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Creates a three-year federal pilot that gives competitive grants to states to run employer-employee-government cost-sharing programs for eligible child care costs. States apply through their child-care lead agencies; approved programs must split child care charges among parents, participating employers, and the state, verify employment and income, pay providers directly, and track health/safety compliance. The federal government authorizes $250 million per year for the pilot (three years), reimburses states quarterly at the state’s FMAP rate for program payments (with administrative limits and a per-state cap), requires an evaluation and report to Congress, and allows unused grant funds to move to Preschool Development Grants the following year.
The bill pilots employer-state-parent cost-sharing to make licensed child care more affordable and stabilize payments for providers in a limited three-year program, but it requires new federal spending, may leave many families unserved due to funding caps, and could impose payroll deductions and administrative burdens.
Parents and families with incomes between the State threshold and 300% of that threshold would pay less out-of-pocket for licensed child care because costs are shared among employers, states, and parents in the 3-year pilot.
State governments would gain dedicated funding (up to $20M per State, subject to availability) plus quarterly FMAP-based reimbursements, increasing capacity to expand child care access during the pilot.
Child care providers would receive greater payment flexibility and timely payments because lead agencies must offer multiple payment schedules and allow provider choice of payment timing.
Many eligible families may remain unserved because the program’s limited federal funding and the per-State $20M cap could restrict reach and produce unequal access across states.
Taxpayers fund $250 million per year for three years for the pilot, raising federal spending with uncertain long-term savings or feasibility to scale nationally.
Parents could see reduced take-home pay because employers may collect an employer share via payroll withholding up to the program’s specified percentage.
Introduced November 25, 2025 by Hillary Scholten · Last progress November 25, 2025