CARES Act Information
- Direct payment to Individuals ($1.2K/individuals, $2.4K/families, $500/child)
- Expands unemployment insurance for four months
- Makes emergency loans and resources available for small businesses
- Stabilizes key national industries that will help workers
- Gives major relief and resources for health care providers, including $100B for hospitals
- Makes investments in new medicines, therapeutics, and vaccines
- Income for American Families
- One-time tax rebate check.
- $1,200 per individual, $2,400 per couple and $500 per eligible child.
- Not reduced for lower income Americans.
- They are reduced for higher income earners, starting at $75,000 for individuals,$112,500 for head of household, and $150,000 for married couples.
- Phases out completely at $99,000 for individuals and $198,000 for married couples
- Expanded unemployment insurance to cover gig workers and self -employed and non-profit employees.
- Small Business Assistance
- New SBA- backed loan program to help small businesses pay for expenses.
- Loans taken by small businesses to keep employees on payroll may be forgiven.
- 501 (c)(3)swill also be eligible for this program.
- Federal government will forgive 8 weeks of cash flow, rent and utilities at 100% up to 2.5x averagemonthly payroll.
- Assistance To Distressed Job Creators
- Loans, loan guarantees, and investment authority totaling $529 billion, with $454 billion to be usedby Treasury, working with the Federal Reserve, for all sectors and $75 billion in loans, guarantees and grants for passenger airlines, cargo carriers, and businesses critical to national security.
- Ensuring Access To Care For All Americans
- Increase in Medicare reimbursement rate to assist providers caring for our most vulnerable population.
- Increases access to testing by allowing the Strategic National Stockpile to stockpile swabs necessary for test kits.
- Allows the FDA to quickly approve the use of new medication and treatments.
- Facilitates the use of new and innovative telemedicine techno logy to protect and contain the spread of COVID-19.
- Direct Funding to Combat the Pandemic
- $340 billion supplemental appropriation
- $150 billion for states, cities, localities to fight pandemic.
- Support for health care workers and hospitals.
- Funding for PPE.
- Support for our local responders.
- Funding for the research of new treatments and vaccines.
- Support for small businesses.
- Support our local colleges and universities.
- Support for veteran healthcare.
- Support for DOD response to COVID-19.
- $340 billion supplemental appropriation
Frequently Asked Questions
Q: Unemployment Insurance – are the self-employed, gig workers, and contractors eligible?
A: Yes, the bill expands unemployment benefits to cover more workers including self-employed and independent contractors, like gig workers and Uber drivers, who do not usually qualify for unemployment. Overall, the bill provides $250 billion in funding for expansion of unemployment benefits, the largest increase ever.
Q: Does this bill provide individuals more compensation on Unemployment Insurance than they receive via employment?
A: The enhanced UI is designed to keep as many as whole as possible. Some may temporarily receive more benefit than previous payment – though that number is very small relative to the number of people who will be filing UI claims in next few weeks.
Right now, states pay between $250-500/week in unemployment and they base it on a percentage of a worker’s paycheck, usually between 1/3 to 1/2 of prior earnings. An additional $600 will put some workers at or just above their usual paycheck – this increase only lasts until July 31st. Additionally, the worker must have been laid off by their employer, so they can not voluntarily “opt-in” by quitting. The main point of the overall bill is to provide a lifeline to small businesses, so they don’t have to lay people off in the first place. Without this bill, the UI problem will be magnitudes worse.
Q: Are churches eligible?
A: Yes, churches are eligible for the forgivable loans available under the Paycheck Protection Program.
Q: Do you need to file a Form 990?
A: No church should have to file a Form 990. If you are told you need to file a Form 990, please contact our office at (202) 225-4021.
Q: What box do you check on the SBA Application Form 2483 for a church?
A: Churches should check the “501(c)(3) nonprofit” box in the top left corner of the form.
You do not need to have any formal recognition from the IRS in order to be considered a 501(c)(3) entity. You do not need a determination letter from the IRS.
Q: Why should I check the “501(c)(3) nonprofit” box?
- You are automatically recognized as a 501(c)(3) organization as long as you are organized and operated exclusively for the exempt purposes outlined in section 501(c)(3).
- To qualify for tax-exempt status, the organization must meet the following requirements:
- the organization must be organized and operated exclusively for religious, educational, scientific or other charitable purposes;
- net earnings may not inure to the benefit of any private individual or shareholder;
- no substantial part of its activity may be attempting to influence legislation;
- the organization may not intervene in political campaigns; and
- the organization’s purposes and activities may not be illegal or violate fundamental public policy.
- For more information, see the Tax Guide for Churches & Religious Organizations (PDF)
Q: Are non-profits, chambers, physician practices, eligible for 7(a) loans?
A: 501(c)3 non-profits are eligible. No other 501(c) organizations are eligible, including chambers structured as 501(c)6s. Physician practices are eligible, no matter how they are structured.
Q: Can small businesses can hire back previously fired employees and still have the loans forgiven? If so, what is the hire-back date?
A: Yes. There is flexibility in the program to allow businesses to hire new, or returning employees, by June, 30, 2020, and still qualify under the headcount requirements.
Q: What does this bill do to provide relief for rural communities and farmers?
A: The bill includes a number of small business provisions designed to help farmers stay in business and take care of their employees during this difficult time. These include provisions that allow farmers to work with their trusted farm credit institutions for the purposes of securing payroll tax loans, along with 1-year deferrals, 100% guarantees, and low rates.
Q: How quickly will business be able to access loans?
A: We are working with the SBA on capacity issues, including onboarding new lenders. The SBA is assuring the Small Business Committee that they are ready to stand up all of the requirements within the Senate bill as quickly as possible.
The bill provides $14 billion for the Commodity Credit Corporation (CCC), the funding mechanism for all major USDA programs. It also appropriates an additional $9.5 billion to specifically respond to losses due to COVID-19.
Additional funding is provided for USDA agencies that are on the front lines of responding to COVID-19, including the Food Safety Inspection Service (FSIS), the Animal and Plant Health Inspection Service (APHIS), and the Farm Service Agency (FSA).
The bill also includes $100 million to provide financing for rural broadband through the ReConnect program, and $25 million for the Distance Learning and Telemedicine program to provide grants for equipment and connectivity improvements.
Q: What is the Employee Retention Credit?
A: The Employee Retention Credit is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. This Employee Retention Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for an Eligible Employer for qualified wages paid to any employee is $5,000.
Q: Who is an Eligible Employer?
A: Eligible Employers for the purposes of the Employee Retention Credit are those that carry on a trade or business during calendar year 2020, including a tax-exempt organization, that either:
- Fully or partially suspends operation during any calendar quarter in 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19; or
- Experiences a significant decline in gross receipts during the calendar quarter.
Note: Governmental employers are not Eligible Employers for the Employee Retention Credit. Also, Self-employed individuals are not eligible for this credit for their self-employment services or earnings.
Q: When is the operation of a trade or business partially suspended for the purposes of the Employee Retention Credit?
The operation of a trade or business may be partially suspended if an appropriate governmental authority imposes restrictions upon the business operations by limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19 such that the operation can still continue to operate but not at its normal capacity.
Example: A state governor issues an executive order closing all restaurants, bars, and similar establishments in the state in order to reduce the spread of COVID-19. However, the executive order allows those establishments to continue food or beverage sales to the public on a carry-out, drive-through, or delivery basis. This results in a partial suspension of the operations of the trade or business due to an order of an appropriate governmental authority with respect to any restaurants, bars, and similar establishments in the state that provided full sit-down service, a dining room, or other on-site eating facilities for customers prior to the executive order.
Q: What is a “significant decline in gross receipts”?
A significant decline in gross receipts begins with the first quarter in which an employer’s gross receipts for a calendar quarter in 2020 are less than 50 percent of its gross receipts for the same calendar quarter in 2019. The significant decline in gross receipts ends with the first calendar quarter that follows the first calendar quarter for which the employer’s 2020 gross receipts for the quarter are greater than 80 percent of its gross receipts for the same calendar quarter during 2019.
Example: An employer’s gross receipts were $100,000, $190,000, and $230,000 in the first, second, and third calendar quarters of 2020, respectively. Its gross receipts were $210,000, $230,000, and $250,000 in the first, second, and third calendar quarters of 2019, respectively. Thus, the employer’s 2020 first, second, and third quarter gross receipts were approximately 48%, 83%, and 92% of its 2019 first, second, and third quarter gross receipts, respectively. Accordingly, the employer had a significant decline in gross receipts commencing on the first day of the first calendar quarter of 2020 (the calendar quarter in which gross receipts were less than 50% of the same quarter in 2019) and ending on the first day of the third calendar quarter of 2020 (the quarter following the quarter for which the gross receipts were more than 80% of the same quarter in 2019). Thus the employer is entitled to a retention credit with respect to the first and second calendar quarters.
Q: How is the maximum amount of the Employee Retention Credit available to Eligible Employers determined?
The credit equals 50 percent of the qualified wages (including qualified health plan expenses) that an Eligible Employer pays in a calendar quarter. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for qualified wages paid to any employee is $5,000.
Example 1: Eligible Employer pays $10,000 in qualified wages to Employee A in Q2 2020. The Employee Retention Credit available to the Eligible Employer for the qualified wages paid to Employee A is $5,000.
Example 2: Eligible Employer pays Employee B $8,000 in qualified wages in Q2 2020 and $8,000 in qualified wages in Q3 2020. The credit available to the Eligible Employer for the qualified wages paid to Employee B is equal to $4,000 in Q2 and $1,000 in Q3 due to the overall limit of $10,000 on qualified wages per employee for all calendar quarters.
Q: What are “qualified wages”?
Qualified wages are wages (as defined in section 3121(a) of the Internal Revenue Code (the “Code”)) and compensation (as defined in section 3231(e) of the Code) paid by an Eligible Employer to employees after March 12, 2020, and before January 1, 2021. Qualified wages include the Eligible Employer’s qualified health plan expenses that are properly allocable to the wages.
The definition of qualified wages depends, in part, on the average number of full-time employees (as defined in section 4980H of the Code) employed by the Eligible Employer during 2019.
If the Eligible Employer averaged more than 100 full-time employees in 2019, qualified wages are the wages paid to an employee for time that the employee is not providing services due to either (1) a full or partial suspension of operations by order of a governmental authority due to COVID-19, or (2) a significant decline in gross receipts. For these employers, qualified wages taken into account for an employee may not exceed what the employee would have been paid for working an equivalent duration during the 30 days immediately preceding the period of economic hardship.
If the Eligible Employer averaged 100 or fewer full-time employees in 2019, qualified wages are the wages paid to any employee during any period of economic hardship described in (1) and (2) above.
Q: Is an Employer required to pay qualified wages to its employees under the CARES Act?
No. The CARES Act does not require employers to pay qualified wages. In addition, Eligible Employers may elect to not claim the credit for the Employee Retention Credit. (The FFCRA does require certain employers to pay sick or family leave wages to employees who are unable to work or telework due to a COVID-19 circumstance. These employers may be entitled to a refundable tax credit for those wages paid, although the employers may elect not to claim the credit.)
Q: Can Eligible Employers claim the Employee Retention Credit for qualified wages paid in March 2020?
Eligible Employers may claim the Employee Retention Credit for qualified wages that they pay after March 12, 2020, and before January 1, 2021. Therefore, an Eligible Employer may be able to claim the credit for qualified wages paid as early as March 13, 2020.
Q: May an Eligible Employer receive the Employee Retention Credit for periods after December 31, 2020?
No. The Employee Retention Credit is only available with respect to wages paid after March 12, 2020, and before January 1, 2021.
Q: Against what employment taxes does the Employee Retention Credit apply?
The credit is allowed against the employer portion of social security taxes under section 3111(a) of the Internal Revenue Code (the “Code”), and the portion of taxes imposed on railroad employers under section 3221(a) of the Railroad Retirement Tax Act (RRTA) that corresponds to the social security taxes under section 3111(a) of the Code.
Q: What makes the credit “fully refundable”?
The credits are fully refundable because the Eligible Employer may get a refund if the amount of the credit is more than certain federal employment taxes the Eligible Employer owes. That is, if for any calendar quarter the amount of the credit the Eligible Employer is entitled to exceeds the employer portion of the social security tax on all wages (or on all compensation for employers subject to RRTA) paid to all employees, then the excess is treated as an overpayment and refunded to the employer under sections 6402(a) and 6413(a) of the Code. Consistent with its treatment as an overpayment, the excess will be applied to offset any remaining tax liability on the employment tax return and the amount of any remaining excess will be reflected as an overpayment on the return. Like other overpayments of federal taxes, the overpayment will be subject to offset under section 6402(a) of the Code prior to being refunded to the employer.
Example: Eligible Employer pays $10,000 in qualified wages to Employee A in Q2 2020. The Employee Retention Credit available to the Eligible Employer for the qualified wages paid to Employee A is $5,000. This amount may be applied against the employer share of social security taxes that the Eligible Employer is liable for with respect to all employee wages paid in Q2 2020. Any excess over the employer’s share of social security taxes is treated as an overpayment and refunded to the Eligible Employer after offsetting other tax liabilities on the employment tax return and subject to any other offsets under section 6402(a) of the Code.
Q: How does an Eligible Employer claim the refundable tax credit for qualified wages?
Eligible Employers will report their total qualified wages and the related credits for each calendar quarter on their federal employment tax returns, usually Form 941, Employer's Quarterly Federal Tax Return. Form 941 is used to report income and social security and Medicare taxes withheld by the employer from employee wages, as well as the employer’s portion of social security and Medicare tax.
In anticipation of receiving the credits, Eligible Employers can fund qualified wages by accessing federal employment taxes, including withheld taxes, that are required to be deposited with the IRS or by requesting an advance of the credit from the IRS.
Q: Can an Eligible Employer paying qualified wages fund its payments of qualified wages before receiving the credits by reducing its federal employment tax deposits?
Yes. An Eligible Employer may fund the qualified wages by accessing federal employment taxes, including those that the Eligible Employer already withheld, that are set aside for deposit with the IRS, for other wage payments made during the same quarter as the qualified wages.
That is, an Eligible Employer that pays qualified wages to its employees in a calendar quarter before it is required to deposit federal employment taxes with the IRS for that quarter may reduce the amount of federal employment taxes it deposits for that quarter by half of the amount of the qualified wages paid in that calendar quarter. The Eligible Employer must account for the reduction in deposits on the Form 941, Employer's Quarterly Federal Tax Return, for the quarter.
Example: An Eligible Employer paid $10,000 in qualified wages (including qualified health plan expenses) and is therefore entitled to a $5,000 credit, and is otherwise required to deposit $8,000 in federal employment taxes, including taxes withheld from all of its employees, for wage payments made during the same quarter as the $10,000 in qualified wages. The Eligible Employer has no paid sick or family leave credits under the FFCRA. The Eligible Employer may keep up to $5,000 of the $8,000 of taxes the Eligible Employer was going to deposit, and it will not owe a penalty for keeping the $5,000. The Eligible Employer is required to deposit only the remaining $3,000 on its required deposit date. The Eligible Employer will later account for the $5,000 it retained when it files Form 941, Employer's Quarterly Federal Tax Return, for the quarter.
Q: May an Eligible Employer reduce its federal employment tax deposit by the qualified wages that it has paid without incurring a failure to deposit penalty?
Yes. An Eligible Employer will not be subject to a penalty under section 6656 of the Code for failing to deposit federal employment taxes relating to qualified wages in a calendar quarter if:
- the Eligible Employer paid qualified wages to its employees in the calendar quarter before the required deposit,
- the amount of federal employment taxes that the Eligible Employer does not timely deposit, reduced by any amount of federal employment taxes not deposited in anticipation of the paid sick or family leave credits claimed under the FFCRA, is less than or equal to the amount of the Eligible Employer’s anticipated Employee Retention Credit for the qualified wages for the calendar quarter as of the time of the required deposit, and
- the Eligible Employer did not seek payment of an advance credit by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19, with respect to any portion of the anticipated credits it relied upon to reduce its deposits.
For more information, about the relief from the penalty for failure to deposit federal employment taxes on account of qualified wages, see Notice 2020-22 (PDF).
Q: How can an Eligible Employer that is paying qualified wages fund the payment of these wages if the Eligible Employer does not have sufficient federal employment taxes set aside for deposit to cover those payments? Can the employer get an advance of the credits?
Yes. Because quarterly returns are not filed until after qualified wages are paid, some Eligible Employers may not have sufficient federal employment taxes set aside for deposit to the IRS to fund their qualified wages. Accordingly, the IRS has established a procedure for obtaining an advance of the refundable credits.
The Eligible Employer should first reduce its remaining federal employment tax deposits for wages paid in the same calendar quarter by the maximum allowable amount. If the anticipated credit for the qualified wages exceeds the remaining federal employment tax deposits for that quarter, the Eligible Employer can file a Form 7200, Advance Payment of Employer Credits (IRS) Due to COVID-19, to claim an advance refund for the full amount of the anticipated credit for which it did not have sufficient federal employment tax deposits.
If an Eligible Employer fully reduces its required deposits of federal employment taxes otherwise due on wages paid in the same calendar quarter to its employees in anticipation of receiving the credits, and it has not paid qualified wages in excess of this amount, it should not file the Form 7200. If it files the Form 7200, it will need to reconcile this advance credit and its deposits with the qualified wages on Form 941 (or other applicable federal employment tax return such as Form 944 or Form CT-1), and it may have an underpayment of federal employment taxes for the quarter.
Example: An Eligible Employer paid $20,000 in qualified wages, and is therefore entitled to a credit of $10,000, and is otherwise required to deposit $8,000 in federal employment taxes, including taxes withheld from all of its employees, on wage payments made during the same calendar quarter. The Eligible Employer has no paid sick or family leave credits under the FFCRA. The Eligible Employer can keep the entire $8,000 of taxes that the Eligible Employer was otherwise required to deposit without penalties as a portion of the credits it is otherwise entitled to claim on the Form 941. The Eligible Employer may file a request for an advance credit for the remaining $2,000 by completing Form 7200.
Q: May an Eligible Employer receive both the tax credits for the qualified leave wages under the FFCRA and the Employee Retention Credit under the CARES Act?
Yes, but not for the same wages. The amount of qualified wages for which an Eligible Employer may claim the Employee Retention Credit does not include the amount of qualified sick and family leave wages for which the employer received tax credits under the FFCRA.
Q: May an Eligible Employer receive both the Employee Retention Credit and a Small Business Interruption Loan under the Paycheck Protection Program that is authorized under the CARES Act?
No. An Eligible Employer may not receive the Employee Retention Credit if the Eligible Employer receives a Small Business Interruption Loan under the Paycheck Protection Program that is authorized under the CARES Act (“Paycheck Protection Loan”). An Eligible Employer that receives a paycheck protection loan should not claim Employee Retention Credits.
Q: Is Planned Parenthood eligible for SBA loans and grants?
A: No, Planned Parenthood is not eligible for SBA grants or loans. Originally, the Senate bill contained a clause that excluded nonprofits that received Medicaid (i.e. Planned Parenthood) from participating in the Paycheck Protection Program. This exclusion clause was ultimately removed from the final bill.
However, the final bill binds nonprofits to the SBA’s affiliation rules. The bill permits nonprofits to participate in SBA’s loan programs, provided they have 500 employees or less. Planned Parenthood is a nonprofit and is subject to the 500 employee cap and the affiliation rule. Therefore, Planned Parenthood and their affiliates are not eligible for SBA grants or loans, as they have more than the allowable 500 employees.
Q: Are businesses that employ more than 500 employees across multiple locations eligible for the Paycheck Protection Program at each individual location?
A: A business is generally eligible for the Paycheck Protection Program if it is a for-profit business, 501c3, or 501c19 (veterans organization) nonprofit with fewer than 500 employees. There are a few exceptions. Businesses in the accommodation and food service industry (assigned a North American Industry Classification System code beginning with 72) with more than one location, a business could also eligible at the store and location level if the store employs fewer than 500 workers. In other words, each store location could be eligible.
Previous Senate drafts required the accommodation and food service industry business to have less than $500 million in gross receipts to be eligible. This $500 million requirement has been removed from the Senate’s final bill. Lastly, if franchisors that appear in the SBA’s National Franchise Directory, assistance will extend down to the franchisee at the store or location level.
AIRLINES AND DISTRESSED INDUSTRIES
Q: Regional airports/airlines – what assistance are they eligible to receive?
A: Passenger airlines are eligible for $25 billion in loan authority and $25 billion in grants to maintain their operations, employee payroll, and contracts around the country. The bill also includes $4 billion in loan authority and $4 billion in grants for cargo air carriers.
The bill also provides $10 billion in grants through the Airport Improvement Program to support projects and operations at airports around the country. It also provides $3 billion in grants for contractors employed by the airlines, to ensure that airlines can maintain existing operations contracts. The bill also includes $56 million for the Essential Air Service to maintain existing air service to rural communities.
Q: Within the tourism industry, who is eligible and how are the funds accessed?
A: All industries and firms are eligible to benefit from the broad financing from the Treasury fund to the extent they don’t receive sufficient assistance from other programs. How to access this support will depend on the size and model of the business and the exact facility used.
Q: What does this bill do to put restrictions on the airlines accepting grants and loans?
A: The loans come with conditions including: restrictions on executive compensation; prohibition on stock buybacks and the prohibition on paying dividends for the duration of the loan plus 12 months; the airline or business must maintain its existing employment levels through September 30, 2020 to the extent practicable, and in no case reduce it by more than 10%.
Q: How does it support airports and affiliated contractors?
A: The bill provides $10 billion in grants to airports to help them maintain employment, continue operations, clean and sanitize to prevent the spread of coronavirus, and service airport construction debt.
The bill also provides $3 billion in payroll support grants to airline contractors, including baggage handlers, wheelchair pushers, and caterers. These grants can only be used for paying employees and contractors that receive grants must maintain current employment levels through September 2020.
Q: How does the “conflict of interest” prohibition for the president and members of Congress apply?
A: Conflicts of Interest:
- Applies only to the $500B allocated to Treasury – not the SBA lending provisions.
- Applies to President, Vice President, head of any executive department, any Member of Congress, and their immediate family members (spouse, children, son-in-law, daughter-in-law).
- If Member (or President/Vice President/head of executive department) combined with that individual’s family members controls or owns more than 20% of any class of equity security of a company (by voting rights or value), that means that company is ineligible for lending under the $500B allocated to Treasury.
- Applies not just to public companies but also private companies (LLCs, S corps, etc.).
Principal executive officer and financial officer of each company seeking funding under Treasury lending must certify that the conflict of interest section does not apply to their company (i.e., they are not controlled by a Member/President/VP/head of exec department or those peoples’ family).
Q: Does the bill provide assistance to cruise lines, the owners and operators of small passenger vessels, or port facilities?
A: In general, the CARES Act provides $454 billion to provide loans, loan guarantees, and other investments to assist eligible businesses. Eligible business are U.S. businesses whose losses result from the coronavirus, and U.S.-owned cruise lines, owners and operators of small passenger vessels, and port facilities are expected to qualify.
Q: Does the bill provide any regulatory relief to the trucking industry?
A: The CARES Act includes language requested by the Department of Transportation (DOT) to clarify state authority to issue special permits for increased truck weight. Under either a “major disaster” or “emergency,” states can issue special permits for heavier trucks to deliver relief supplies. This ensures the validity of state-issued special permits.
Q: What are the labor provisions related to the Federal Reserve loan facility and how do they apply?
A: There are no mandatory union provisions for the $454 billion in emergency funding. The Secretary has wide authority to establish the best programs needed to support the economy.
Q: What are the union provisions in the bill?
A: There is a section in the bill instructing the Secretary to “endeavor to seek” to establish a mid-size business lending facility for direct lending as one of several facilities funded with that $454 billion. Two of the requirements for direct loan recipients under solely the mid-size business lending facility impose union-related restrictions. Those include not abrogating existing Collective Bargaining Agreements (CBAs), and an agreement that the business will stay neutral in union organizing.
What do they do?
- The provisions restrict the business from abrogating an existing collective bargaining agreement and agreeing to stay neutral in any labor union formation.
Will businesses have to agree to these restrictions?
- The section only requires the Secretary to “endeavor to seek” to establish a direct loan program. The Secretary does not have to establish one.
- The bill text only requires a good faith certification by a business that it is meeting the requirements of the union provisions if one is established.
- There is no enforcement mechanism.
- It is also important to remember these provisions apply to only one option for how the $454 billion in funding will be distributed.
- The bill provides several ways for the Treasury to work with the Fed to get money to businesses outside of the union provisions.
What flexibility does the Secretary have to waive the provisions?
The Secretary has maximum flexibility: Remember, the point of the emergency lending is to give the Secretary maximum flexibility for helping our most distressed sectors of our economy. In the bill text, you will see that the Treasury Secretary has a great deal of discretion and waiver authority. For example, the bill preserves the Secretary’s right to waive certain restrictions for the loan if it’s to “protect the interest of the Federal government.” And the bill only requires a good faith effort for the Treasury Secretary to try to follow the terms and conditions, but it’s not a requirement. The Treasury Secretary may not be able to follow it or might decide to structure midsize business support differently.
Are there other provisions in the bill that impact unions or union activity?
- Yes. Section 4025 of the bill prevents the government from requiring an air carrier to enter into collective bargaining agreement (CBA) negotiations to get a loan. It does not prevent an air carrier from entering CBA negotiations on its own.
- The airline industry does not oppose this provision.
Q: How does bill address the PPE and COVID-19 testing shortage?
A: The bill provides $16 billion explicitly for the National stockpile. This funding can purchase medical supplies, equipment, and medicine to be distributed to states.
Q: How does the bill help individuals with mental health needs?
A: EXPANDS TELEHALTH SERVICES: Opens up expanded telehealth services in the Medicare program, allowing seniors across the nation to receive any current telehealth approved service (not just COVID related services), including mental health and substance abuse services. This will allow seniors to receive critically important mental health and substance use disorder services in their homes without having to forgo care or risk infection by entering the community.
IMPROVED CARE COORDINATION FOR PATIENTS WITH SUBSTANCE USE DISORDER: Ensures that health care providers can more effectively care for patients with substance use disorders (especially those with comorbid mental illness and other chronic diseases) by better aligning the treatment of substance use disorder medical records subject to 42 CFR Part 2 with HIPAA.
REAUTHORIZES THE EXCELLENCE IN MENTAL HEALTH DEMONSTRATION PROGRAM: Reauthorizes and expands Certified Community Behavioral Health Clinics, which provide critical services both in person and via telemedicine to tens of thousands of vulnerable Americans with suffering with mental health or addiction issues.
PROVIDES ADDITIONAL FUNDING TO THE SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES ADMINISTRATION (SAMHSA): Provides a total of $425 million for SAMHSA to be used to support grants to address suicide prevention, mental and behavioral health priorities for tribes and tribal organizations, Certified Community Behavioral Health Clinics, and other emergency substance use disorder or mental health needs in local communities.
- Certified Community Behavioral Health Clinics: $250 million to increase access to mental health care services.
- Suicide Prevention: $50 million to provide increased support for those most in need of intervention.
- SAMHSA Emergency Response Grants: $100 million in flexible funding to address mental health, substance use disorders, and provide resources and support to youth and the homeless during the pandemic.
Q: Will emergency service providers be eligible for telehealth provisions?
A: Emergency service providers are still required to respond to the scene if they are dispatched through a 911 emergency call. However, emergency service providers will be able to use funds from the Public Health and Social Services Emergency Fund in order to authorize treatment in place and alternative destinations of care besides the hospital for ground ambulance responders. These emergency service providers should be able to use telehealth tools and capabilities in order to treat patients on site or determine if they require care at an alternative site. These concepts of treatment in place and alternative destinations of care for emergency responders are found in the Administration’s Emergency Triage, Treat, and Transport (ET3) Model released last year aimed at providing greater flexibility for first responders and patients.
Q: Why aren’t phone calls – which are low-tech and easier than video conferencing – eligible for telehealth reimbursement?
A: We understand that seniors may have issues with video conferencing for telehealth purposes, particularly in areas where there is a lack of broadband, especially rural areas. The limitation on telemedicine was originally included as a guardrail by House Democrats in package 2 to ensure unscrupulous providers didn’t start reaching out to beneficiaries they had no relationship with to bill for unneeded or non provided services. But we all realize how important keeping our vulnerable seniors out of the community setting is during this public health emergency. We can only assume the Senate did not include phone calls to be eligible for telehealth reimbursement because doctors already complete many regular calls with seniors that are currently notbillable. Without a clear delineation between those standard calls and new COVID authority related telehealth calls, there is not a good way to cover audio-only telehealth without a massive expansion in costs, even without patients receiving new services.
Q: Are state and local governments eligible for relief funds?
A: Yes, Eighty percent of funding provided by Division B, the appropriations section, goes out through existing grants to support state, local, tribal, and community grantees. Funding is provided to numerous programs within the Agriculture; Labor-Health-Education; Interior; Homeland Security; Commerce-Justice-Science; and Transportation and Housing subcommittees. For additional questions on Division B, please contact the Appropriations Committee. Some programs included within the appropriations division are:
- Community Development Block Grants – $5 billion
- Homelessness Grants – $4 billion
- Transit Agencies – $24 billion
- Airports – $10 billion
- Assistance to Tribal Communities (Indian Health Service, Bureaus of Indian Education/Affairs, and Food Distribution) – $1.7 billion
- Disaster Relief Fund – $45 billion
- Emergency Food and Shelter Grants – $200 million
- First Responder (FIRE) Grants – $100 million
- Emergency Management Program Grants – $100 million
- Byrne Justice Assistance Grants – $850 million
- Economic Assistance Development Grants – $1.5 billion
- Manufacturing Extension Partnership Grants – $50 million
- Child nutrition – $8.8 billion
- Supplemental Nutrition Assistance Program – $15.8 billion
- Community Services Block Grant – $1 billion
- Low Income Home Energy Assistance Program – $900 million
- Child Care and Development Block Grant – $3.5 billion
- CDC Funding for State Public Health Departments – $1.5 billion
Q: Are the DOD and VA eligible for relief funds?
A: The bill provides a total of $10.5 billion for DOD functions and programs, including $1 billion to expand availability of necessary supplies through the Defense Production Act, $3.4 billion for defense health care programs, and $1.5 billion to support the deployment of the National Guard.
The bill provides a total of $19.6 billion for the Department of Veterans Affairs and veterans programs. In addition, if VA is called upon by the federal emergency coordination council to care for non-Veterans, it will be reimbursed through the Public Health and Social Security Emergency Fund. Funding provided in the bill for the PHSSEF assumes VA will be reimbursed approximately $4 billion.
Q: How will funds be distributed to hospitals, including rural hospitals?
A: The bill appropriates $100 billion to hospitals and other health care providers. We believe HHS will hire a third-party claims processor, similar to a Medicare Administrative Contractor. This processer will use criteria, outlined by HHS, to determine (1) eligibility of provider, (2) justifiability of amount, (3) amount of claim, (4) payment, and any other information determined by HHS. We also assume there will be an administrative appeals process. We do not know specifics yet as this is a new program. The bill provides wide latitude to the Administration to determine program parameters.
Additionally, the bill provides money for providers through Medicare:
- Allows for accelerated Medicare payments. This will help hospitals, especially those facilities in rural and frontier areas, get the reliable and stable cash flow they need to help them maintain an adequate workforce, buy essential supplies, create additional infrastructure, and keep their doors open to care for patients.
- Creates a 20 percent add on payment for inpatient treatment
- Delays the sequester until the end of this calendar year, which gives providers both money and certainty
Q: Will nursing homes be able to access the same account as hospitals?
A: Nursing homes may be eligible, but that remains an open issue. Significant parameters will need to be issued by HHS on the process, information, and eligibility.
Q: Why is there a $25 million appropriation for “Congressional Salary and Expenses” in the bill?
A: $25 million is provided to the Chief Administrative Officer, which is appropriated under the Salaries and Expenses account for the House of Representatives. Before funds can be spent, a spend plan is to be provided to and approved by the Committee on Appropriations. These funds are intended for computer purchases for teleworking, technology for video town halls, equipment for computer imaging, expansion of IT Customer support, and emergency expenses to support the Sergeant at Arms. These funds are not intended to be used to increase salaries of Members or staff.
Q: How will the $150 billion Coronavirus Relief Fund for states and local government be allocated?
A: Coronavirus Relief Fund (Sec. 5001) – A program created under the Department of the Treasury to provide funding to States, Tribes, and localities to offset lost revenue as a result of the coronavirus public health emergency. The bill provides an appropriation of $150 billion to be distributed by formula based on population. Eligible local governments may apply directly to the Treasury for funding and amounts paid to a state will be reduced accordingly.
Who is eligible to apply and receive funding?
- States, eligible local government, Tribal governments, DC, and the territories.
How is funding distributed?
- Funding is paid based on a state share of the total population, subtracting any amounts paid to local governments.
- No state can receive less than $1.25 billion.
- $3 billion is reserved for the District of Columbia, Puerto Rico, Virgin Islands, Guam, Northern Mariana Islands, and American Samoa. The amount for each is based on population.
- $8 billion is reserved for Tribal governments after consultation.
What is the timing for distributing funds to states?
- Funds must be paid within 30 days of enactment.
How is funding allocated to states?
- State receive an amount equal to their relative population, deducting any amount that may have been paid to units of local government within the state who applied for funding independent of the state.
What criteria is used to determine if local governments can apply?
- A local government means any county, municipality, town, or other unit of general government with a population greater than 500,000.
- Smaller units of local government will need to work with their states to access funding.
How much can local governments receive if they apply directly?
- In no event will the total amount allocated directly to local units of government exceed 45% of the state’s allocation.
- A local government may receive 45 percent of the amount provided to the state times its relative population to the state
- Ex: Town Population ÷ State Population x 45%*(total amount for state)
How is population determined?
- The most recent year for which data are available from the Bureau of the Census.
What can funds be used for?
- Funds may only be used to cover the costs associated with necessary expenses incurred as a result of the coronavirus diseases 2019 public health emergency, not accounted for in the most recently approved state budget, for calendar year 2020. The fungibility of certain aspects of public budgeting and the general sorts of revenue shortfalls that are expected in the current economic climate makes it unclear how restrictive those limitations will be in practice.
- Covered by protections and restrictions that apply to annual LHHS appropriations, including Hyde.
Q: What funding is provided to the Federal Emergency Management Agency (FEMA) to support state and local response efforts?
A: The CARES Act infuses $45 billion into FEMA’s Disaster Relief Fund (DRF), which will be added to the existing amounts in the DRF (approximately $40 billion). This funding will help response efforts in states with approved major disaster declarations. The bill also includes $100 million for FEMA’s Emergency Management Performance Grants (EMPG), which support state and local emergency management capacity; $100 million for Assistance to Firefighter Grants to support the acquisition of personal protective equipment; and $200 million for FEMA’s emergency food and shelter program.