DPSS ePolicy

To convert existing policy to new writing style only – No concept changes

Regional Market Rate (RMR) ceilings are the maximum amount that child care providers can be reimbursed from the State for subsidized child care. RMR changes apply to:

• CalWORKs Stage 1 Child Care (S1CC) Program administered by the California Department of Social Services (CDSS); and 
• CalWORKs Stage 2, CalWORKs Stage 3, and other voucher-based child care programs administered by the California Department of Education (CDE).

Reimbursements are determined by reviewing the number of hours the participant is working and/or participating in a County-approved Welfare-to-Work (WtW) activity, plus reasonable commute hours.  Since parents are allowed commute time (both ways) between their respective activities and the child care provider, the hours of care will differ from the hours the parent is actually on the job and/or participating in approved WtW activities.  Child care cannot be approved for commute time from the parent’s home to the location where child care will take place.

The information below reflects the RMR ceilings to be used for licensed and license-exempt providers for the following periods: 

For the period of July 1, 2016 through December 31, 2016 the applicable RMR ceiling was:

104.5 percent of the 85th percentile of the 2009 RMR survey, reduced by 10.11 percent for licensed child care providers; and licensed-exempt child care providers shall not exceed 65 percent of the RMR ceiling established for child care homes.

For the period of January 1, 2017 through December 31, 2017 Licensed Child Care providers shall be established at the greater of either of the following:

1. The 75th percentile of the 2014 RMR survey;or
2. The RMR ceiling as it existed as of December 31, 2016

Accordingly, Los Angeles County implemented the reinbursement ceilings at 75th percentile of the 2014 RMR survey as all the new ceilings are higher than or equal to the 2009 RMR ceilings.

Lisenced-exempt child care providers shall not exceed 70 percent of the RMR established for family child care homes. These ceilings will remain in effect until rescinded or amended.

For the period of January 1, 2018 through December 31, 2018  Licensed Child Care providers shall be established at the greater of either of the following:

1. The 75th percentile of the 2016 RMR survey;or
2. The RMR ceiling as it existed as of December 31, 2017.

Accordingly, Los Angeles County implemented the reinbursement ceilings at 75th percentile of the 2016 RMR survey as all the new ceilings are higher than or equal to the 2014 RMR ceilings.

Lisenced-exempt child care providers shall not exceed 70 percent of the RMR established for family child care homes. These ceilings will remain in effect until rescinded or amended. 

For the period of January 1, 2019 until rescinded or amended:

Licensed Child Care providers shall be established at the greater of either of the following:

1. The 75th percentile of the 2016 RMR survey;or
2. The RMR ceiling as it existed as of December 31, 2017.

Accordingly, Los Angeles County implemented the reinbursement ceilings at 75th percentile of the 2016 RMR survey.

Lisenced-exempt child care providers shall not exceed 70 percent of the RMR established for family child care homes. 

Applicable RMR Ceilings 

The following RMR ceilings are to be used for the following providers:

Child Care Center Rate ceilings shall be used for providers who:

1. Operate licensed centers.
2. Are public or private schools operating extended day programs.
3. Operate centers on tribal or federal lands.
4. Operate recreation programs exempt from licensure pursuant to the Health and Safety code and meet the requirments for participation in the Alternative Payment Program that include all of the following:
   • Using sign-in/sign-out documents to record attendance;
   • Providing adult supervision for all children during all hours of operation; and
   • Ensuring that all employees who have contact with children have completed criminal history background examinations.

If these center-based requirements are not met, exempt centers will be capped at the RMR ceiling for license-exempt providers. The same rules apply to both public and private recreation programs exempt from licensure.

After school on-site child care programs operated by school employees are treated as license-exempt but reimbursed for child care at actual cost up to the maximum licensed child care center RMR ceiling, instead of the license-exempt RMR ceiling.

Family child care home reimbursement rate ceilings shall be used for providers who operate licensed family child care homes or a child care business in a home setting on tribal or federal land.

The license-exempt RMR ceiling is used for child care providers who provide care either in-home or outside the child’s home. If no ceiling is provided for the applicable reimbursement rate category, the Resource & Referral/Alternative Payment Program (R&R/APP) agency shall determine a ceiling by multiplying the RMR hourly ceiling by the hours of need for child care.

NOTE: Current Regional Market Rate ceilings can be viewed at: Reimbursement Ceilings for Subsidized Child Care

Children Six-Years-Old and Under Enrolled in Kindergarten

The applicable age category to determine the appropriate RMR ceiling for children enrolled in kindergarten who are under age six, but who require subsidized child care outside of their regular school hours, are as follows:

Child Care Centers shall utilize:

1. The 6+ age category when the child is considered school-age for licensing purposes.
2. The 2-5 age category when the child is under six years of age.

Family Child Care Home and In-Home/Out-of-Home Exempt providers shall utilize:   

1. The 6+ age category when the child is six years of age or older.   
2. The 2-5 age category when the child is under six years of age.

Time Based Reinbursement Rates

Hourly Care shall only be used when: 

1. Child care is needed for less than 30 hours per week and less than 6 hours on any given day within the week.   
2. An unscheduled, but documented need (such as, the parent’s need to work overtime) of less than 6 hours per occurrence that exceeds the child’s need for child care    
3. The portion of needed child care that exceeds 52.5 hours per week and is not included in the provider’s stated full-time weekly or monthly rate. This is only applicable if the family uses no more than one provider to meet the entire need for child care. Additional payment made at the hourly rate for this purpose cannot exceed the provider’s full-time weekly or full-time monthly rate. (Refer to the "Example" section for example scenarios).
4. Child care is provided by a license-exempt in-home or out-of-home provider who does not supply the R&R/APP agency with an hourly rate. If necessary, the R&R/APP agency will derive an hourly rate by dividing the provider’s rate by the corresponding RMR ceiling to yield a percentage and multiplying this percentage by the hourly ceiling.

Note:

As the calculations for license-exempt hourly rates do not appear to result in an exact sum that is equal to 70 percent of the family child care home ceilings, CDSS clarified that license-exempt hourly rates are not governed by the general rule that applies to the other rate categories including daily, weekly, and monthly ceilings.  Instead, the part-time hourly rates are calculated by taking the calculated TrustLine/relative full-time weekly ceiling and dividing that number by 45. 

This methodology was established under the authority of the 2003-2004 Budget Act, Item 6110-196-0001, Provision 7(a) and was approved by the Department of Finance, the Legislative Analyst’s Office, the Department of Education and the Department of Social Services, and implemented with the 2005 survey.

Daily Care shall only be used when:

1. A family has an unscheduled, but documented need for six hours or more per occurrence, such as the parent’s need to work on a regularly scheduled day off that exceeds the certified need for child care.
2. A family has a documented need of six hours or more per day and the number of days does not exceed 14 days per month.

Reimbursements to a provider based on the daily rate over one month’s time shall not exceed the provider’s equivalent full-time monthly rate or applicable monthly ceiling.

Part-time Weekly Care shall only be used when child care is needed for fewer than 30 hours per week.

Full Time Weelky Care care shall only be used when child care is needed for 30 hours or more per week.

Part-time Monthly Care shall only be used when:

1. Child care is needed less than 30 hours per week and the need occurs in every week of the month; or
2. The need for child care averages less than 30 hours per week when calculated by dividing the total number of hours of child care needed in the month by 4.33, and the need occurs in every week of the month.

Full-time Monthly Care shall only be used when:  

1. Child care is needed for 30 hours or more per week and that need occurs in every week of the month; or 
2. The need for child care averages 30 hours or more per week when calculated by dividing the total number of hours of need in the month by 4.33, and that need occurs in every week of the month.

Rate Adjustments for Evening and/or Weekend Care for Licensed Providers

When licensed child care services are provided from 6:00 p.m. to 6:00 a.m., on any day of the week or from 6:00 a.m. Saturday to 6:00 a.m. Monday, the R&R/APP agency shall multiply the RMR ceiling for the applicable rate category (except the hourly rate) by the appropriate adjustment factor. 

The adjustment factors for evening/weekend care do not apply to license-exempt in-home or out-of-home providers.

The appropriate ceiling adjustment factors are:

1. 1.25 when 50 percent or more of the need for child care occurs during this period; or
2. 1.125 when at least ten percent, but less than 50 percent of the need for child care occurs during this period. 

Reimbursement to the provider shall be the lesser of the amount the provider charges unsubsidized, private-pay families for the same hours of child care, or the maximum subsidy amount as determined in the adjustment factors above.

Both the evening/weekend and exceptional needs/severely disabled children’s adjustments may be applied concurrently for the care of the same child(ren), as appropriate. 

Rate Adjustments for Exceptional Needs or Severely Disabled Children

Ongoing Finacial Impact

The Americans with Disabilities Act (ADA) makes it unlawful for child care providers to set higher rates for exceptional needs or severely disabled children.  These adjustment rates may only be applied when it is documented that additional services and/or accommodations for that particular child(ren) are being provided with an ongoing financial impact to the child care provider.  

Individualized Education Plan or Individualized Family Service Plan 

An exceptional needs child and a severely disabled child must be identified with an Individualized Education Plan (IEP) or Individualized Family Service Plan (IFSP). 
A physician’s note is not acceptable documentation to permit rate adjustments that result in a higher ceiling.

R&R/APP agencies shall notify parents of children identified as exceptional needs and parents of children identified as severely disabled, who participate in IEPs or IFSPs that they will need to provide a copy of updated plan(s) for review on an annual basis, to determine if their child care needs have changed.

Rate Adjustment Factors to be Applied

When child care services are provided to exceptional needs or severely disabled children, and a provider demonstrates an ongoing financial burden as a result of caring for these children, an adjustment factor may be applied to the provider’s rate or standard ceiling, whichever is lower.

These adjustment factors may be applied to both licensed and license-exempt provider rates.  R&R/APP agencies may concurrently apply both the evening/weekend and exceptional needs/severely disabled children’s adjustments for the care of the same child(ren), as appropriate.

A special needs or exceptional needs adjustment may be applied when applicable by multiplying the provider’s rate by one of the following:

1. 1.2 Adjustment Factor - when the child has exceptional needs, the provider’s rate may be multiplied by 1.2 to determine the new, adjusted ceiling.
2. 1.5 Adjustment Factor - when the child is severely disabled, the provider’s rate may be multiplied by 1.5 to determine the new, adjusted ceiling.

The CDE is responsible for the contract awarded on a competitive basis to conduct the biennial RMR survey of child care providers.  The survey is based on a methodology of zip code groupings that have similar socio-economic characteristics (e.g., housing costs, population density, and employment rates).  The survey results are utilized to create the RMR ceilings based on an aggregate of the survey data for each county.  The RMR ceilings issued by CDE are equally applicable to the CalWORKs S1CC Program administered by CDSS.

The Fiscal Year 2006-07 Budget Trailer Bill, Assembly Bill (AB) 1808, required that the RMR ceilings be based on a county aggregate of the survey data.  As such, Los Angeles County implemented reimbursement rates according to the type of care, age of the child(ren), and time base (i.e., hourly, daily, weekly, or monthly).

The Budget Act of 2014, Senate Bill (SB) 852, maintained the RMR ceilings at the 85th percentile of the 2005 RMR survey and the license-exempt child care provider ceilings at 60 percent of the family child care home ceilings through December 31, 2014.

On January 1, 2015, AB 1476 and SB 876 required California to implement reimbursement ceilings at the 85th percentile of the 2009 RMR survey, reduced by 10.11 percent.  If a new ceiling was less than the 2005 RMR ceiling, then the 2005 ceiling was to remain in effect.  The license-exempt child care provider ceilings continued to be 60 percent of the family child care home ceilings.  Accordingly, Los Angeles County implemented reimbursement ceilings at the 85th percentile of the 2009 RMR survey, reduced by 10.11 percent as all of the new ceilings were higher than or equal to the 2005 RMR ceilings. 

On October 1, 2015, SB 97 and AB 104 provided a 4.5 percent increase to the RMR ceilings by applying 104.5 percent to the 85th percentile of the 2009 RMR survey, reduced by 10.11 percent.  Additionally, SB 97 and AB 104 increased reimbursement ceilings for license-exempt child care providers to 65 percent of the family child care home ceilings.

Effective January 1, 2017 through June 30, 2018, SB 828, Chapter 29, Statutes of 2016, established the RMR ceiling for licensed providers at the greater of either of the following: 

1. The 75th percentile of the 2014 RMR survey for that county; or
2. The RMR ceiling for that county as it existed as of December 31, 2016.

However, AB 99, Chapter 15, Statutes of 2017, revised the RMR ceiling period to reflect a new period end date of December 31, 2017 and maintained the RMR ceilings as established in SB 828.  Effective January 1, 2018 through December 31, 2018, AB 99 revised the RMR ceiling for licensed providers as follows: 

1. At the greater of the 75th percentile of the 2016 RMR survey for that region; or
2. The RMR rate ceiling as it existed in that region on December 31, 2017.

Reimbursement to license-exempt child care providers must not to exceed 70 percent of the family child care home ceilings.

Additionally, AB 99 established that as of January 1, 2019, the RMR ceiling shall be established at the 75th percentile of the 2016 RMR survey for that region.

AB 1808, Chapter 32, Statutes of 2018, instead requires that the RMR ceilings continue to be established indefinitely at the 75th percentile of the 2016 RMR survey for that region or at the RMR ceiling that existed in that region on December 31, 2017, whichever is greater.

Child Care Center

Located usually in a commercial building where non-medical care and supervision are provided from infant to school-age children in a group setting for periods of less than 24 hours. 

Commute Hours

The time it takes for the participant to travel from the child care provider to the activity or activities for which child care is being provided and from there back to the child care provider. Child care reimbursement cannot be approved for parents who commute between the child care provider and their home.

Exceptional Needs Children

Exceptional Needs Children are children who may be developmentally disabled, hard of hearing, deaf, speech impaired, visually handicapped, seriously emotionally disturbed, orthopedically impaired, other health impaired, deaf-blind, multi-disabled or children with specific learning disabilities who either have an active IEP or IFSP and are receiving special education/early intervention services.

Family Child Care Home

Reflects a home-like environment where non-medical care and supervision are provided in the provider's own home for periods of less than 24 hours.

Full-time Plus

The amount of time that exceeds 10.5 hours per day or 52.5 hours per week.

License-Exempt

A child care provider who is not required to obtain a child care license, as specified in the California Code of Regulations, Title 22, Division 12, Section 101158.

Licensed Provider

An individual or organization that has obtained a child care license, as specified in the California Code of Regulations, Title 22, Division 12, Section 101156.

Regional Market Rate Ceilings

The child care rate ceilings that the State issues periodically, which provide the maximum amount that the State of California will reimburse for subsidized child care services on behalf of CalWORKs participants.

Severely Disabled Children

Severely Disabled Children are children with either an active IEP or IFSP and require instruction and training in programs serving pupils with profound disabilities, such as autism, blindness, deafness, severe orthopedic impairments, serious emotional disturbances or severe developmental disabilities.

Trustline Registry

California’s registry of license-exempt child care providers who have passed criminal background screening and clearance process through a fingerprint check of records from the California Department of Justice’s California Criminal History System; the Child Abuse Central Index of California and FBI Criminal History System.

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