Child Care Benefits Models Pros And Cons: In The Era of the CHIPS and Science Acts

January 19, 2024

With the news of the Chips and Science Act, understanding various employer childcare benefit models becomes crucial. Explore the pros and cons of on-site care, cash assistance, and provider sponsorship to adapt to this evolving landscape.

On-Site Care: Operated by the Employer


  • High-quality care, well-paid staff, programs reflecting worker needs.
  • Potential Lower Cost: Employer ownership may allow for lower care costs to employees.
  • Tax Credits: Eligibility for certain tax credits.
  • Community Impact: May offer slots to community families, supporting economic development.


  • Planning and Investment: Requires advance planning and significant investment.
  • Space Requirements: Involves new building space or repurposing existing space.
  • Time Constraints: Estimated one and a half years to launch a new on-site program.
  • Operational Hurdles: Requires licensure, insurance, and liability protections.
  • Demand Viability: Depends on ensuring sufficient demand for the facility.
  • Limited Flexibility: Families may prefer different care characteristics or locations.

Off-Site Care: Cash Assistance (e.g., vouchers/subsidies)


  • Low employer overhead, maximal flexibility for employees in choosing care.
  • Vouchers: Provide flexibility in selecting care facilities close to home.
  • Wide Range: Can compensate for various care settings.
  • Child Care Navigation: Employers may offer navigation services to help employees identify opportunities.


  • Affordability Focus: Vouchers may only address affordability without additional services.
  • Local Price Impact: May drive up local prices, especially in areas of limited capacity.
  • Limited Attractiveness: May be less attractive as a standalone offering compared to capacity-expanding options.

Off-Site Care: Provider Sponsorship & Capacity Building

Sponsorship Forms:

  • Lump sum donation or upfront payment for slots at existing centers.
  • Local Care Supply: Directly increases the supply of local care, reducing upward price pressures.
  • Community Partnerships: Attracts partners and stakeholders, leveraging benefits for the community.
  • Capital Attraction: Employers may attract additional capital for child care initiatives.
  • No Facility Overhead: Alters or expands caregiver services without starting a facility.


  • Strategic Collaboration: Requires strategic collaboration with state and local communities.
  • Potential Disruptions: Avoids unintended disruptions but requires careful planning.
  • Extended Hours: Provides an opportunity for extended hours care without facility overhead.
  • Payment Rate Determination: Requires collaboration to determine the appropriate payment rate.

Wonderschool's Solution:

Wonderschool's New Home-Based Child Care Solution serves as a transformative addition, offsetting the cons associated with off-site care. By recruiting, training, and mentoring providers to start quality nearby programs out of their own homes, Wonderschool ensures both affordability and high-quality care, enhancing the overall well-being of children in the community.

Key Benefits:
  • Strategic Collaboration: Wonderschool collaborates strategically with states and local communities.
  • Payment Analysis: Significant payment analysis to ensure fair compensation.
  • Market Analysis: In-depth market analysis for effective program implementation.

Interested in developing a robust child care benefits model but don't know where to start? Contact our team today.

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