A5952

An Act concerning health insurance coverage for child care center employees, supplementing Title 17B of the New Jersey Statutes, and making an appropriation.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares that:

a. Though the child care industry is heavily regulated, child care centers in the State primarily rely on family-paid tuition and often operate without any supplemental public assistance.

b. Child care centers set tuition rates based on what local families can afford rather than the actual cost of delivering high-quality child care.

c. Families that meet certain income requirements may receive financial assistance for child care, known commonly as child care subsidies, through the New Jersey Child Care Assistance Program.

d. Child care subsidies are historically low and only cover about 75 percent of the market rate for child care.

e. Because neither family-paid tuition nor child care subsidies cover the true cost of providing high-quality early childhood education and care, child care centers operate on razor-thin margins and are frequently unable to offer competitive wages, health insurance, or retirement plans to child care providers without significantly raising tuition or cutting other operating costs.

f. Child care centers that raise tuition to offer essential employment benefits may render child care unaffordable for most families and have difficulty accepting families that receive child care subsidies.

g. Alternatively, child care centers that cut operating costs risk compromising health and safety standards and falling out of compliance with State licensing regulations.

h. Child care in New Jersey cannot remain both heavily-regulated and primarily funded by working families at the expense of the early childhood education and care workforce.

i. Sustainable public investment is urgently needed to ensure the quality and stability of the child care industry in New Jersey.

2. a. There is established in the Department of Banking and Insurance the “Health Care for Child Care Program” for the purpose of paying for the health benefits coverage of individuals employed at child care centers in this State.

b. The Health Care for Child Care Program shall be provided through the New Jersey Individual Health Coverage Program pursuant to P.L.1992, c.161 (C.17B:27A-2 et seq.). A health benefits plan provided to an individual pursuant to this section shall include the highest level of coverage available through the gold level of the New Jersey Individual Health Coverage Program, and shall include prescription drug coverage.

c. To be eligible for a health benefits plan through the Health Care for Child Care Program, an individual shall:

(1) be currently employed at a child care center licensed pursuant to the provisions of P.L.1983, c.492 (C.30:5B-1 et seq.) or at a registered family child care home that is enrolled in or rated by Grow NJ Kids;

(2) work a minimum of 30 hours per week at a child care center or family child care home pursuant to paragraph (1) of this subsection; and

(3) have been employed at a child care center or family child care home pursuant to paragraph (1) of this subsection for a period of at least 90 days.

d. The State shall pay the health benefits plan premiums from the Healthcare for Child Care Fund established pursuant to subsection f. of this act. The State shall be responsible for the payment of all premiums in connection with the health benefits plan and neither the individual nor the individual’s employer shall be liable for the health benefits plan premium.

e. The Department of Labor and Workforce Development shall provide such information as may be necessary for the Department of Banking and Insurance to determine the eligibility of individuals for the program.

f. There is established a non-lapsing, revolving fund in the Department of Banking and Insurance to be known as the “Health Care for Child Care Fund.” This fund shall be the repository for monies received as grants in support of this act or moneys otherwise appropriated or directed to be remitted to this fund as are necessary to implement this act. The purpose of the fund shall be to pay the health benefits plan premium costs for persons eligible for coverage pursuant to this act.

g. The Department of Banking and Insurance shall, in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary to implement this act.

3. There is appropriated the sum of $10,000,000 from the General Fund to the Department of Banking and Insurance for deposit into the “Health Care for Child Care Fund” to effectuate the provisions of this act.

4. This act shall take effect on the first day of the seventh month following the date of enactment.

STATEMENT

This bill establishes the “Health Care for Child Care Program” to provide State funding for health benefits plans for employees of child care centers licensed in the State. Pursuant to the bill, any employee of a child care center licensed in the State is eligible for health benefits coverage at the gold level through the New Jersey Individual Health Coverage Program. Premiums for the health benefits plans are to be paid from the Health Care for Child Care Fund also established under the bill. The bill appropriates $10 million from the General Fund for deposit into the Health Care for Child Care Fund to effectuate the provisions of the bill.

Investing in the child care workforce is essential to the economic stability and well-being of New Jersey's families and communities. Child care centers, many of which are women or minority owned, form a critical component of our local economy and societal functioning. Though heavily regulated, child care providers often operate without any supplemental public assistance. These providers enable parents to work while supporting the early development of children. Despite the indispensable role they play, these providers, who are predominantly women of color and immigrants, are often among the lowest-paid workers in the State, with limited access to health insurance, retirement plans, and other essential employment benefits.

Underinvestment in the child care infrastructure threatens the sustainability of an industry that is vital to the State’s economic growth. Without sufficient public support, these small businesses struggle to maintain operations, directly impacting parents' ability to participate in the workforce and the availability of quality early education for children.

By increasing public investment in the child care sector, the State can stabilize the critical child care workforce, reduce economic inequality, and promote long-term prosperity. A robust child care system not only benefits children and working families, but also strengthens the broader economy, making the investment in child care a crucial step toward economic equity and sustainable growth for the State.