SB 498 — AN ACT CONCERNING PENALTIES FOR TARDY PAYCHECKS FOR PERSONAL CARE ATTENDANTS AND EXPANDING PUBLIC ACCESS TO STATE PROGRAMS.

and in Section (4)(b), "tardy pay" was changed to "tardy payments to personal care attendants", for clarity.

HS Joint Favorable Subst.

-LCO sSB498 / File No.

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487 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 27 $ FY 28 $ Various State Agencies GF - Cost See Below See Below Social Services, Dept.

GF - Cost 182,000 182,000 Policy & Mgmt., Off.

GF - Cost 304,000 None Auditors GF - Cost 220,678 215,698 State Comptroller - Fringe GF - Cost 123,226 123,226 Benefits1 Department of Developmental GF - Potential See Below See Below Services Cost Social Services, Dept.

GF - Potential See Below See Below Cost Policy & Mgmt., Off.

GF - Potential See Below See Below Cost Resources of the General Fund GF - Revenue 58,000 58,000 Gain Note:

GF=General Fund Municipal Impact:

None Explanation Section 1 results in a cost to the Department of Social Services (DSS) of approximately $182,000 in both FY 27 and FY 28 and a related federal grantsrevenue gainof$58,000inbothyears.State costsinclude$100,000 for fiscal intermediary (FI) contract increases, as well as funding for one full-time Health Program Associate with an approximate annual salary of $82,000 (with corresponding fringe of $34,000) to manage the collection and posting of FI quarterly reports starting from April 1,2024.

1The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller.

The estimated active employee fringe benefit cost associated with most personnel changes is 41.82% of payroll in FY 27.

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487 To the extent the Department of Developmental Services (DDS) assists DSS with the collection of report data, the department may incur staffing and/or resource costs.

Section 2 requires the Office of Policy and Management (OPM) to (1) conduct a cost-benefit analysisontransferring fiscalintermediary duties for these programs to the state and allowing certain PCAs to access a state subsidized health insurance program, and (2) submit a report by October 1, 2026.

This results in a one-time cost of $304,000 to OPM in FY for a consultant to conduct the analysis and submit the report by the deadline.

Section3 requiresthe AuditorsofPublicAccounts(APA)to annually conduct a contract compliance audit of the fiscal intermediary contracted with DSS to provide services for self-directed home care programs resulting in a cost to the state.

The APA does not have the resources to meet the requirements of the bill and will have to hire two auditors for a salary and other expenses cost of $220,678 in FY 27 and $215,698 in FY 28, along with associated fringe benefit costs of $89,226 in FY 27 and FY 28.

Sections 4 and 5 establish penalties related to late or inaccurate payments to self-directed PCAs.

The bill requires penalties to be paidby the fiscal intermediary (FI) contractor or by DSS if no contractor is in place.

DSS currently contracts with a fiscal intermediary for a variety of services including managing individual client budgets, processing of Medicaid claims, and processing of payroll for PCAs.

To the extent penalties are imposed, DSS may incur related costs.

Specifically, penalties include financial penalties for failing to timely process PCA payroll ($25 to $60 per check), 12% interest for certain paychecks behind by two or more pay periods, payment for damages of $25 or more due to late payment, and potential additional penalties DSS may assess on the fiscal intermediary for failing to make timely payments according to contractual requirements.

The bill also specifies penalties apply when the Electronic Visit Verification System (EVVS) includes hours that exceed those allotted to the consumer or incorrectly sSB498 / File No.

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487 shows hours that are available and reimbursable.

These penalties are valued at the rates payable to a PCA for such hours.

Section 4 also results in a potential cost to OPM beginning in FY 27 to the extent there is increased arbitration with a labor organization representing PCAs and the PCA Workforce Council within OPM.

Arbitration costs are estimated to be $2,000 per hearing and $2,500 per day after for decision drafting.

Any cost will be dependent on the number of arbitrations.

Section 6 requires all state agencies and contracted communications (including electronic systems used to log employee hours) to comply with federal Americans with Disabilities Act (ADA) communication standards and municipal language communication requirements.

This results in a cost to various state agencies to the extent they are required to update systems, adjust various processes, and hire additional staff to ensure compliance with the requirements of the bill.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to employee wage increases and inflation.

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487 OLR Bill Analysis SB 498 AN ACT CONCERNING PENALTIES FOR TARDY PAYCHECKS FOR PERSONAL CARE ATTENDANTS AND EXPANDING PUBLIC ACCESS TO STATE PROGRAMS.

SUMMARY This bill sets requirements related to the Department of Social Services (DSS) and the fiscal intermediary (currently GT Independence) it contracts with to provide payroll, tax, and administrative services for self-directed home care programs.

These are Medicaid-funded programs that allow a consumer to directly hire and manage a personal care attendant (PCA).

Specifically, the bill:

1.

requires DSS to post on its website quarterly reports related to its fiscal intermediary’s performance, such as the intermediary’s most recent completed audited financial statements and the number of customer service requests and average response times (§ 1);

2.

requires the Office of Policy and Management (OPM), in consultation with DSS, to conduct a cost-benefit analysis on (a) transferring fiscal intermediary duties for these programs to the state and (b) allowing PCAs who are ineligible for Medicare, Medicaid,ortheCoveredCTProgramtoaccessastate-subsidized health insurance program (§ 2);

3.

requires the Auditors of Public Accounts to annually conduct a compliance audit of DSS’s fiscal intermediary for these programs and report its findings to the Human Services and Labor and Public Employees committees (§ 3);

4.

requires DSS contracts with fiscal intermediary services for these programs to include (a) financial penalties for failing to timely sSB498 / File No.

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487 process PCA payroll and (b) specified damages that DSS or the fiscalintermediary must pay resulting fromtardy payments(§4);

5.

requires these contracts to also include financial penalties for when DSS or the fiscal intermediary uses an electronic visit verification system (EVVS) that does not accurately reflect PCA hours worked under these programs (§ 5);

and 6.

requires state agencies and private agencies they contract with to ensure that all public and employee communications, including an EVVS employees use to log hours worked, (a) comply with federal Americans with Disabilities Act requirements for effective communications and (b) are offered in other languages, under certain circumstances (§ 6).

EFFECTIVE DATE:

July 1, 2026, except that the provision on the cost- benefit analysis takes effect upon passage.

§ 1 — QUARTERLY REPORTS The bill requires DSS to post on its website, and submit to the Human Services and Labor andPublic Employees committees, quarterly reports that include the following information, so long as it is not exempt from disclosure under the state’s Freedom of Information Act:

1.

the fiscal intermediary’s most recent completed audited financial statements;

2.

all budget, customer service telephone call center, and service level agreement reports;

3.

the number of general customer service requests and average response time;

4.

the number of telephone calls, voice mail messages, and email and text messages received from consumers and PCAs, how the fiscal intermediary responded to these messages, and how many were responded to in a contractually required period;

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the number and amount of penalties levied, on a monthly and weekly basis, against the fiscal intermediary for contract violations for customer service request response times and PCA and consumer inquiry response times;

and 6.

all PCA timesheet reports.

Under the bill, PCA timesheet reports include:

1.

the number of weekly consumer approvedtimesheets submitted, and how many were submitted on time, resubmitted after correction, and paid on time;

2.

the timesheet and payroll processing error rates;

and 3.

the number and amount of penalties levied, on a monthly and weekly basis, against the fiscal intermediary for violating contract provisions on timesheets.

The bill’s reporting requirement begins with information from the quarter that began April 1, 2024.

(It does not otherwise set a date by when DSS must begin posting the reports.) § 2 — COST-BENEFIT ANALYSIS Under thebill,thecost-benefit analysismust document thedirect and indirect cost savings and qualitative and quantitative benefits of the state handling the duties of a privately contracted fiscal intermediary, including the following:

1.

the costs of timesheet processing errors by thefiscal intermediary to consumers, PCAs, and the state and recommendations and benefits related to ensuring accurate timesheet processing;

2.

the effects of timesheet processing errors and health insurance costs on PCA retention rates and related state costs;

3.

how effectively consumer eligibility changes and PCA programmatic changes are communicated and the benefits of sSB498 / File No.

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and 4.

cost benefits to the state of performing fiscal intermediary duties within the existing infrastructure instead of contracting out these services.

The bill requires the OPM secretary to report to the Human Services and Labor and Public Employees committees on (1) the cost-benefit analysisresultsand(2) a planfor thestateto performfiscalintermediary duties if the analysis shows cost benefits to the state.

The secretary must do this by October 1, 2026, and in consultation with the DSS commissioner.

§ 4 — PENALTIES FOR PCA PAYROLL FAILURES Penalties The bill requires DSS contracts with fiscal intermediaries for self- directed home care programs (or DSS administrative policies for these programs, if the department does not contract these services) to include financial penalties for failing to timely process PCA payroll, in addition to 12% interest for paychecks behind by two or more pay periods if the accrued interest exceeds $10.

This requirement applies to contracts DSS enters into, renews, or amends on or after August 31, 2026.

Under the bill, the penalties are as follows:

1.

$25 for tardy paychecks between $99.01 and $250;

2.

$35 for tardy paychecks between $250.01 and $500;

3.

$45 for tardy paychecks between $500.01 and $750;

4.

$55 for tardy paychecks between $750.01 and $1,000;

and 5.

$65 for tardy paychecks over $1,000.

DSS or its contractor (if applicable) must pay PCAs the above penalties per pay period only if the (1) PCA logged, or attempted to log, hours before the time submission deadline for the pay period;

(2) sSB498 / File No.

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487 consumer who hired the PCA approved the hours;

and (3) approved hoursdo not exceed the consumer’sallottedhoursunder their care plan.

The bill allows DSS to assess additional penalties against the fiscal intermediary for failing to make timely payments according to contractual requirements.

These penalties may include interest on late payments equal to the monthly yield for Connecticut’s Short Term Investment Fund (STIF, see BACKGROUND).

Damages The billalso requiresthese contractsto requirethefiscalintermediary (or DSS if it does not contract these services) to pay for damages resulting from tardy payments of at least $25 documented by a labor organization representing PCAs and approved by the PCA Workforce Council.

If the labor organization and council disagree on whether damages are sufficiently documented, either party can expedite arbitration.

Under the bill, damages may include, among other things, late fees on rent or utilities or bank overdraft charges assessed against a PCA in the 30 days before the tardy paycheck is issued.

PCAs must document these fees and charges with original bills or notices.

§§ 5 & 6 — ELECTRONIC VISIT VERIFICATION SYSTEMS Penalties The bill requires DSS contracts with fiscal intermediaries for self- directed home care programs (or DSS administrative policies for these programs, if the department does not contract these services) to include financialpenaltiesfor whenDSS orthefiscalintermediaryusesanEVVS that (1) includes hours for PCA services that exceed the consumer’s allotted hours under their care plan or (2) otherwise incorrectly shows hours are available and reimbursable under state or federal law.

Under the bill, the penalties must be paid to a PCA through the normal payroll process and equal the PCA’s normal or overtime rates for these hours (as applicable), provided the (1) PCA worked the hours and logged, or attempted to log, them on the EVVS before the pay period’stime submissiondeadlineand(2)consumer who hiredthePCA sSB498 / File No.

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Communications The bill requires state agencies and private agencies they contract with to ensure that all public and employee communications, including an EVVS employees use to log hours worked, (1) comply with federal Americans with Disabilities Act requirements for effective communications (providing free auxiliary aids and services) and (2) are offered in any other languages designated for the municipality where the member of the public or employee lives according to state law on language-related assistance in voting and elections.

(Generally, the law requires municipalities to provide language-related assistance if the secretary of the state deems a significant and substantial need exists.) BACKGROUND Related Bills sHB 5003, favorably reported by the Labor and Public Employees Committee, includes substantially similar provisions on DSS quarterly reports (§ 25).

sHB 5353, favorably reported by the Government Oversight Committee, includes substantially similar provisions on DSS quarterly reports.

Short-Term Investment Fund Connecticut’s STIF is a statutorily created investment fund managed by the state treasurer that pools and invests operating cash from the state, quasi-public agencies, municipalities, and other political subdivisions.

Its primary objectives are ensuring the safety and preservation of its principal and providing immediate liquidity to its participants while maximizing returns.

By law, the state treasurer may invest STIF moneys in a range of security investments, including savings accounts, repurchase agreements, and U.S.

government and agency obligations, among others.

In FY 25, STIF’s portfolio averaged approximately $18.3 billion and yielded a 4.86% return.

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487 COMMITTEE ACTION Human Services Committee Joint Favorable Yea 17 Nay 6 (03/19/2026) sSB498 / File No.

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