The Benefit Bridge Employer Pilot Program is a new two-year initiative established in the state’s biennial budget, H.B. 33. The budget includes $3.0 million for FY 2024 and $5.0 million for FY 2025 for the Ohio Department of Jobs and Family Services (JFS) to support this program. The Benefit Bridge Employer Pilot Program will provide grants to eligible employers to incentivize employees who receive public assistance to complete additional training to receive higher pay to replace the public assistance.
The Benefit Bridge Employer Pilot Program will provide grants to eligible employers to incentivize employees who receive public assistance to complete additional training to receive higher pay to replace the public assistance.
The only eligibility requirement provided in H.B. 33 for participating employees is that they must be a recipient of assistance from the Supplemental Nutrition Assistance Program (SNAP), Ohio Works First, Medicaid, or a publicly funded child care program.
Employer Eligibility and Responsibilities
Employers who want to participate in the pilot program have more eligibility requirements and responsibilities than employees. First, an employer must have been registered with the Secretary of State for at least two years to do business in Ohio. Next, they must provide written intention to participate in the program to JFS. Additionally, the employer must submit a benefit replacement plan and a description of training programs for each participating employee. The benefit replacement plan must include use of a benefit cliff calculator to determine the hourly wage increase required to replace the assistance received and the training program must include a financial literacy course. The employer must certify the amount of one-time training incentives that will be offered and the wage increase that will be given after completion of the training program. Finally, the employer must receive written approval of the plan and report relevant wage/salary information.
After JFS certifies that the participating employee no longer receives or will imminently stop receiving assistance from SNAP, Medicaid, Ohio Works First, or a publicly funded childcare program they will release the grant funds to the employer. Participating employers may not receive more than $5,000 per participating employee and no more than $100,000 over the course of the pilot program.
The aspect of this program that gives it so much potential is that the law requires that the higher pay provided to the employee replaces the public assistance received. This requirement, along with the required use of a benefit cliff calculator works towards addressing the benefit cliff. The benefit cliff is that moment when low-wage workers are offered promotions or raises but turn it down because they do not want to lose their public assistance benefits and risk ending up worse off in the short-term. By requiring use of a benefit cliff calculator and that the higher pay replace the public assistance, it would ensure that employees are not worse off after taking the raise and no longer having public assistance.
The benefit cliff is that moment when low-wage workers are offered promotions or raises but turn it down because they do not want to lose their public assistance benefits and risk ending up worse off in the short-term.
This program is not Ohio’s first attempt at addressing the benefit cliff. The State ran a two-year pilot program, the Benefit Bridge, which provided low-wage workers job-coaching assistance and financial incentives benchmarked to employment goals, as well as subsidized employment. As part of this program, JFS reported that they were developing a benefit cliff calculator. An example of a benefit cliff calculator would be the Federal Reserve Bank of Atlanta’s Career Ladder Identifier and Financial Forecaster (CLIFF) suite of tools, which models the interaction of tax credits, public benefits, and taxes with wage progression.
What to watch during the pilot program
There are a few notable questions that will be answered as the pilot program progresses. First is the question of participation.
- Will the grant, with a maximum value of $5,000 per participating employee, provide sufficient financial incentive for employers to participate? To receive the grant, employers not only need to create a training program but also increase pay so that it replaces public assistance received by the participants.
- While the legislation requires that the pay increase replace the public assistance received, will this requirement be sufficient to encourage eligible employees to participate?
The final question, which likely will not be answered by this pilot program and will continue to be discussed by policymakers and advocates, is whether this is the most efficient way to address the benefit cliff. There are many strategies Ohio can pursue to reduce or eliminate the benefit cliff and this pilot program adds to the list of possible strategies.
Community Solutions will continue to follow the Benefit Bridge Employer Pilot Program and advocate for policies that support Ohioans in their efforts to move up.