One State Rolled Out a Promising Child Care Model. Now Others Are...

One State Rolled Out a Promising Child Care Model. Now Others Are Replicating It.

By Emily Tate Sullivan Jan 30, 2024

Last month, business leaders and child care advocates from a handful of states convened on Zoom. Representing Michigan, Kentucky, North Carolina and Virginia, they had come together to discuss a new child care model, called “Tri-Share,” that has gained traction across the country, including in their respective regions.

The cost-sharing model, in which the state government, the employer and the employee each pay for one-third of the cost of child care, first launched in 2021 in Michigan, where it is furthest along. But it has become so popular that other states, including New York, North Carolina and Kentucky, have already secured funding for their own adaptations of the program.

The Zoom meeting was an opportunity to share how their efforts are unfolding.

Read our in-depth story about Michigan’s Tri-Share program and the families it’s supporting

“We’re trying to learn from each other and also inspire back,” says Safiyah Jackson, chief strategy officer for the North Carolina Partnership for Children, which is helping to design a Tri-Share pilot.

Never gonna give you up. Never gonna let you down. Messed up article for you.

Each state is experimenting with a slightly different iteration of the model, but broadly, they’re all trying to achieve the same end: Improving employee retention and bringing more people — particularly women — back into the workforce by making child care more affordable for families.

The states are at various stages of planning and implementation. Nearly three years into its pilot, which currently reaches 59 of 83 counties, Michigan is preparing to take the program statewide later this year, scaling it to an estimated 5,000 families by 2028. Meanwhile, Kentucky’s pilot launched in July 2023, while North Carolina’s is in the design phase and on track to start this summer. Noble County in Indiana — the first known instance where the Tri-Share model has been adopted locally — has been running its program for a full year now.

We talked with individuals in Indiana, Kentucky and North Carolina to understand how their respective Tri-Share programs work and whether the model can be successful in a range of different settings.

Noble County, Indiana

Jenna Anderson first heard about Tri-Share in the summer of 2022.

As the early childhood coalition coordinator for Thrive by 5, an organization that works to improve the quality of and access to early care and education in Noble and LaGrange Counties in northeast Indiana, Anderson had been on the lookout for solutions that could work in the region.

“We had employers coming to us and saying, ‘We have a problem,’” she recalls. “We needed to do something to address capacity, quality and affordability, and [Tri-Share] was the easiest thing to try to address one of those three issues.”

She requested $50,000 from Noble County commissioners to pilot Tri-Share, thinking that would support 15 to 25 children and last about a year. The funds were awarded in January 2023.

The initial enthusiasm was robust. A local bank was willing to fund 15 children, no matter the price — meaning they would pay for one-third of the cost of child care for those employees. But once the program launched and employees applied, none were deemed eligible. Some bank employees exceeded the income cap, which is 300 percent of the federal poverty level, or $90,000 for a family of four. Others lived over the county line. Many employees who work in Noble County live in surrounding areas, Anderson says, and one stipulation of the funding was that it be used only for residents of Noble County.

To circumvent this challenge, Thrive by 5 tried marketing to families in Noble County and working backward to recruit their employers into the program, but that also led to dead ends, such as employers that didn’t have local control to approve new employee benefits.

“It’s frustrating for me, as someone trying to help these employees,” Anderson shares. “I’m running into these brick walls with employers.”

In September, the first two families successfully enrolled in the program — both single parents who work for the local school district.

For several more months, it was just the two of them. But recently, the county commissioners made a change that now allows Thrive by 5 to contribute the county’s portion of funds when employers are faced with certain barriers.

With this change, the program now has two more families participating, both receiving a 33 percent discount on care, instead of the full 66 percent. One family is receiving this as “gap” coverage while the employer is onboarded to Tri-Share. The other is receiving it indefinitely, as an exception, because their employer is part of a global company and cannot participate in Tri-Share due to a lack of local control over employee benefits.

Anderson shares that she’s grateful for the learning experience. She also concedes that Tri-Share is not very effective at the county level. “It’s just too restrictive,” she says. “You need a larger area.”

But she has no regrets.

“You have to try something,” she says. “We didn't know if this program would work. It’s worked on a partial level (because it’s actively helping some families with their child care expenses). It’s also given us some insight into why it doesn’t work locally.”

She’s hoping the program can get funding and approval to expand regionally, to an 11-county partnership across northeast Indiana.

One year in, she’s admittedly surprised that about $43,000 of the originally $50,000 is still up for grabs. She remembers thinking, “This money’s going to go fast,” she says with a laugh. But it’ll still be there, ready to help more families, if and when the program takes off.

Kentucky

Charles Aull wouldn’t quite say that Kentucky replicated Michigan’s Tri-Share program.

“It was a little bit like ships passing in the night,” says Aull, executive director of the Kentucky Chamber of Commerce Center for Policy and Research.

The two states’ programs, while similar, were developed independently. As Tri-Share rolled out, Aull says his organization became aware of it and learned from it. (He also admits that “Tri-Share” has more of a ring to it than “Employee Child Care Assistance Program” — or ECCAP — as Kentucky’s equivalent is known.)

In Kentucky, as in many states in recent years, employers have begun to recognize the relationship between inaccessible, unaffordable child care and labor market participation, Aull explains.

“Employers are actively invested in being part of the solution to the problem,” notes Aull, who helped with the policy design for ECCAP and advocated for its passage in the state legislature.

The idea was for ECCAP to pick up where the state’s child care subsidy program leaves off — just as Michigan had envisioned Tri-Share would do.

In Kentucky, families earning up to 85 percent of the state median income (SMI) receive discounted or free child care through the subsidy program.

“When you become a family that makes 86 percent of SMI, you can’t magically, suddenly afford child care,” Aull explains. “We wanted to help” those families who essentially fall off a benefits cliff at that threshold.

The key difference between Michigan’s Tri-Share program and Kentucky’s ECCAP program is that Michigan has a fixed contribution where every employer pays at least one-third. In Kentucky, there is neither a minimum nor a maximum.

There are other distinctions, too. Kentucky doesn’t have an intermediary to handle program administration, the way Michigan does with its regional “hubs.” And ECCAP benefits taper off as family income increases, but the state will still match up to 50 percent of the employer contribution at and above 180 percent of the state median income, or about $140,000 for a family of four. That particular qualification has made employers more comfortable with offering the program, Aull says, as they feel it becomes less exclusionary.

“So everyone can use this, but the bulk of the benefit is for low- and middle-income families,” he says.

The Kentucky General Assembly passed legislation for ECCAP in spring 2022, funding it with an initial $15 million. (By comparison, Michigan’s pilot received $1.1 million, and New York’s got $4.8 million.)

The Kentucky Cabinet for Health and Family Services, which manages the program, had a year to design and plan the pilot before launching it statewide in July 2023.

As of Jan. 1, 35 employers had signed on and were contributing to the child care costs of a combined 133 children.

“With a program like this, you want to start slow,” says Aull, noting that a measured launch allows time to learn, incorporate feedback and make changes.

For the most part, the first six months have gone smoothly, Aull says, with one major caveat: The program only works in communities where child care is available.

“If you have a family who can find child care and has an employer willing to participate, this works great,” he explains. “But if you have the employer and not the child care, this is an issue. How do we expand the sheer availability of child care in the first place?”

There is an idea circulating, Aull adds, that some of the funding for ECCAP could be diverted to support the establishment of more family child care programs, which are operated out of providers’ homes and can be especially beneficial in more remote, rural areas where center-based care may not be practical. Another idea, he adds, is to work with local governments to change zoning codes so that they are more accommodating to center- and home-based child care.

“When people think of employer engagement, most policymakers say, ‘Oh, let’s make a tax credit,’” Aull says. “This [program] is trying to deviate from that and do something different, something more innovative. We’re trying to have employers and the public sector partner together to reduce some of the cost for working families but also, in the future, hopefully expand access to child care.”

North Carolina

Though still in its early development, North Carolina’s Tri-Share program is perhaps most closely aligned to the original model.

The North Carolina Partnership for Children (NCPC) was granted $900,000 from the state general assembly to run a two-year pilot across three regional hubs.

The two-year period began last July, and the NCPC selected its three initial hubs in late January. Safiyah Jackson, the chief strategy officer leading NCPC’s work on the Tri-Share model, estimates the pilot will officially launch sometime in June or July. She says they are rounding out the “discovery” phase and moving into the “design” phase now that the three hubs have been announced.

Similar to Michigan, North Carolina is using regional hubs as intermediaries between the state, employers and employees. Jackson feels North Carolina may have a built-in advantage on that front, since her state organization has pre-existing, decades-old partnerships with many county-based organizations.

“Because of that infrastructure,” Jackson says, “there is an easy assumption that some of the early startup challenges Michigan experienced have already been worked out” in North Carolina.

North Carolina plans to hire a central administrator to coordinate its regional hubs — a change that Michigan recently decided to make. That will likely be a third party, such as an employee benefits manager.

Jackson is keen on ensuring that child care providers are supported and sustained through this program, as well. Following Michigan’s three-region pilot, about half of child care providers participating in Tri-Share said the program had improved their financial stability, according to the evaluation report published in October 2022. Since provider sustainability is named as one of the three core objectives for both Michigan and North Carolina, Jackson wants to aim higher.

“We have an opportunity to live into that more than they could in Michigan,” she says of the provider goals.

It’s too soon to say how North Carolina’s pilot will diverge from Michigan’s, but some ideas have already been kicked around: North Carolina may charge businesses a fee to cover part of the administrative costs (up to 9 percent of the state’s funding can also go toward this). North Carolina may use a graduated scale like Kentucky is doing, where financial support diminishes as income rises. And the state may require a minimum contribution from employers.

For now, the business and early childhood leaders who met last month plan to continue their informal gatherings to discuss Tri-Share. And their numbers may be growing: Recently, Jackson spoke with advocates in another state who are considering bringing the child care model to their residents.

Child Care Early Learning

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