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A Christmas Miracle! Congress Agrees on a New Coronavirus Relief Bill

After nine months of negotiations and stalemates, Congress finally reached an agreement for a $900 billion relief package on December 20, 2020. Included are many familiar provisions from the March CARES Act, with a particular emphasis on small business benefits and relief for health care providers.

For Businesses and Employers

The bill added a welcome $284 billion in Paycheck Protection Program (PPP) loans for first- and second-time small business borrowers. Unlike in the CARES Act, businesses taking a PPP loan now may also take the Employee Retention Tax Credit. Businesses can use PPP loans to pay for expanded qualified expenses and when used for such expenses, the loans are forgivable. Expenses paid for with PPP loans may also be deducted from taxable income.

Open sign in storeIn a win for impact-centered and uniquely small businesses, nonprofit eligibility was expanded, and funds were set aside for both very small businesses and community-based lenders. An additional $43.5 billion was set aside for continued Small Business Administration (‘SBA’) debt relief payments, while $2 billion was provided for expanded SBA lending. Criteria has been tightened to limit loans for second-time borrowers to those with fewer than 300 employees and a 25 percent drop in gross receipts during a 2020 quarter over the same period last year.

Other highlights include:

  • $20 billion in new Economic Injury Disaster Loan (EIDL) grants for businesses in low-income communities.
  • $15 billion marked for live venues, independent movie theaters, and cultural institutions.
  • The Employee Retention Tax Credit is expanded to a maximum of $14,000 from a previous $5,000. Employers can now take this credit as well as PPP funds.
  • The Low-Income Housing Tax Credit (LIHTC) is expanded to subsidize construction and renovation of low-income housing developments.
  • Extension of employer-side Social Security payroll tax credits to offset paid sick and family leave related to coronavirus.
  • Business meal deductions are expanded to 100 percent for 2021 and 2022, at an expected cost of $5 billion.

For Health Care Providers

A person receiving a vaccineThe bill also includes $63 billion for coronavirus-related healthcare initiatives. Nearly $20 billion was set aside for the purchase of vaccines, $8 billion for vaccine distribution, and $20 billion for states to continue their COVID-19 testing and contact tracing programs. And as the stress of the pandemic takes a toll on the American psyche, $4.25 billion was set aside for mental health initiatives and substance abuse programs.

It’s no secret that hospitals and health systems have suffered extreme financial losses during 2020 – nearly $323 billion dollars due to pandemic-related costs, according to the American Hospital Association. In an attempt to alleviate these losses, an additional $3 billion dollars has been added to the Provider Relief Fund, which initially received $175 billion to be distributed by the U.S. Department of Health and Human Services (‘HHS’). The additional $3 billion is a stark contrast to earlier proposals that suggested at least $35 billion would be added to the fund.

Health care providers might breathe a sigh of relief to note that proposed budget sequestration – which would result in 2% cuts to Medicare payments for physicians – has been delayed again, while the budget neutrality cuts which would result in a cut of over 10% in Medicare payment rates were also mitigated. Part of this mitigation is due to a 3-year delay in the implementation of the new CMS add-on code G2211, which would have accounted for nearly 3% of Medicare spending. Additionally, a 3.75% pay raise across all payments and specialties has been added to the 2021 Medicare Physician Fee Schedule.

Emergency RoomOne aspect of the relief bill won’t take effect until 2022, however. A ban on surprise billing will make it illegal for hospitals to charge patients often-exorbitant fees for out-of-network emergency services, which patients usually have no choice but to accept. Under this legislation, patients would only pay the deductibles and co-pays for which they are responsible under their own insurance plans, leaving insurance providers and hospitals to settle the differences.

As a long and grueling year comes to a close, the above measures provide some relief for individuals, businesses, and health care providers alike. If you have any questions regarding these or other coronavirus relief measures, please contact your McBrayer attorney.

Anne Tyler MorganAnne-Tyler Morgan is a Member of McBrayer law.  Her law practice primarily focuses on politics, elections, and campaign finance, nonprofit institutions and associations, foster care and adoption, administrative law, healthcare law, pharmacy law and transactional healthcare and transactional agreements. Ms. Morgan can be reached at atmorgan@mcbrayerfirm.com or (859) 231-8780, ext. 1207. 

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This article does not constitute legal advice

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