United Way feasibility study says employer cost‑sharing for childcare is feasible; recommends a cohort pilot

United Way told the ACE Fund board that an employer cost‑sharing model for childcare appears feasible in Anchorage and recommended a carefully designed pilot to test implementation.

"This project is a great example that we play in a community where we intersect with government, nonprofits, businesses, and the community at large to convene the right people around complex problems," Eric Felgley, CEO (introduced during the presentation), told the board as he opened United Way’s briefing on the feasibility study.

United Way’s study used interviews with other states, a quantitative employer survey and focus groups. Kevin (United Way project lead) said the team surveyed 84 employers and convened 18 focus‑group participants who were typically CEOs or HR decision‑makers. "There was... 67% at the end [who] were at least somewhat likely to participate or enroll in a cost‑sharing program in Anchorage," Kevin said.

Why it matters: employer participation is essential for a cost‑sharing model to function. Presenters said employer interest appears strong enough to justify a small, multiyear pilot, but they cautioned that administrative design, outreach and alignment with federal/state assistance programs will determine success.

Key findings and recommendations

- Model options: United Way reviewed state examples (Michigan and Kentucky) and found different payment and eligibility structures. Michigan used a roughly equal three‑way split of costs across public funds, employers and families; Kentucky allowed employers to set contributions and state matching varied by income.

- Employer interest: surveys and roundtables showed employers are interested but worry about availability of childcare slots, fairness among employees, and administrative burden.

- Recommended pilot design: establish a long‑term cohort (not a one‑ or two‑year pilot), use a "choose what you pay" approach (flexibility for employers), prefer payroll deduction for collection efficiency, avoid household‑income restrictions to reduce privacy/administrative hurdles, and create an independent third‑party administrator to handle payments and reporting.

- Outreach and administration: the study recommended hiring an outreach specialist to enroll employers individually and a third‑party administrator to relieve employers of contracting and payroll complexity.

Policy and implementation questions

Presenters flagged several policy questions that remain open: how state tax credits and evolving federal guidance (HR 1) will affect employer incentives; whether public funds used in matching would unlock additional federal dollars; and how to structure evaluation to measure retention, participation and return on investment. Kevin said policy details and cost estimates will be part of the implementation plan the team is drafting.

Board reaction and next steps

Board members asked about scale and cost. "Is it something you could do on a small scale of $1,000,000?" one member asked; Kevin said the team is working to model implementation costs and noted that other states both under‑ and over‑funded public contributions. The United Way team said it will provide a written report with deeper analysis and an implementation plan in the coming weeks.

The study recommended that ACE Fund consider partnering on a cohort pilot and noted the importance of measuring employer ROI, workforce retention and whether the program increases access without worsening fairness concerns among employees.