Indiana would match employer child care payments when funds allow

Indiana's family resources division would pay matching money to a child care provider under an approved program contract. The division would check the worker, employer, and child care provider before paying a state match. The state match could not exceed the smaller of the employer's payment and the full cost of care. The division could join a contract only if the fund could cover its existing obligations and the proposed contract. The proposed program would take effect July 1, 2026, if enacted.

The division would check whether workers, employers, and child care providers qualify before paying a state match. Participating workers would need to work in Indiana. An employer would need at least one worker in Indiana in each of 20 or more calendar weeks this year or last year. A care provider would need a Level 3 or 4 rating under Indiana's Paths to QUALITY program or a comparable rating from a nationally recognized accreditor. These proposed eligibility rules would take effect July 1, 2026, if enacted.

Indiana would set aside money for the program each year, and the division would direct 25% of the fund to small business contracts. The allocation would apply to contracts with small businesses in the child care program. An employer would count as a small business if no more than 49 of its employees work at least 35 hours a week. The funding and small business allocation would apply each state fiscal year after the proposed July 1, 2026, start.

Employers would report when a participating worker leaves, and care providers would report missed employer payments. These duties would apply to employers and care providers with active program contracts. An employer that fails to report a worker's departure would have to repay unnecessary state payments made afterward. After a provider reports a missed employer payment, the division would pause its match and give the employer five business days after notice to pay. A provider that fails to report a missed employer payment and keeps receiving state payments would have to repay those unnecessary payments. Employers would have three business days after a worker leaves to notify the provider and state. Providers would have five business days after a missed employer payment to notify the state.