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AB 2278

In-home supportive services: Community First Choice Option program: noncompliance penalties.

2025-2026 Regular Session

AB 2278 requires counties to pay 100% of lost CFCO funds if timely CFCO reassessments lapse (starting 2026), and launches a Contra Costa five-year pilot using approved transcriptio

Referred to Com. on HUMAN S.
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Bill Summary · AB 2278

Summary of AB 2278 (Session 2025-2026) — In-home supportive services: CFCO program penalties; Contra Costa pilot

Purpose and intent

  • Establish two main measures affecting the California In-Home Supportive Services (IHSS) program and the Community First Choice Option (CFCO): 1) Create a cost-related mechanism for counties when CFCO-related timely case reassessments lapse, shifting a portion of enhanced federal CFCO funds to counties as a penalty/offset. 2) Authorize a five-year pilot in Contra Costa County to test innovative technologies (with strict consent and guardrails) to speed IHSS eligibility processing for CFCO participants.

Key provisions and changes

  1. CFCO noncompliance penalties (mandatory financial mechanism)

    • Starting July 1, 2026, if the state loses enhanced federal CFCO funds because of noncompliance with timely case reassessment, the affected county must pay 100% of the lost enhanced CFCO funds for the months the state did not receive them. This payment is separate from the IHSS Maintenance of Effort (MOE) payment.
    • For the 2025–26 fiscal year, the state and county would share the loss of enhanced CFCO funds equally (50/50).
    • By July 1, 2029, the Department of Finance must prepare and submit to the Legislature a report detailing the amount of payments counties made under this provision.
    • The 100% county share applies to the portion of enhanced federal funds unavailable due to noncompliance with timely reassessment for CFCO, not to general CFCO funds.
    • The bill retains and elaborates complex MOE and cost-sharing rules related to IHSS funding, wage/benefits adjustments, and inflation adjustments, including specific subparagraphs about 65/35 state/county shares for certain increases and one-time adjustments for some benefit changes.
    • It clarifies that reimbursable MOE adjustments are limited to specified adjustments (not all administrative or wage-related changes).

  2. Contra Costa County–specific five-year pilot (pilot project for efficiency and CFCO)

    • Adds a new section (12306.165) creating a five-year pilot for Contra Costa County to improve IHSS eligibility processing times and CFCO-related processing.
    • The pilot runs for calendar years 2027 through 2031.
    • The county must test innovative technologies that transcribe and summarize IHSS in-home eligibility interviews to shorten processing times, with the primary focus on CFCO eligibility processing.
    • Written consent is required for using transcription/summarization technologies, and consent must explain purpose, data collected, ability to withdraw consent, and that services/benefits are not conditioned on consent.
    • Transcriptions or summaries produced by the technologies must be reviewed by a human caseworker before use in decisions about IHSS services.
    • Data collected through these technologies may only be used for IHSS eligibility interviews and must not be retained or shared beyond that purpose (including with third-party vendors).
    • The caseworker may discontinue use of the technology or disregard a transcript/summary if it does not accurately reflect the information provided; this cannot result in adverse employment action.
    • Counties must post annual progress and outcome reports on their websites during the implementation period.
    • The definition of “innovative technology” is limited to transcription/summarization tools and explicitly excludes tools that generate predictions, scores, or make decisions about benefits.
    • Legislative findings emphasize the uniqueness of Contra Costa County and the need for fiscal relief and system improvements due to high CFCO-related late penalties.
    • If the California Commission on State Mandates determines costs are mandated costs, local reimbursement rules apply.

Who is affected

  • Counties statewide: Changes to MOE calculations, cost-sharing for wage/benefit adjustments, and the new CFCO penalty mechanism (starting 2026) could impose additional financial exposure for counties when CFCO timely reassessments lapse.
  • Contra Costa County: Explicitly targeted for a five-year pilot program to test innovative IHSS eligibility technologies; subject to reporting requirements and consent safeguards.
  • IHSS recipients and CFCO participants: Potentially faster eligibility processing in Contra Costa due to the pilot; however, the general CFCO penalty provisions relate to funding stability and ongoing CFCO participation across all counties.
  • State and local agencies: Department of Finance, California State Association of Counties, County Welfare Directors Association, and the California Association of Public Authorities have roles in fiscal allocations, guidance, and implementation.

Procedural and timeline notes

  • In-state fiscal and policy framework for IHSS MOE and CFCO already exists; AB 2278 adds:
    • A 2026 start for the new CFCO noncompliance payment obligation (county pays 100% of lost CFCO funds).
    • A 2029 reporting requirement from the Department of Finance on the county payments made under the CFCO noncompliance provision.
    • A 2027–2031 five-year pilot window for Contra Costa County to test transcription/summarization technologies in IHSS eligibility interviews, with mandatory human review, consent, and annual public reporting.
  • The bill includes standard constitutional provisions about potential state mandate reimbursements to local agencies if mandated costs are found.

Implications and considerations

  • The CFCO penalties create a financial incentive for counties to ensure timely CFCO case reassessments, but they also raise concerns about how penalties would be funded and reported, and how they interact with MOE and other cost-sharing rules.
  • The Contra Costa pilot aims to address processing times and CFCO-related eligibility challenges using technology while strictly safeguarding privacy, consent, and human oversight.
  • Overall, AB 2278 seeks to align federal CFCO funding with state/local accountability and to pilot targeted innovation to improve eligibility workflows in a high-penalty county.

Note: This summary focuses on the bill’s substantive provisions, their intended effects, and the populations affected. For implementation details, refer to the bill text and legislative analyses.

Compiled from official sources — confirm details with the bill’s official record.

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