KRS 199.883: Employee Child Care Assistance Partnership Program -- Cabinet to

regulate program -- Powers and duties of third -party administrator --

Publication of reports.

(1) The Employee Child Care Assistance Partnership Program is hereby established

under the cabinet. To administer the program, the cabinet may:

(a) Delegate authority to a subsidiary department; and

(b) Coordinate and share information with other executive branch agencies.

(2) The cabinet shall oversee and regulate the program, and a pri vate entity contracted

by the cabinet shall administer the program.

(3) (a) By December 1, 2026, the cabinet shall enter into a contract with a private

entity to administer the program as the third -party administrator. The cabinet

may utilize administrativ e funding from the fund, in accordance with KRS

199.885, to carry out this contract.

(b) To provide incentives for a third-party administrator to enroll more employers

and employees in the program, the cabinet shall enter into an agreement in

which a third -party administrator is allowed to retain a percentage of the

employer contribution or state match, or some combination thereof, for each

administered contract, as determined by the cabinet. The cabinet may offer

additional incentives tied to specific performance metrics.

(c) The cabinet shall routinely audit any third -party administrator responsible for

administering the program to ensure compliance with state laws and

administrative regulations.

(d) The cabinet shall establish a transition plan for employ ers already

participating in the program at the time of selecting a third-party administrator

to ensure a smooth transition for providers, employers, and employees.

(4) The cabinet shall partner with a nonprofit entity serving communities in each of the

fifteen (15) area development districts established in KRS 147A.050 to promote and

raise awareness of the program. This work shall be conducted in coordination with

the th ird-party administrator. Partnerships shall be voluntary and optional for

designated nonprofits. The cabinet may use administrative funds in accordance with

KRS 199.885, or other funds, for the purposes of this subsection.

(5) In accordance with a contract entered into with the cabinet under this section, the

third-party administrator shall be responsible for:

(a) Creating and making available via a digital dashboard an accessible and easy -

to-use standardized application and contract for participation in the program;

(b) Using technology and digital tools to process applications and contracts

between an employer, employee, and child -care provider that is submitted to

the third-party administrator;

(c) Notifying the parties of their enrollment status in the program;

(d) Managing and administering the program funds under the cabinet's

supervision and direction;

(e) Securing third-party subcontractors in accordance with all applicable federal

and state procurement regulations, if deemed necessary;

(f) Verifying the eligibility of the respective employee, employer, and child -care

provider as parties to a contract for participation in the program prior to

disbursement of a state match;

(g) Collecting and verifying household income information from eligible

employees and determining the amount of the state match for which the

employee is eligible;

(h) Distributing educational materials about the program's objectives, benefits,

and eligibility requirements to employers, employees, and child -care

providers;

(i) Ensuring that application and reapplication processes under this program for

employers and employees are simple and efficient;

(j) Ensuring that compliance with and utilization of the program is simple and

efficient for all parties;

(k) Ensuring that application and reapplication processes and contracts for this

program are accessible and available in multiple formats, including but not

limited to digital and paper formats, and that applications and contracts are

allowed to be submitted by various means, including but not limited to digital

platforms, first-class mail, and email;

(l) Responding to inquiries and requests for assistance from all parties in a timely

and efficient manner;

(m) Providing routine updates to all parties on the status of contracts and

payments;

(n) Issuing state matches from the fund to child-care providers in a timely manner

and in accordance with individual contracts;

(o) Receiving contributions from employers and dispersing them to child -care

providers in a timely manner and in accordance with individual contracts;

(p) Creating an efficient preapproval process for employers, employees, and

child-care providers interested in participation in the program; and

(q) Creating a streamlined reapplication process for existing contracts which

parties are requesting to renew.

(6) The third -party administrator shall review the completed contract after it is

submitted by the employer and within ten (10) business days, notify the parties of

approval, disapproval, or request additional information. If the employee, employer,

and the proposed child -care provider meet program eligibility requirements, the

third-party administrator shall agree to match, from the fund, the contribution made

by the employer up to one hundred percent (100%) of the cost of the e mployee's

eligible child-care costs. Any denial of a contract shall include an explanation of the

exact reasoning for why the contract was denied.

(7) The third-party administrator shall only become party to a proposed contract under

this program if the fund reflects a positive balance based on both:

(a) Existing contractual obligations already accrued under this program; and

(b) Additional financial obligation imposed by the proposed contract under this

program.

(8) The third-party administrator shall not agree to become party to a proposed contract

pursuant to this program if the corresponding financial obligation would cause the

fund to accrue a negative balance.

(9) The third-party administrator shall maintain a waitlist of contracts submitted after

available funds were committed. The third -party administrator shall become party

to a proposed contract from the waitlist as new funds become available and

according to the order in which it was received.

(10) The third -party administrator shall issue a state match directly to the child -care

provider for the duration of the contract.

(11) The third-party administrator shall not disclose an employee's personal information

without that individual's express written consent.

(12) Beginning in 2026 and every year th ereafter, the third -party administrator shall

begin accepting proposed contracts under this program from employers, employees,

and child-care providers for the next fiscal year according to the following:

(a) Ninety (90) calendar days before July 1 for employers with existing approved

contracts pursuant to the program; and

(b) Forty-five (45) calendar days before July 1 for all other employers.

(13) The cabinet shall publish reports detailing the efficacy of th e program by July 15

and January 15 of each year and shall submit the report to the Legislative Research

Commission for referral to the Interim Joint Committee on Families and Children.

The report shall include at least the following information about the program:

(a) Any appropriation made in the past fiscal year to the fund;

(b) The total number of standardized contracts submitted by employers;

(c) The total amount of state matches paid out of the fund by the cabinet;

(d) The breakdown of the state matches paid by county;

(e) Information on the size, geographical location, and industry type of employers

who participated in the program;

(f) The number, license type, quality rating, and geographical distribution of

participating child-care providers;

(g) The average cost for services charged by child -care providers participating in

the program and information on how these costs have increased or decreased

during the most recent reporting period and previous reporting periods;

(h) The number and total dollar value of contracts not approved by the cabinet;

(i) The demographic information of employees participating in the program;

(j) The number of employers participating in the program; and

(k) Recommendations for improving the program and how to give employers

more options to utilize the program in order to support access to affordable

child care services in the Commonwealth.