Cost-Sharing for Child Care: Looking at the Tri-Share Model
By Elijah Rassoul*, Alyssa Fortner, and Shira Small
The historic underfunding of child care has led to large-scale accessibility issues for families with young children, particularly those with low incomes. The Child Care Development Block Grant (CCDBG) is the primary source of federal funding to states for child care subsidies, but the program has never been funded at the level necessary to help all families who need financial assistance. This lack of both federal funding and support for building a system that meets the needs of all families has meant that states have had to be creative and innovative in providing care to meet the needs of more families. One approach is a cost-sharing model most commonly known as Tri-Share.
This specific model involves a state government, an employer, and an employee each paying for a share of the employee’s cost of child care. First developed and implemented in Michigan, Tri-Share was rolled out in 2021 to support workers, particularly women, who wanted to re-enter or remain in the workforce by lowering their child care costs by 66 percent.
To participate, an employer signs on to the program through a facilitator hub, typically a community non-profit, which handles the administrative aspect of Tri-Share. The facilitator hub is responsible for billing the government and the employer for their portions, helping families find licensed providers, paying the providers, and more. To be eligible in Michigan, the employee must have a household income of 200 to 325 percent of the federal poverty level, which is $62,400 to $101,400 in 2024 dollars.
Since its implementation in Michigan, more states and counties have followed suit with their own Tri-Share programs, including in North Carolina, Kentucky, and Noble County, Indiana. Other states are considering or developing similar programs. While the basic idea is the same, each program works differently. For example, Kentucky’s Child Care Assistance Partnership Program does not have a fixed contribution, so the employer doesn’t have either a minimum or maximum contribution. In addition, all families that work for a participating employer are eligible in Kentucky, but the benefits begin to taper as the participant’s income increases.
Despite different names and structures, the goal of each program is the same: to support the workforce by cutting their child care costs. And for those who participate in these programs, this goal is often being met. In Michigan’s pilot in 2021, participants’ average monthly income was $4,843, and their average monthly child care costs were $716, or 15 percent of their income. Tri-Share cut the average monthly payment to $252, roughly 5 percent of income.
The Michigan pilot helped many families, giving policymakers and other states much to learn from:
- Tri-Share provides care for more families than would be able to access child care assistance support otherwise. Ideally, federal and state funding would be robust enough to provide quality care to all who need it, but without this level of public support, Tri-Share helps meet the need of more families than could be reached otherwise.
- The Tri-Share program supports families who are not eligible for Michigan’s child care subsidy programs but do not make enough to cover the high costs of child care, resulting in more families accessing the financial support they need.
- Tri-Share lowers out-of-pocket child care expenses for families. Because this model shares costs and doesn’t put the sole payment responsibility on the parent(s), the strain of the high cost of child care is eased for families to ensure that their children are receiving care to enable the parents to be in the workforce.
However, the pilot highlighted considerations that states should keep in mind as they explore their own cost-sharing programs to roll them out effectively and equitably:
- These programs still have income caps that limit participation for families with higher incomes who also struggle to afford care. And cost-sharing programs are not meant for those who are eligible for or receiving child care subsidies, creating barriers to access, particularly for families with low incomes who need support in providing care but can’t receive it due to the limited reach of CCDBG.
- There is no guarantee that businesses will opt into a cost-sharing program without clear incentives for participation. Few businesses in Michigan have offered the program since its inception. Tri-Share is an added expense for employers, and they may desire more evidence of workplace improvements than what currently exists before opting in.
- This model connects individuals to employers in ways that may make it hard for workers to change jobs if there is another position that is a better fit or even accept a promotion, due to the high cost of child care.
- There is an equity concern regarding the type of employers that are willing to shoulder this additional expense. If the uptake of these programs is more prominent in wealthier companies that are more likely to be able to afford the additional cost, many people who need this benefit the most could be left out.
- This cost-sharing model doesn’t support improvements in the child care system or provide greater support to the child care workforce. It does not increase provider pay, improve the quality of care, or address the limited reach of CCDBG. Ensuring access to child care requires creating a cohesive system, but state-by-state cost-sharing programs are band-aids to the larger-scale underinvestment in child care.
The oldest Tri-Share program in the country has only been in operation for three years. As such, its impact on child care access across the country, both positive and negative, is still being realized. What is clear is that this country needs a well-resourced, publicly funded child care system that is universally accessible and affordable. While states are trying their best to address the child care access and affordability crisis, programs like Tri Share are a band-aid. Rather than a fragmented system linked to employment, income, and other individual factors, we need one where child care is available and accessible for all who want it.
* Elijah Rassoul is a student at the University of Michigan and served as a Zero Hunger Intern from the Congressional Hunger Center on the Child Care and Early Education Team at CLASP this summer. The team is grateful for his important contributions.