As states and municipalities continue to grapple with a dearth of high-quality, affordable child care options (and the devastating economic impact that comes with it), some have turned to new and innovative approaches in an effort to address the crisis. Tax credits, subsidy and scholarship programs, workforce development initiatives, and accessible loans for child care center owners are just some of the levers in play throughout the country.

But one approach has stood out for how quickly it has expanded from a small pilot in one midwestern state to one of the hottest trends in early care and education. In this article, we’ll explore the rise of the Tri-Share funding model. What is it, where and how is it being implemented, and what factors need to be considered when standing up your own program?

Background

Tri-Share is a cost-sharing model in which employees, employers, and a third party (typically state or municipal government) split the cost of child care, often equally between the three parties. The intended outcome of the model is to strengthen the business community by freeing up more families to enter and remain in the workforce, bolster the regional/state economy by increasing the talent pool and economic mobility of families, and support child care providers by increasing demand and providing a reliable, consistent income stream.

Tri-Share got its start in Michigan in 2021 on the heels of 136,000 women leaving the state’s workforce during the pandemic. The idea was that employers, many of whom were feeling the pain of workforce shortages due to unaffordable or inaccessible child care, would play an active role in reducing costs by sharing the burden equally with their employers and the state. It started small, with an initial $1.1 million grant to support counties in three regions of the state. By October of 2023, nearly 500 children were enrolled in the program—a relatively small number in itself, but an indication that momentum was building. It now covers the majority of the state, and was growing in both family and employer participation by 10% month-over-month by early 2024.

Concurrently with Michigan’s efforts, Kentucky’s House Bill 499 established the Employee Child Care Assistance Partnership (ECCAP) Program in early 2022. Despite several key differences in the way the program would be implemented (see below), the crux of it was the same—employers would directly invest in child care for their employees alongside state funding to further defray the costs. Though “ECCAP” doesn’t quite have the marketing-friendly ring of “Tri-Share,” the goals and outcomes were largely the same.

In the three years since, at least nine other states have proposed legislation, launched pilots, or otherwise implemented Tri-Share in some capacity. Hardly a month goes by without the introduction of another bill to expand it further. Things are moving fast.

That said, the program has scaled more slowly than anticipated in many of the places where it has been implemented. We’ve seen some encouraging signs, but it’s fair to say we still don’t have a definitive answer as to whether Tri-Share can have a sustainable, positive impact on large ECE systems.

There are lingering concerns as to whether the holistic strategic planning, funding, and infrastructure necessary to successfully integrate Tri-Share into existing systems is being left by the wayside in favor of ambitious timelines. States and communities have also struggled to get employer buy-in for a number of reasons. Tri-Share is clearly not a substitute for federal investment, but it may end up being a strong supplement to existing programs once some of the early kinks are worked out.

How does it work?

The logistics of Tri-Share have been relatively consistent, with only minor regional differences. Typically the initiative starts in the state legislature, with an initial pool of seed money to fund the implementation. In some cases, including Virginia, Missouri, and Indiana, municipalities and regional organizations have attempted to spin up pilots outside of state legislation and funding.

In general, eight fundamental ingredients are required to launch a successful Tri-Share program:

• Funding to support the state/org contribution, administration, marketing, and other aspects of the program
• Clear eligibility requirements, including income ranges, employment status, and residency
• A designated agency or organization to administer the program
• A strong marketing plan to raise awareness of the program
• Employers willing to participate in the program
• Adequate supply of child care providers willing to participate in the program
• Technology and data infrastructure to support enrollment, payments, and reporting

Funding

Michigan started with $1.1 million in pilot funding, but has steadily increased that amount to support program expansion, up to $3.4 million in the ‘23-’24 budget, with philanthropic investments adding to the available pool of funds. Kentucky launched with $15 million; North Carolina started with $900k for their pilot, which just recently expanded availability to the entire state; New York’s 2023 pilot came with $4.8 million in state funding. In general, most states have estimated matching costs ranging from $3,000-$5,000 per child per year.

One could make the argument that a large initial pool of funding with no expiration is a good way to instill confidence in the stability of the program, rather than starting small and relying on future budget renewals that may be subject to shifting political headwinds. Employers are more likely to commit if the program’s staying power is not in doubt.

Eligibility

Tri-Share is designed to support those who do not qualify for other state child care subsidies, which typically only reach families in the lowest income brackets. The model fills a significant need for those that make too much to be eligible for traditional assistance programs but not enough to be able to afford the rising cost of care, which now averages nearly $12,000 per child.

Michigan, Ohio, and New York settled on gross household income thresholds between 200% and 325% of the federal poverty level for their Tri-Share programs. North Carolina opted for 185%-300%. Kentucky is the one outlier, using a sliding scale in which families are eligible starting at 86% of the state’s median income, but the amount they receive decreases as income increases.

Tri-Share recipients must also be employed with a participating employer to qualify. In local or regional implementations, participants often must live within the county/city/region as well. This was one of the biggest obstacles for Noble County, IN, which stipulated that funding be used only for county residents. Program leaders are currently working to expand support to a larger region to accommodate more commuting employees.

Administration

One of the most easily overlooked aspects of a Tri-Share rollout is the administrative burden that comes with managing a program of this scope and complexity. The administrating agency or organization is responsible for:

• Providing support and technical assistance for all stakeholders
• Verifying eligibility for employee participants
• Enrolling and onboarding employers
• Managing employer preferences, such as how much money they want to allocate, how many slots they want to sponsor, and how they are going to deduct participating employee contributions
• Enrolling and onboarding providers
• Managing and maintaining the program funding pool
• Invoicing and collecting employer and employee contributions from employers at specified intervals
• Collecting accurate state/org contributions from the relevant funding pool
• Paying providers in a timely manner
• Tracking payment history, monitoring for fraud, and reconciling payments as needed
• Removing participants from the program when their employment or child care enrollment status changes

There is no clear consensus on what the best administrative approach looks like. Kentucky is handling ECCAP administration in-house through their Cabinet for Health and Family Services. Michigan started off with several Regional Facilitator Hubs, but ended up consolidating most administration under one (United Way of Northwest Michigan) after a competitive RFP process at the end of 2023. New York is contracting with three regional hubs. North Carolina outsources their administration to a 3rd-party HR and benefits administration company.

The cost for Tri-Share administration appears to be around 9% of total funding allocation. New York wrote the 9% cap into its law and is accounting for the cost in its funding allocations—their 2025 RFP for regional facilitator hubs allows a max of 15% for administrative and personnel expenses combined. North Carolina is passing the cost on to employees and employers by tacking on 9% to their contributions. I asked MiLEAP’s media team for information on administrative costs in Michigan, but did not hear back from them before this article was published.

There is, importantly, still an outstanding question as to whether the full expense of administering, marketing, and supporting the program is being properly accounted for. CCR&Rs have been heavily involved in both administering and marketing many of the early Tri-Share implementations, but they’ve often been asked to do so with little-to-no additional resourcing on top of their many other responsibilities (Read: The CCR&R Landscape Under the New CCDF State Plans). It stands to reason that if more money were to be allocated to getting the word out and effectively managing the program, we would likely see an increase in adoption and expansion rates for many of these pilots.

Marketing

One of the most common obstacles to a successful Tri-Share implementation is a general lack of awareness of what the program is and where it’s available. Agencies need to budget and plan for an ongoing media blitz to ensure that employers understand how the program benefits them, providers are comfortable with the enrollment and payment processes, and the families who work at participating employers know it’s available to them. You will need to dedicate many hours and resources to recruiting employers, without whom the program will never get off the ground.

Local media is a reliable partner for these efforts, as are your chambers of commerce. Social media ads, flyers at community gathering places, live webinars, and pamphlets or talking points for Child Care Resource & Referral (CCR&R) agencies and other family-focused organizations are all sound best practices. If the state or county offering Tri-Share isn’t creating and leading this content, additional funds should be set aside for that purpose.

Ideally, employers will take the reins on promoting the program for its recruiting and retention benefits; this will become more likely and more impactful if administering agencies are able to equip HR teams with effective content and collateral. Michigan offers employers a Tri-Share toolkit for that purpose.

Employer Participation

The success or failure of a Tri-Share implementation ultimately hinges on how many employers are willing to sign on. The cost of approximately $300/child can seem daunting for some small businesses, but the massive value add for employees can reduce turnover, increase availability and productivity, and help participating employers stand out in a competitive job market. There is also a question of fairness to consider—employers have raised concerns about offering such a valuable benefit to parents of young children without offering proportionate perks to the rest of their staff. In that case, they may be thinking of the cost as much more than just $300 per qualifying employee. Click here to see Michigan’s Employer landing page.

When recruiting employers, it’s best to start with those that have the highest percentage of employees under the income cap (if one exists). Using 300% of the federal poverty line as a baseline, that typically comes out to $90,000 for a family of four. Agencies will also need to navigate corporate red tape—local offices for nationwide or global companies may not have the authority to approve benefits like Tri-Share. Close partnerships with the business community are crucial for the navigation of these kinds of obstacles.

One of the aspects of Tri-Share that makes it such a versatile option is the ability for employers to specify exactly how much they want to invest, and how the slots they’re offering will be allocated; e.g. first-come, first-serve, highest needs, etc... Transparency is key; administering agencies should be equipped to clearly communicate the status of employers’ allocated slots, their payment history, and which employers are enrolled at any given time to keep them invested in the program.

Child care supply

One of the big lessons learned in Kentucky’s ECCAP rollout was the necessity for alignment between child care availability and employer interest. As of 2024, the state was considering diverting some of their ECCAP funding to help build supply of family child care programs, which are especially helpful in rural areas with less center-based care options. Larger employers might also consider leveraging the federal Employer-Provided Child Care Tax Credit to defray the cost of their own in-house child care programs.

The supply issue is just one more reason why CCR&Rs should be heavily involved in Tri-Share rollouts. These agencies often have the most accurate data on child care supply and demand, and the additional variable of employer Tri-Share participation can add even more clarity to the demand side of that equation. Prospective child care providers may be more likely to open a center when they know they’ll have a steady stream of reliable income from local employers.

Technology and data infrastructure

Tri-Share isn’t the kind of thing that can be managed with spreadsheets and duct tape. Modern funding solutions call for modern infrastructure in support of a user-friendly, compliant, and reliable program. The most common technology needs for Tri-Share include:

• A public-facing, integrated solution which identifies eligibility for employees across existing funding sources (CCDF, TANF, Head Start, etc…) along with Tri-Share
• An application for families/eligible employees who wish to participate in the program, including the ability to upload supporting documentation
• An eligibility review and case management solution with which administrators can communicate with families and process applications
• Provider and employer intake forms
• A database of all participating providers, employers, and employees
• A way for employers to view and update their contribution amounts, allocation preferences, and employee status
• A way for providers to submit invoices and enter attendance/enrollment information
• Invoicing and collection of funds from employers
• Timely distribution of payments from the shared pool of funding and employer/employee contributions
• Visibility into payment history across all three payees; user-friendly reporting, analytics, and audit logs

We still haven’t seen a consensus favorite emerge among Tri-Share software support. The states that have implemented it are using a variety of systems, from homegrown to forms-based. And yes, if you can forgive just a brief moment of self-promotion, BridgeCare is uniquely positioned to support Tri-Share, given our extensive background in ECE-specific subsidy management.

What's next?

Child care is, and will continue to be, a major economic and workforce issue that can make or break entire communities. In the three years since Tri-Share’s introduction, employers throughout the country have shown a willingness to be a part of the solution through active investment on behalf of their employees. State legislatures, both red and blue, have also shown a willingness to fill the gaps left by CCDBG-funded subsidies with matching contributions. The question isn’t whether Tri-Share will continue to expand, but where it will pop up next.

As with any significant trend or innovation, there will come a time when Tri-Share’s efficacy will need to be proven by measuring its impact at scale, rather than relying on anecdotal evidence. Are participating employers attracting more qualified applicants and retaining more talent? Are more parents choosing to remain in the workforce after they have children? Are local economies benefiting from both?

The program is still so nascent and participant volume hasn’t reached the thresholds necessary to glean any reliable insights yet, but we are likely only a few years away from having a clearer picture of Tri-Share’s impact on many quantitative and qualitative metrics. What we do know is that families in Michigan have already saved over $7,000,000 in child care costs through the program; that’s a number worth celebrating.

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Do you have a question aboutTri-Share? Contact us at childcarematters@getbridgecare.com. Want to learn more about how BridgeCare can partner with you to support a Tri-Share implementation in your state or community? Talk to a specialist today.