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Thurs., March 26, 202 Updates:
The Cares Act, also referred to as “Phase III” of the coronavirus response package, passed the Senate last night (March 25, 2020) 96-0. It is a $2 trillion stimulus bill meant to provide economic relief to individuals, families, small businesses and other sectors of the United States economy. The final bill includes $250 billion in direct payments to individuals, $350 billion for small businesses, and authorization of $500 billion for Treasury’s Exchange Stabilization Fund to support companies impacted by the COVID-19 pandemic. The bill also includes expanded unemployment insurance, $150 billion for states and localities, as well as $130 billion for hospitals in need of critical supplies such as ventilators and masks. As of Thursday, March 26, it is scheduled to be voted on by the U.S. House of Representatives Friday, March 27, or as soon as Thursday, March 26, 2020. Once passed in the House and signed by the President, most provisions are available to individuals and businesses almost immediately.
Documents: Coronavirus Aid, Relief, and Economic Security Act (CARES ACT)
H.R. 748 - CARES ACT FINAL TEXT / Purpose: Providing emergency assistance and health care response for individuals, families and businesses affected by the 2020 coronavirus pandemic. (document as IN THE SENATE OF THE UNITED STATES - 116th Cong., 2d Sess. (this document is 880 pages in length)
CARES Section-by-Section FINAL (Keeping American Workers Paid And Employed Act)
The following is drawn from information compiled and summary formulated by the Georgia Chamber (adapted from the National Manufacturing Association Summary) - covers only the Business Provisions, Individual Provisions and Health Care Provisions):
$500 billion in loans to eligible businesses
- Targeted at companies that do not receive adequate relief from other provisions of the bill, located in the U.S. and with a predominantly U.S. employee base
- Eligible businesses must maintain employment levels from March 24, 2020 to September 30, 2020
- Prohibits stock buybacks, dividend payments and increasing compensation for certain high wage employees
$350 billion in small business loans administered nominally through the SBA, called the “Paycheck Protection Program.” Loans will be administered through local and regional banks; any federally regulated bank may become an SBA lender for this purpose. The Department of the Treasury will issue regulations for these loans quickly. SBA lenders will be able to determine eligibility credit worthiness by determining whether a borrower was operational on March 1, 2020 and had employees that they paid salaries and payroll tax. The government guarantee of 7(a) loans would be increased to 100% through the end of 2020, at which point the guarantee would return to 75% for loans over $150,000 and 85% for loans less than or equal to $150,000. The complete deferment of 7(a) loan payments are permitted for up to one year.
- Targeted at companies with less than 500 employees or otherwise specified by SBA standards
- Loans can be used for payroll, mortgages, rent, insurance premiums and utility payments.
- Up to $10 million per company available
- Cannot apply for SBA disaster loan related to COVID-19 and loans under this program at the same time
- Loans can be forgiven up to the amount spent by the borrower during the eight weeks from loan origination on payroll costs up to $100,000 in wages, mortgage interest, rent or utilities
- Additionally, $24 billion is set aside for relief to stabilize the farm economy.
- CARES Act provides checks of up to $1,200 to single individuals and $2,400 to married couples (as well as $500 per child). Check amounts begin to reduce as income exceeds a threshold amount ($75,000 for individuals/$150,000 for married filers) and are completely eliminated once income reaches $99,000 for individuals/$198,000 for joint filers with no children.
- Waives the 10% penalty for distributions from certain retirement plans. Only applicable to individuals diagnosed with COVID-19, whose spouse or dependents have been diagnosed or who experience adverse financial consequences from the virus.
Health Care Provisions
- $150 billion for hospitals and other health facilities, which will come from the Department of Health and Human Services (HHS) and more funding for small and rural hospitals
- Provides permanent liability protections for makers of PPE that are called for public health emergency countermeasures.
- Clarifies no COVID-19 cost sharing for private insurance, requires free vaccine coverage without cost sharing following current vaccine practices guidelines and includes a range of public health measures to address COVID-19 treatment and response, including liability protections for doctors who volunteer.
- Removes barriers and facilitates telehealth services, especially for high deductible health plans that utilize health savings accounts.
- Provides $200 million to boost telehealth services.
Sources: Georgia Chamber, Medical Association of Georgia