Overview
As Tennessee policymakers explore new ways to address the state’s workforce challenges tied to child care affordability, Kentucky’s Employee Child Care Assistance Partnership (often referred to as a “Tri-Share” model) offers a promising example. It creates a three-way cost-sharing partnership between employers, the state, and employees. The program is funded at $2 million per year statewide and is administered by the Kentucky Cabinet for Health and Family Services.
How the Kentucky Tri-Share Model Works
Eligibility & State Match: All employees are eligible regardless of income. The state match is tiered: for families at or below 100% of State Median Income (SMI), the state matches 100% of the employer’s contribution. The match phases down as income rises to 50% for families at or above 180% of SMI. This makes the program inclusive while prioritizing lower-income families.
Application & Participation: Employers apply online. Once approved, the employer pays their contribution directly to the licensed child care provider, and the state pays its match to the same provider. Contracts must be renewed annually.
Flexibility: Employers choose the contribution amount—there is no minimum. Employees can use any licensed provider in the All STARS quality rating system.
Source: Kentucky Chamber of Commerce, Employee Child Care Assistance Partnership FAQ (2024)
Kentucky Chamber of Commerce Recommended Improvements
Although Kentucky’s Employee Child Care Assistance Partnership is seen as a strong starting point, stakeholders have identified a number of ways to strengthen the program and make it more efficient. Additionally, awareness of the program among employers remains low, and the current structure within the Cabinet is not optimized for employer-facing service delivery.
Based on these findings, the Kentucky Chamber’s stakeholder collaborative reached consensus on a series of reforms designed to make the program more user-friendly, scalable, and effective for employers, providers, and families:
- Outsource administration to a third party to improve efficiency, customer service, and overall performance.
- Use incentive- and performance-based contracting to ensure accountability and results.
- Prioritize user experience for employers, providers, and employees.
- Increase flexibility for employers to use the program in diverse ways.
- Include public employers (state and local government).
- Launch a statewide awareness campaign to boost participation.
- Build a sustainable long-term model to support scalability and stability.
What Other States Are Doing
The idea behind Kentucky’s program comes from Michigan’s now well-established Tri-Share model, which launched statewide in 2021. Since then, several other states — including Tennessee’s neighbor North Carolina — have launched or are piloting versions of this shared-cost strategy to make child care more affordable and improve workforce participation.
- Michigan: Michigan launched the original Tri-Share program. Established as a pilot in 2021 and expanded statewide, it splits the cost of licensed child care evenly between the employee, employer, and the state. Open to employers of any size or sector, the model lets businesses choose how many employees will receive benefits. Employees must meet income criteria, with eligibility currently set between 200% and 400% of the federal poverty level. The program has scaled quickly: as of 2025, more than 251 employers are participating, saving families over $8.6 million in tuition since launch. Families and employers report substantial benefits—97% of participating families say the program improved their financial stability, and more than 70% of employers report improved employee retention. Tri-Share’s impact has earned it bipartisan support and national recognition as a model now being adapted by multiple other states. Source: Results for America
- North Carolina: The NC Tri-Share Child Care Program launched in 2025 as a targeted pilot led by local Smart Start partnerships. Funded through the state budget, it’s aimed at families earning 185–300% of the federal poverty level — often too high to qualify for subsidy but still struggling with affordability. The nonprofit-led regional model emphasizes community coordination and administrative efficiency. Source: Smart Start
- Indiana: Noble County has launched a local Tri-Share pilot using county funds, strengthening ties between regional employers and child care providers. The pilot is being evaluated as a potential model for other Indiana counties. Source: IN Governor’s Task Force on Child Care
- West Virginia: West Virginia has implemented a model very similar to Kentucky’s as a pilot in eight counties . Source: West VA Chamber of Commerce
- Other states including New York, Connecticut, North Dakota, and Ohio have all introduced or planned pilots modeled after Michigan’s approach, adapting eligibility and administration to their regional economies and child care systems.
While each model follows the same guiding principle — splitting costs between employers, employees, and government — states vary in how they define eligibility, manage partnerships, and structure funding. Some use employer tax incentives, others deploy hub-based intermediaries or flexible contribution formulas like Kentucky’s. Together, these pilots mark a significant wave of innovation in child care policy.
Why It Matters for Tennessee
Tennessee’s current child care affordability and workforce participation challenges mirror those that prompted Michigan, Kentucky, and North Carolina to act. With eighty percent (80%) of TN’s working parents of young children experiencing work disruption due to child care barriers, shared-cost models like Tri-Share could offer a pragmatic, locally adaptable path forward.
For employers, by participating in a Tri-Share program they can double their investment in employee child care through the state match, help employees stay in or return to the workforce, improve retention and recruitment—especially for lower- and middle-income workers—and demonstrate leadership on a critical economic development issue.
Closing Thoughts
The various Tri-Share models shows how pragmatic partnerships between employers, government, and families can make child care affordable while strengthening the state’s workforce. Kentucky’s version in particular has been studied by the state’s business community and is expected to be adapted with recommendations for improvment organized by the KY Chamber of Commerce. As more states test and refine shared-cost solutions, Tennessee has an opportunity to shape a version that draws lessons from Kentucky’s approach as well as from approaches of other states — creating a program uniquely suited to TN’s economy, employers, and families.
