Collecting Family Fees FY 2020-21

Attention: Executive and Program Directors of CDE State Subsidized Early Learning and Care Programs

The California Department of Education (CDE), Early Learning and Care Divsion (ELCD) would like to thank local partners and programs for all your efforts in supporting children and families during this incredibly difficult time. We acknowledge each and every one of you who are continuing to support the children and families of California. Whether you are currently open, preparing to open, or offering early learning and care (ELC) distance learning, the ELCD acknowledges your need for guidance at this time. We appreciate your efforts and have been working hard with the Legislature and the Administration to provide the direction you need.

The Legislature passed Senate Bill (SB) 820 on August 31, 2020, which includes additional directives around family fees. SB 820 is now awaiting the Governor’s signature. When it is signed, the bill’s additional directives around family fees will become law and the CDE will issue a Management Bulletin (MB) and work with all of you to implement it as part of state law.

While normally the ELCD would wait until the bill is signed by the Governor to issue guidance, there is an immediate need to provide interim guidance so that contractors may take steps to implement this impending legislation.

Family Fee Waivers for July and August 2020

On July 28, 2020, contractors were notified via an email to subscribers of the ELCD distribution list that family fees for all families were waived for July and August 2020. As a reminder, pursuant to California Education Code (EC) Section 8227.7, Alternative Payment (AP) contractors are required to notify providers of changes to family fees on the same day the notice is issued to a family. Contractors must issue a refund or a credit for future services to families that have paid fees for July and/or August 2020, services based on the contractor’s internal policy for refunds/credits of those fees.

For family fees that have already been refunded or credited for future services, contractors are to maintain documentation for review; there is no need to issue an additional Notice of Action (NOA). If the AP contractor has not already done so, the AP contractor must share with the provider the NOA or other form of communication provided to the family for family fees that have already been refunded or credited.

For family fees not already refunded or credited, contractors must document the waived family fees for July and August and indicate the action taken to refund family fees or credit for future services. The AP contractor must share with the provider the NOA or other form of communication provided to the family for family fees that will be refunded or credited. The deadline for processing any refunds or credits of family fees for July and August fees is October 31, 2020. Contractors who cannot meet this deadline must contact their ELCD Program Quality Implementation Office Regional Consultant as soon as possible.

If contractors have available space and available funding, the CDE strongly encourages contractors to reach out by email and phone to any families who were involuntarily or voluntarily disenrolled due to family fees to determine whether they would like to reinstate their services before enrolling families from their wait list. If contractors do not have available space to reinstate the family’s services, the contractor should refer the family to the local Resource and Referral program for additional child care options. Families that were disenrolled by the contractor or chose to disenroll due to the imposition of family fees for July and August 2020, can be reinstated without the need for additional eligibility documentation. Contractors must inform these families of the applicability of family fees, starting in September, based upon their choice of in-person or ELC distance learning service delivery options and sheltering-in-place as set forth below. As always, the AP contractors should continue to work with families to ensure retention of certified childcare services. Any change to the certified need must be based upon a request by the parent in accordance with EC 8263(h).

Family Fees for September through June 2021

The Legislature has been working on an agreement with the Administration to address the issues of family fees for September 2020 through June 2021. This agreement is captured in Senate Bill (SB) 820, which the Legislature passed on August 31, 2020. SB 820 specifies that family fees would be waived for the remainder of the year only for families not receiving in-person services due to ELC distance learning or sheltering-in-place (sheltering in place is defined as not attending care because of COVID-19). SB 820 is now awaiting the Governor’s signature.

When the Governor signs SB 820, family fees will be waived from September 1, 2020, to June 30, 2021, for families where all children in the family enrolled in subsidized ELC services remain at home, either for ELC distance learning where all children are not receiving in-person services, or for families sheltering-in-place. Unlike the family fee waiver policy for July and August 2020, SB 820 does not waive family fees for all families for September 2020 through June 2021.

While normally the ELCD would wait until the bill is signed by the Governor to issue guidance, there is an immediate need to provide interim guidance so that contractors may take steps to implement this impending legislation. When the bill is signed, this will become law, and CDE’s role will be to implement the new law.

Families whose children receive in-person care will continue to pay the family fee per the current NOA on file. Pursuant to Section 18084.2(a) of the 12-Month Eligibility Implementation Guidance issued with Management Bulletin (MB) 17-14, families may request a reassessment of family fees based on income or other changes. This information can be used to reduce family fees, but cannot be used to make any other changes to a family’s service agreement. For instance, families may voluntarily request a reassessment of family fees if they are currently paying a full-time fee, but no longer need full-time care and, therefore, wish to reassess the family fee in order to pay a part-time fee. Family fees will not be adjusted for absences in instances in which a family is certified for full-time care, and intended, at the time of paying the fee, to use in-person services, but does not attend for all of their certified hours in any given month. See the directive in MBs 17-14 and 20-13.

As contractors certify or recertify families during this time, they must continue to calculate the appropriate family fee and indicate such fee on the NOA as typically done. The NOA shall indicate the family fee assessed, as well as indicate if there is any waiver to the family fee as set forth below.

For direct service contractors, if a family will not receive in-person services for the month due to a program closure due to COVID-19, limited in-person space, or the family is not attending care because of COVID-19, the family fee assessed for that month will be waived. Written documentation should include the effective date(s) of when the family did not receive in-person services and indicate the action taken to refund family fees or credit for future services. When the family returns to or begins in-person care, the assessed family fee would begin the first day the family indicates they will return to in-person services and will be calculated as specified in MB 20-13.

AP Contractors should require AP Providers to report the dates of closure due to COVID-19. AP Contractors should require AP Providers to clearly indicate dates of closure or days in which the family is not attending care because of COVID-19 on the attendance record and/or invoice. Written documentation should include the effective date(s) of when the family did not receive in-person services and indicate the action taken to refund family fees or credit for future services. When the family returns to or begins in-person care, the assessed family fee would begin the first day the family indicates they will return to in-person services and will be calculated as specified in MB 20-13.

In instances where a direct service contractor or provider must close unexpectedly in response to a local or public health order or guidance, including a positive COVID-19 case of an employee or provider, the family should receive a refund or credit for their family fee as specified below:

1. When the family paid a full-time or part-time fee as specified on their NOA and the provider was closed for the entire month due to a written state or local public health order or guidance, the family fees paid for the month of closure should be refunded or credited.
2. When the family paid a full-time fee at the beginning of the month as specified on their NOA, but the provider was unexpectedly closed due to a written state or local public health order or guidance, the family should be refunded or credited the difference between the full-time fee and the part-time fee if the hours of in-person service due to the closure were less than 130 hours.

If part-time fees were paid at the beginning of the month and the direct service contractor or provider was closed unexpectedly, as long as some in-person care was provided, the part-time fees would still be applicable.

As a result, contractors will need to determine on a monthly basis whether any credit or refund is necessary to families based on the amount of in-person services received when the contractor or provider has closed for some period of time. If a refund or credit is necessary, the refund or credit should be applied to the month following the determination of the refund or credit.

Contractor Reporting and Reimbursement

The Child Development and Nutrition Fiscal Services (CDNFS) attendance and fiscal reports have been revised to allow CDE to collect information on the amount of family fees waived. All contractors will be required to report the amount of family fees collected and the amount of family fees that were assessed but waived, under the circumstances provided above, beginning with the September 2020, report period, due on October 20, 2020. A new line has been added to the CDNFS Fiscal Reports entitled, Waived Family Fees for Certified Children. For FY 2020–21, all contractors must report the amount of family fees that were assessed, but waived, on this new line. Meaning, the amount of family fees reported on the line “Waived Family Fees for Certified Children” should represent the amount of fees that would have been collected from families if family fees had not been waived. Reporting fees in this way will ensure the CDE is reimbursing contractors accurately.

SB 820 provides additional funds to cover family fees for July and August. After SB 820 is signed by the Governor, contractors will receive an augmentation to their contract to cover the family fees waived in July and August 2020.

Reimbursement for family fee waivers beyond August 2020, for families receiving ELC distance learning or sheltering in place is contingent on receiving additional federal funds. At this time, no additional federal funds have been provided. Per SB 820, direct service contractors, AP Providers, and Family Child Care Home Education Network providers shall absorb the cost of the family fee waivers. Once SB 820 is signed, and assuming no federal funds are forthcoming, absorption of the family fee waivers for September 2020 through June 2021, will be implemented as follows:

• Direct service contractors will not receive reimbursement through their contract to cover the cost of the family fee waiver, and therefore must consider the cost of waiving family fees when estimating revenue and expenditures to ensure expenditures do not exceed the total contract amount.
• AP contractors who collect family fees directly will not receive reimbursement through their contract to cover the cost of the family fee waiver and therefore will adjust the amount reimbursed to the provider by the amount of family fees that would have been collected if fees were not waived. For example, if a provider typically is reimbursed $700 and the contractor collects $50 in family fees directly from the family, the contractor normally reimburses the provider $700. However, the reimbursement to the provider will now be $650 for the months of September 2020 through June 2021.
• AP Providers that typically collect the family fee will receive reimbursement from their AP contractor as usual, but will not collect the fee from the family. For example, if a provider typically collects $30 in family fees directly from the family and is reimbursed $600 from the AP contractor, the provider’s total income is $630. For the months of September 2020 through June 2021, the reimbursement to the provider will continue to be $600 from the AP contractor, but the provider will no longer collect $30 from the family.

Per SB 820, if additional federal funds are made available, up to $30 million will be allocated to reimburse childcare providers for family fees waived for families enrolled, but not receiving in-person care, from September 2020 and June 2021.

The ELCD will release an MB once SB 820 is signed by the Governor to include the clarification and directives found in this email and provide additional direction as necessary. Until that MB is released, the guidance in this message should be utilized when collecting family fees and making administrative decisions regarding families that owe fees.

Please visit the ELCD Frequently Asked Questions (FAQs) web page for the latest updates.

If you have questions regarding the information in this email, please contact your assigned Program Quality Implementation Office Regional Consultant on the ELCD Consultants Regional Assignments web page.