October 2, 2024
The Honorable Gavin Newsom
Governor, State of California
1021 O Street, Suite 9000
Sacramento, CA 95814
RE: Act Now to Help Save Over 9,700 Foster Children from Being Displaced by the FFA Insurance Crisis
Dear Governor Newsom:
On behalf of the California Alliance of Child and Family Services (the CA Alliance), and the undersigned organizations, we request the Governor and its Administration to lead in finding a solution to prevent over 9,700 foster children under the care of Foster Family Agencies (FFAs) from being displaced by the FFA insurance crisis. If we don’t act now, FFAs could be forced to close their doors, leading to foster children potentially being uprooted from their home, school, community, healthcare provider, social worker, and current placements. We ask the Governor’s Office and Administration to work in collaboration with the CA Alliance to find solutions to the FFAs insurance crisis so they can continue to support parents working towards reunification, foster families, and the over 9,700 foster youth under their care.
Background on the CA Alliance & FFAs
The CA Alliance is a member association that represents over 160 nonprofit community-based organizations that provide behavioral health, child welfare, education, prevention, juvenile justice and other critical services to children, youth and families in public systems, including FFAs. Many of these services are provided through contracts with county public agencies and/or health plans.
FFAs play a crucial role in helping the Administration achieve its goals to reform the child welfare system. Counties rely on FFAs to help support the needs of foster children because FFAs specialize in serving medically fragile children, LGBTQ+ youth, older foster youth and children with higher needs. FFAs are trained to care for youth who have experienced abuse, exploitation, poverty, and racism and can offer services that counties do not have the capacity to provide.
There are nearly 45,000 children and youth in the California foster care system, the vast majority of whom have been separated from their parents due to neglect or abuse. Today, approximately 9,700 of those children are placed under the care of FFAs, which is nearly 1 in 5 foster youth. FFAs help to support family reunification efforts, which aim to safely return children in foster care to their biological families whenever possible and appropriate. This means FFAs work closely with birth families and offer parenting classes, substance abuse counseling, mental health services, and other resources designed to help parents or relatives create a safe and stable home environment. FFAs also assist with transporting and supervising visits between foster children and their relatives, which could be a few hours away.
When reunification is not possible, FFAs work to recruit foster parents and help them get certified to host foster children. FFAs also help to train foster families, and cover training expenses, so these families can properly support high-risk placements and ensure foster parents are well-prepared to handle the complexities of fostering. FFAs provide 24/7 on call assistance and help connect foster parents to social workers in moments of crisis, many times helping the family stabilize so they can continue offering foster children a safe home.
FFA Insurance Crisis
FFAs must be insured to be contracted to accept children and youth into their foster homes. Most insurers have left the market and no longer insure FFAs. A single insurance company, Nonprofits Insurance Alliance of California (NIAC) currently covers about 90% of all the FFAs in California. In June of this year, NIAC made the shocking announcement that it will be sending out notices of nonrenewal for coverages for all FFAs in the state of California.
This is forcing most FFAs to find alternative insurance, if it can be found, and if the FFA can afford the potential increased costs of a different insurance policy. These increased costs are not covered by the rates paid to FFAs, and therefore result in FFAs making difficult decisions, and in some cases, forcing them to close.
Impact of FFA Closures to the Child Welfare System
FFAs closing would result in California’s county welfare agencies needing to manage the placements of displaced foster children and youth. For foster children, being uprooted after finally settling into a family home is a devastating setback. It means starting from scratch in another new home, starting over with therapists and support specialists, even having to start a new school mid-year. Worse, it means losing their sense of stability. Multiple research studies show that the loss of a social worker alone can significantly disrupts the permanency process and severs yet another bond in a foster child’s life: with each loss of a social worker, the rate of achieving permanency for a foster youth drops dramatically from 74.5% with one social worker to less than 3% with three or more social workers. 1 FFAs help to create consistency in the lives of foster children.
If FFAs close, the lost capacity will mean that foster children will have a greater chance of being in unlicensed settings for long periods of time such as welcome centers, offices, hotels, and could even become homeless.
Action Needed to Prevent Displacing over 9,700 Foster Children
This crisis will not only impact the provision of FFAs that place children and youth with foster families, but also impact adoptions of children in foster care. FFAs who are dually licensed as adoption agencies are often contracted by counties to help children be adopted through foster care. In 2024, 30% of foster youth (6,505) were adopted out of foster care statewide, thanks in part to FFAs. We ask that the Governor’s Administration to work with the CA Alliance and FFAs to find solutions that help FFAs remain open, such as creating a pool of funds to help FFAs offset the higher insurance premiums and build a risk pool to avoid a future insurance crisis.
Should you require any additional information or documentation to process this change, please do not hesitate to contact Elizabeth Oseguera at eoseguera@cacfs.org. Thank you for your attention to this matter.
To view all signers, download the letter below.