Understanding Military Child Care Fee Assistance: How Business Rules Add a Fourth Layer

Operation Child Care Project™
2 days ago
5 min read

Military families seeking child care fee assistance navigate a complex framework of requirements from three sources: federal statute (10 USC § 1798), DoD policy (DoDI 6060.02), and service-specific implementation. Through a Freedom of Information Act request, OCC Project obtained documents revealing that DoD has added a fourth layer through "Business Rules" developed following the September 2023 Child Care Summit. Rather than removing barriers, these rules rename and reorganize existing restrictions while introducing additional classifications that further complicate what families can access.

At the foundation, 10 USC § 1798 establishes statutory requirements that only Congress can change: community providers must be state-licensed, have previous experience serving military or federal families, and fall into approved categories like family child care homes or nonprofit centers.

The second layer, DoDI 6060.02, adds DoD-wide quality standards including accreditation requirements and fee calculations based on Total Family Income. This instruction acknowledges that "in areas where there is a lack of accredited high quality care, families may be approved to use non-accredited providers on a case by case basis", but nowhere does published policy explain who approves these exceptions, what criteria apply, how to request them, or whether denials can be appealed.

The third layer consists of service-specific policies that add varying restrictions like geographic (typically 15 miles from installations), spouse employment requirements, and lists of which bases qualify for fee assistance, to name a few. These policies are rarely published in accessible locations or clear language. OCC Project has spent years helping families from all branches navigate exception processes that official policy never documents, discovering that approvals happen remarkably frequently. Programs appear operationally built around flexibility that written policy doesn't acknowledge.

The Fourth Layer: Business Rules

The April 9, 2025 memo from the Principal Deputy Assistant Secretary of Defense introduces "Business Rules" that originated from recommendations at the September 15, 2023 Child Care Summit. OCC Project documented that this summit had no public registration process and no identified military family participants despite being promoted as gathering "input from service members and their spouses." Known attendees were exclusively Pentagon officials, long-standing DoD partners, and academic administrators. This closed-door meeting now justifies policy changes affecting hundreds of thousands of military families.

The Business Rule Guidance document introduces a critical distinction between two types of internal procedures. "Business Rules" are defined as "over-arching Department of Defense procedure that outlines requirements and provides actions and limitations that Services must use" and "will be used for guidance that is more permanent in nature and needs the 'authority' of DoD leadership to require the Services to implement." "Business Processes" are "a sequence of tasks or activities performed in the implementation of the business rules," are documented in MCCYN Reference Guides, are "easier to update and provides flexibility," and notably, "may later become business rules." This creates a moving target where operational processes can be elevated to mandatory requirements without formal policy revision.

The document states its purpose addresses the problem that "MCCYN program operation and execution decisions made during Military Service meetings and working groups are not well documented or formalized, and as a result, are not always distributed thoroughly or applied consistently." Rather than solving this by publishing clear family-facing guidance, DoD created internal documentation for administrators. The memo encourages Military Services to "implement the MCCYN Business Rule Guidance in advance of formal policy making" with a March 31, 2026 deadline, meaning these restrictions take effect before becoming official policy subject to standard review processes.

The Two-Tier System

The Business Rules introduce a two-tier provider classification that rebrands existing accreditation barriers. Tier 1 providers must meet "quality indicators" including state licensure, annual inspection, and either MCCYN-PLUS or national accreditation. These are the same requirements that currently create access problems. Tier 2 providers need only state licensure and annual inspection, appearing to lower barriers until reading further: "Families can enroll with a Tier 2 provider without receiving an exception if an area is validated as having a shortage of Tier 1 providers."

The guidance never explains who validates shortages, what criteria determine validation, how families know if their area qualifies, or how to request validation. Families can also use Tier 2 providers without exception if already enrolled before starting fee assistance, if a sibling uses that provider, or if no Tier 1 providers exist within 15 miles. This "15-mile rule" appears nowhere in federal statute or DoDI 6060.02, representing a service-level restriction now codified in Business Rules.

The guidance definitively states: "Private schools/organizations can only participate in MCCYN if they are fully licensed without a State exemption. Per section 1798 of Title 10, United States Code, unlicensed providers, including those operating under a religious exemption, are not authorized to receive financial assistance on behalf of DoD families." This settles that religious exempt providers and schools who operate legally under state exemption statutes cannot participate, despite the statutory language only requiring providers be "licensed to provide those services under applicable State and local law". DoD interprets "licensed" to exclude those operating under lawful exemptions, narrowing the provider pool in states where private schools have expanded early childhood education and religious exempt centers are common.

The Business Rules list "APPROVED MCCYN ELIGIBILITY EXCEPTION REASONS" including medical circumstances, special needs accommodations, deployment/TDY, disabled spouse, and "Other: The Military Services may approve other exceptions on a limited case by case basis." This confirms exception authority exists at the Military Service level, not with installation commanders or DoD headquarters. However, the guidance provides no information on how families request these exceptions, what documentation is required, what timeline to expect, or whether denials can be appealed.

For provider exceptions, families can use Tier 2 providers in certain circumstances "without a Service exception," implying other circumstances do require Service exceptions, but again with no explanation of the request process. The document establishes provider management procedures including probation (minimum 6 months), suspension (9-18 months), and termination (12-18 months) statuses. A "cross-Service review board" makes suspension and termination decisions, and a "DoD Provider Qualifying Team" manages probation. These entities make significant decisions affecting family child care access, but who sits on them is not public.

What Remains Unclear for Families

Despite 18 pages of detailed Business Rules, families approaching the March 31, 2026 implementation deadline have no public communication about these changes. The addition of a new age-group restriction raises more questions about eligibility and how families should proceed in an already complex process. The guidance answers internal administrative questions while leaving family-facing questions unaddressed: How do you request a Service-level eligibility exception? What constitutes proof that your area has been "validated" as having a Tier 1 provider shortage? Can you appeal if your Service denies an exception? What documentation proves your spouse's medical condition qualifies for the medical exception?

The April 2025 memo states "the working group is now focused on the next phase, improving the experience for families participating in MCCYN." The working group composition includes "Child and Youth Professionals from each Military Service and DoD" but no family advocates, no military spouse organizations, and no congressional liaisons who regularly hear constituent concerns. OCC Project has heard from hundreds of families whose real barriers include unclear approval authorities, inconsistent application of unstated policies, and inability to plan because eligibility criteria aren't published. These Business Rules formalize many restrictions families already encounter, but do nothing to address the transparency gap.

Military families now navigate four distinct policy layers: federal statute establishing baseline requirements that cannot be waived, DoD policy adding quality standards with undefined exceptions, service-specific implementation adding geographic and employment restrictions, and Business Rules that can become Business Processes that may later become Business Rules again. Each layer adds requirements without clearly explaining how families access exceptions that policy acknowledges exist.

The March 31, 2026 implementation approaches with no indication DoD plans to communicate these changes to affected families or participating providers. OCC Project will continue publishing documents obtained through FOIA requests and assisting individual families, but transparency should not require advocacy organizations to reverse-engineer policy from internal guidance documents. Military families need published, accessible guidance that explains not just what the rules are, but how the system actually works when families don't fit standard categories.