF under the new rates on August 1 through Early Ed Connect. OMWPK families should continue to apply and have their eligibility determined to ensure they are enrolled to start the school year on time.
OECOSL has developed communication toolkits for both child care providers and community stakeholders to help them share information about expanded eligibility with families. To get started, access the provider toolkit here and the community stakeholder toolkit here.
Frequently Asked Questions
- Why is family income eligibility for child care assistance being expanded?
- Income eligibility for CCDF and OMWPK child care assistance programs is being expanded to ensure that more hardworking Hoosier families can access affordable, quality child care. This initiative has been driven by leadership from Governor Holcomb and the Indiana General Assembly. High-quality early learning programs give children a firm foundation heading into kindergarten and allow parents and guardians access to the workforce to provide for their families.
- What are the new family income eligibility requirements?
- Families that earn up to 150% of the federal poverty level will now be eligible for child care assistance through the CCDF and OMWPK programs. Federal poverty level is based on household size. Review this chart for more details.
- How can families apply for CCDF or OMWPK child care assistance?
- Families can determine their eligibility and apply for child care assistance through the Early Ed Connect portal.
- How will these changes affect families who are currently receiving child care assistance through CCDF or On My Way PreK?
- Families currently receiving CCDF assistance will not be affected. These families remain eligible until the end of their subsidy period. At time of eligibility redetermination, if they maintain eligibility, their family co-pay and any provider overage will be calculated based on income, years in the program and provider charges. The percentages used for these calculations remain unchanged. Families currently enrolled in OMWPK and under the 127% income threshold will also not be affected. However, currently enrolled OMWPK families who qualified for limited eligibility with income between 128%-150% FPL prior to August 1, 2023 will see changes. Their vouchers will be adjusted to offer additional weeks and reimbursements once the system updates are in place. Families will not need to reapply or submit any additional income paperwork.
- When can families begin to apply for assistance under the expanded income eligibility?
- Families may begin applying for child care assistance through CCDF under the new rates on August 1 through Early Ed Connect. Families applying for On My Way Pre-K s do not need to wait until August 1 and should continue to apply and have their eligibility determined to ensure they are enrolled to start the school year on time.
- How will the state notify families of the expanded eligibility for child care assistance?
- OECOSL is working with early care and education providers to promote this opportunity to families currently enrolled in care to ensure they are aware of and are taking advantage of this opportunity. Additionally, OECOSL will also conduct outreach to families who have recently applied for assistance through Early Ed Connect but were disqualified due to the prior income threshold and will be notifying eligible families with incomplete child care assistance applications about the change.
- How can child care providers and community stakeholders help to share this opportunity with families?
- Early care and education providers are encouraged to share information about expanded eligibility with families too. OECOSL has developed communication toolkits for both child care providers and community stakeholders to help them do so. To get started, access the provider toolkit here and the community stakeholder toolkit here.
Click here to see the FPL table
New Child Care Assistance Reimbursement Rates
To ensure equitable child care access for families, states must assess market rates and child care costs every three years to inform child care assistance reimbursement rates. With market fluctuations during the pandemic, Indiana opted to delay rate changes. Instead, it issued a temporary 20% increase for all assistance payments to offset increasing child care costs. Increases took effect in April 2021 and continue today.
Historically, rate structures were based on market rate surveys. While an important input, market rates do not always reflect the difference between child care costs and a family's ability to afford it. To better understand costs, Indiana embarked on a comprehensive analysis of cost-modeling data beginning in 2021 using Stabilization Grant applications. To date, cost data has been collected by age group, provider type and quality level for 3,100+ providers and 8,984 classrooms across early childhood and school-age programs.
Indiana’s new cost-based approach for setting reimbursement rates helps to provide an understanding of the actual cost of care per child to ensure that providers are reimbursed accordingly. This is done by focusing on cost drivers, which allows providers across auspices, quality levels, geography and the age groups they serve to be compared on an "apples-to-apples" basis.
Additionally, the new model accommodates the realities of child care services, including shifting daily schedules, flexible staffing models and classrooms that open, close or are converted to other age groups (e.g., before-/after-school care) depending on the time of day.
Using this new model, OECOSL is introducing a transitional rate structure from July 30 through fall 2024 when the state must reassess and introduce a permanent structure. When the new transitional rates take effect on July 30, Emergency Relief Grants will cease. New rates offer a minimum 20% increase across all payments and additional increases for specific providers and care types where cost data showed inequities. These included notable increases, for example, for providers serving infants and toddlers in Licensed Centers and Registered Ministries.
A public comment period was hosted for providers and community members to share their feedback. The state will continue seeking providers' feedback to evolve the model during this one-year transitional period.
Rates will take effect on July 30, 2023. Providers should expect to see the new structure applied to payments received on August 30, 2023.
Frequently Asked Questions
- How is Indiana changing its approach to setting child care assistance reimbursement rates?
- Reimbursement rate structures have historically been based on market rate surveys. While an important input, market rates do not always reflect the difference between child care costs and a family's ability to afford it. Indiana’s new cost-based approach for setting reimbursement rates helps to provide an understanding of the actual cost of care per child to ensure that providers are reimbursed accordingly. This is done by focusing on cost drivers, which allows providers across auspices, quality levels, geography and the age groups they serve to be compared on an "apples-to-apples" basis.
Additionally, the new model accommodates the realities of child care services, including shifting daily schedules, flexible staffing models and classrooms that open, close or are converted to other age groups (e.g., before-/after-school care) depending on the time of day.
- Reimbursement rate structures have historically been based on market rate surveys. While an important input, market rates do not always reflect the difference between child care costs and a family's ability to afford it. Indiana’s new cost-based approach for setting reimbursement rates helps to provide an understanding of the actual cost of care per child to ensure that providers are reimbursed accordingly. This is done by focusing on cost drivers, which allows providers across auspices, quality levels, geography and the age groups they serve to be compared on an "apples-to-apples" basis.
- How did Indiana determine child care costs for the new reimbursement rate structure?
- To better understand the actual costs of child care, Indiana embarked on a comprehensive analysis of cost-modeling data beginning in 2021 using Stabilization Grant applications. To date, cost data has been collected by age group, provider type and quality level for 3,100+ providers and 8,984 classrooms across early childhood and school-age programs. The state reviewed a comprehensive set of cost factors, including class sizes, hourly wages and benefits, facility size and cost per square foot, child assessments and more.
- What will the new reimbursement rates be for providers?
- New rates offer a minimum 20% increase across all payments and additional increases for specific providers and care types where cost data showed inequities. Notable increases, for example, can be seen for Infants and Toddlers in Licensed Centers and Registered Ministries. Please refer to the Provider Reimbursement Rates webpage for more details.
- I am a provider whose market rate is increasing. Will I need to charge private pay families more to match the new reimbursement rate?
- The new rates reflect the cost of providing child care across specific settings, geographies, seat types and quality levels. While providers are not required to align their rates with the new reimbursement rates, they may choose to do so. This is a business decision to be made by providers. You will still receive the new reimbursement rate regardless of what you charge to families.
- Can I charge separate rates for private pay and CCDF families?
- Regardless of what rate a provider decides to charge, that rate should be consistent across payer types. Providers may issue scholarships or use a sliding fee scale if they wish but should be charging private pay and CCDF families the same base rate for care.
- Do I need to submit a provider change form to receive these new rates?
- No. Please note that you may choose to change your rate at any time, but voucher rates will remain the same throughout the entire voucher period until redetermination.
- Will On My Way Pre-K providers continue to receive a 10% increase on top of reimbursement rates?
- No. Additional expenses for OMWPK programs were calculated in the new cost-based model and are reflected in the new rates. Based on this new model, On My Way Pre-K providers will no longer receive the additional 10% increase on top of reimbursement rates.
OECOSL will be discussing these changes with OMWPK programs during fall kick-off meetings. Scheduling details for these meetings are forthcoming. - Will On My Way Pre-K providers continue to receive a 10% increase on top of reimbursement rates?
- No. Based on this new cost-based model, On My Way Pre-K providers will no longer receive the additional 10% increase on top of reimbursement rates.
- What supports will be available to providers to better understand and share costs with the state?
- Technical assistance will be available to child care providers through SPARK Learning Lab’s business supports.
- How long will the new reimbursement rates remain in effect?
- The new reimbursement rates will go into effect on July 30, 2023. Providers should expect to see the new structure applied to payments received on August 30, 2023. These rates will continue through fall 2024, when the state must reassess and introduce a permanent structure.
- How can I share my feedback about the new reimbursement rates and inform future costs and rate structures?
- A public comment period was hosted for providers and community members to share questions and feedback. The state will continue seeking providers' feedback to evolve the model during this one-year transitional period.