Thousands of foster children could lose their homes if California doesn’t pass this law | Opinion
Thousands of foster children throughout California will soon be at risk of losing their current homes because of yet another insurance crisis in a state that seems to have more insurance problems than solutions.
Nine out of 10 foster family agencies in California are backed by the same insurer — the national insurance company Nonprofits Insurance Alliance, also known as NIAC in California — a single nonprofit risk pool, where a group’s total costs are combined to calculate premiums.
In a shocking announcement made in June, NIAC announced it would “be forced to non-renew” these foster family agencies soon, “unless immediate changes are made to the judicial process.”
Their decision to not renew the agencies’ mandated insurance has led to a statewide panic, and may result in California’s county welfare agencies picking up the slack. But county welfare agencies are already ill-equipped and underfunded; they can’t handle a handful of new cases dropped in their laps, much less thousands.
It’s a mess. And it’s unclear whether counties throughout the state and the Newsom administration are going to quickly step into the breach to avoid a real crisis.
Whatever California counties can do to fill the gap, there is no way it will be enough to protect the thousands of at-risk foster children who need stability and security, and who could be displaced from their current homes as soon as Sept. 30.
Legal and financial chaos
Foster family agencies — commonly known as FFAs — are private non-profit organizations that currently serve approximately 9,700 of the 45,000 children living in California’s foster care system.
These non-profit organizations work to recruit foster parents and help them get certified to host foster children, or train them to work with high-risk placements. Many of these agencies specialize in services for medically-fragile children, LGBTQ+ youth, older foster youth and children with unique needs.
Foster family agencies are licensed by the Department of Social Services and undergo rigorous licensing processes, as well as a national accreditation process and ongoing oversight by state and county agencies. These organizations provide 24/7 support to foster families, including reunification services, supervised visitation and assistance with transportation, medical care coordination, respite care and much more.
These agencies need insurance to protect themselves from any legal liability of their vital activities. If their insurance is not renewed by the insurance alliance, “These would … not be licensed families that we would be able to work with,” said Eileen Cubanski, interim executive director of the County Welfare Directors Association of California.
“(We would) have to take in these families and re-license them as county-licensed family resource families to maintain those placements. It’s not easy to do, to turn on a dime.”
Cubanski said the Welfare Directors Association has been working with the state to potentially create a high-risk insurance pool that could help foster family agencies maintain their licensure and continue operating.
“We’ve got a looming crisis here,” she said. “If we can’t support FFAs in the short run, we’ve got to figure out a longer term solution.”
‘Crushing foster family agencies’
A state law enacted in recent years allows former foster youth to file claims against foster family agencies for abuse or neglect without any statute of limitations. The insurer is now claiming it’s facing a wave of lawsuits and potential settlement costs that it simply cannot handle.
“The judicial system has changed,” NIAC wrote in its announcement. “Right now, it’s crushing foster family agencies across California.”
Assembly Bill 218, passed in 2019, expanded the definition of childhood sexual assault and increased the time limit for legal action to the age of 40, or within five years of discovering the psychological injury or illness caused by the sexual assault. It also provided for the recovery of up to three times as much against certain defendants.
“This is very real,” NIAC wrote. “A blanket nonrenewal would cause a collapse of the California foster family system.”
The nonprofit’s decision comes after a series of high-profile, high-payout claims against foster family agencies in California to the tune of several million dollars. Abused, former foster children deserve compensation and justice, but it cannot come at the cost of bankrupting the state’s foster care system. Yet that’s what appears to be happening.
Not unlike the insurance companies now pulling out of wildfire-prone areas of California, foster family agencies in California will find it difficult — if not impossible — to find insurance they are required to have to continue operating.
Dr. Tiffany Sickler, executive director of Koinonia Family Services, a foster family agency based in Rancho Cordova, said Koinonia has operated for more than four decades since 1982 — but it may have to close its doors if NIAC pulls out of the state.
As the cost of living rises in the state, it becomes increasingly costly to care for foster kids.
“(For) 20 years, we’ve been cutting corners every year,” Sickler said. “It just feels like the state is trying to eliminate nonprofit social service agencies like ours.”
Liable only for themselves
Assembly Bill 2496, introduced by assembly members Gail Pellerin, D-Santa Cruz, and Evan Low, D-Campbell, is now off the suspense file and back in the Assembly. The Nonprofits Insurance Alliance is a sponsor.
The bill would hold foster family agencies liable for any injury or damage caused by their own negligence, but would modify those non-profits’ potential liability for harms caused by the county — like when a county fails to disclose information that leads the agency to make an unfit placement. The bill would require the agency and the county to each bear the cost of insuring themselves and defend only themselves against such claims.
“AB 2496 is necessary for the survival of FFAs in California,” said Chris Stoner-Mertz, president and CEO of the California Association for Children and Family Services, which represents 165 non-profit organizations serving foster children and families, nearly 70 of which are foster family agencies. Nearly all of which would be at risk of closing if NIAC pulls out. In fact, a quick poll by Stoner-Mertz’ team found that by the end of October of this year, nearly 2,000 foster children would be displaced across 100 foster family agencies, out of more than 200 agencies statewide.
Abuse in foster care a serious violation
Children living in foster care have a well-known and documented history of experiencing far greater instances of abuse, neglect and abandonment. Forcing nearly thousands of children to leave their foster families come Sept. 30 would only be further destabilizing.
According to the Children’s Law Center of California, nearly half of all kids in foster care have experienced some kind of adverse childhood experience.
Foster youth are more likely to be chronically absent from school, and they have a 53% graduation rate, compared to the state average of 83%. Research also indicates foster youth experience rates of homelessness ranging from 11% to 38% — disproportionately higher than that of the general population.
These are children in our state who most need stable, loving care from adults. But in turn, those adults must have an organization that is willing to provide services, support and training to back them.
If foster family agencies in California are forced to close, not only will there be no such support, but counties will be forced to take on a caseload they are unprepared for in every way. Foster children will suffer for it.
‘Cheaper than dragging this through court’
The law that allows former foster children to sue FFAs for restitution without a statute of limitations — while morally sound and necessary — has placed the state’s foster family agencies at risk of paying out huge settlements for incidents that sometimes have little proof.
“We’ve had attorneys contacting us and threatening us, saying, ‘I have a client (who’s) saying back in 1986 that they were sexually abused in one of your foster homes,’” said Dr. Sickler. “And they’re like: ‘You’ll probably just want to settle with us. It’ll be cheaper than dragging this through court.’”
Foster children are already suffering. They are missing their families, may be dealing with trauma from abuse or neglect, are likely struggling at school and are statistically at greater risk of homelessness and drug use. These children need every chance we can give them at a stable, loving home where they can grow up to be productive, happy members of our community.
Without foster family agencies providing services and support to families, the very lives of thousands of foster children in California will be at risk, and we will have failed in our social and moral duty to the most vulnerable among us.
There is nothing short of an emergency happening in the California foster care system right now, and the legislature must treat it that way before more children are put at risk.
