The North Carolina House is pressing forward with legislation aimed at easing the childcare pipeline. Supporters say that House Bill 412 would address affordability and access issues for families while reducing operational burdens on childcare providers.
At the heart of the legislation is the proposal to decouple the state’s Quality Rating Improvement System, or QRIS, from childcare subsidy reimbursement payments. Under the current model, childcare facilities’ star ratings directly affect the reimbursement rates they qualify for.
The original bill draft called for severing the connection between the QRIS from the requirements and payments for participation in the State subsidized child care program.
Some committee members had previously expressed concerns about decoupling the QRIS from subsidies, fearing it might reduce quality incentives for providers.
If such a operation were passed into law, the new system will still offer voluntary star ratings for facilities, but these ratings would no longer determine the reimbursement amounts.
The bill requires the Department of Health and Human Services to develop a plan for the QRIS decoupling by May 1, 2026. Additionally, DHHS has been directed to conduct a market rate study to establish new reimbursement rates, pending approval from the state General Assembly.
Rep. Dean Arp, R-Union, one of the bill’s primary sponsors, emphasized the intent behind this shift during a meeting of the House Health Committee on Tuesday.
“We want a childcare system that is safe, affordable, and available,” said Arp. “By reducing unnecessary regulatory burdens, we can lower costs for providers and parents alike while increasing the workforce by streamlining credentialing processes.”
Critics voiced concerns about potential impacts on quality. “Decoupling the QRIS rating system with subsidy calculations could de-incentivize quality improvement and create inequality in access to high-quality childcare,” said Rep. Sarah Crawford, D-Wake.
Beyond the QRIS reforms, HB 412 would continue childcare stabilization grades and implement new deregulation aimed at reducing costs for providers. Notably, the bill streamlines standards for workforce qualifications and facility operations, including by addressing definitions for lead teachers, staff-child ratios, and space and equipment requirements.
One significant change would bring religious childcare facilities — which currently operate under separate requirements — into alignment with other licensed providers regarding subsidy payments and quality expectations. Proponents argue that expanding the pool of providers receiving state subsidies will ultimately increase accessible childcare options for families in need.
The bill drops during a time when the childcare industry continues to grapple with a workforce shortage, exacerbated by the COVID-19 pandemic.
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