Families First and CARES acts provide companies with multiple relief opportunities, healthcare providers receive unique offerings

Mar 30, 2020

The Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), are, collectively, the largest aid package ever passed and intended to address the economic fallout of the 2020 coronavirus (COVID-19) pandemic in the United States.

Although eligibility criteria may vary, many companies may be eligible for loans and/or grants under multiple categories. Application processes for some relief opened immediately, while eligibility criteria and application processes for others have not been promulgated, but are expected to be released in very short order. Both laws have created a lot of questions from our clients and companies across the U.S. regarding what aspects apply to them and how they can take advantage of the new regulations, guidelines and funding.

For healthcare providers, there are components of the laws worth investigating, including:

  • Accelerated payments to Medicare to Part A and Part B Providers (Available immediately.  See MAC webpages for applications.)
  • Grants from $100 billion fund reserved for healthcare providers to make up lost revenue or support additional costs that are attributable to the coronavirus; this fund will be administered by the US Department of Health & Human Services subject to guidance and requirements issued by the Department.

For businesses in all industries, there are other elements of the new laws worth evaluating, including:

  • Emergency FMLA Expansion, which provides employees up to 12 additional weeks of job-protected FMLA leave for those who are unable to work or telework due to a need to care for a child whose school or child-care provider is closed as a result of a public-health emergency (for employers with less than 500 employees or government employers). There is an ability to exempt “healthcare providers” and “emergency responders” from coverage.
  • Emergency Paid Sick Leave Act, which provides employees who have been employed for at least 30 days with paid sick time at two-thirds of their regular rate of pay (subject to certain weekly caps) if leave is due to specific COVID-19 pandemic related reasons (for employers with less than 500 employees or government employers). There is an ability to exempt “healthcare providers” and “emergency responders” from coverage.
  • Social Security Employer Payroll Tax Deferral, which allows employers to defer payment of the employer share of Social Security Payroll tax (6.2% on the first $137,700 of an employee's wages) for the period starting on the date of enactment of the CARES Act through the end of 2020.
  • 50% Wage Credit for Severe Wage Disruption, which provides a refundable payroll tax credit for 50 percent of wages paid by employers to employees during the COVID-19 crisis.
  • SBA 7(a) Loan Program / Paycheck Protection Program (PPP), the primary program for providing financial assistance to small businesses (defined as small businesses, eligible nonprofit organizations, veterans organizations and tribal businesses) for loans up to $10 million with the eligible amount determined by 8 weeks of prior average payroll plus an additional 25 percent. There are nine types of loans that small businesses can qualify for, with expanded benefits under the new COVID-19 legislation.
  • SBA Economic Injury Disaster Loans (EIDLs), which provides assistance to small businesses when the SBA determine the business would be unable to obtain credit elsewhere.
  • SBA Loan Forgiveness provides forgiveness for qualified small businesses under section 7(a) of the Small Business Act 15 U.S.C. 636(a) a)).
  • SBA EIDL Grant Advance, which allows small businesses to receive up to $10,000 from an emergency grant advance within three days of an EIDL Loan application.
  • Treasury Exchange Stabilization Fund, which provides financial assistance for the exclusive use of employee wages, salaries and benefits.
  • Federal Reserve’s 13(3) lending, $454 billion for investment in support of Fed’s 13(3) lending facilities for loans, loan guarantees, and investments in support of the Federal Reserve’s lending facilities to eligible businesses, states, and municipalities.

Since it appears likely that the number of requests may exceed the total dollars allocated to some of the programs, we recommend that organizations take prompt action to identify potential opportunities and be prepared to apply at the earliest possible time. Although some regulations related to the loans have not yet been promulgated, we recommend reaching out to lenders now so that your application will likely be processed earlier in the queue and there will still be funds availability.