NEW $484 BILLION CORONAVIRUS RELIEF PACKAGE SIGNED INTO LAW
On Friday, President Trump signed into law the fourth major coronavirus/COVID-19 relief package. The new law, the Paycheck Protection Program and Health Care Enhancement Act, commonly referred to as CARES 2.0, will extend funding under the CARES Act for much-needed relief to hospitals and small businesses affected by the pandemic. The Act’s massive relief package brings the total cost of the federal response to the COVID-19 pandemic to $2.8 trillion—the largest emergency relief effort in U.S. history. In addition to providing $310 billion of extended funding for the Paycheck Protection Program, the small business lending program implemented under the CARES Act, the Act also:
- Provides $75 billion for healthcare-related expenses and lost revenue attributable to COVID-19
- Provides $25 billion for COVID-19 testing
- Requires strategic planning with the states to increase testing
What are the Key Healthcare Provisions in the Act?
Healthcare Provider Relief Grants. An additional $75 billion for the U.S. Department of Health and Human Services (HHS) will be distributed through grants and other mechanisms to hospitals, health systems and other healthcare providers aimed at reimbursing healthcare expenses and lost revenue attributable to COVID-19. This is in addition to the $100 billion that the CARES Act previously set aside for the Public Health and Social Services Emergency Fund, a relief fund for eligible healthcare providers. HHS broadly distributed the original relief fund, with the first $30 billion being allocated to all Medicare-enrolled providers and suppliers based on 2019 fee-for-service reimbursement, with additional funds to be distributed to hospitals, rural providers, Medicaid providers and uninsured care.
Expanded HHS Authority and HHS Strategic Testing Plan. The Act provides the Secretary of HHS broad discretion to develop programs under these appropriations. Many discuss these funds as being used for hospitals, which are eligible, but as with the CARES Act, the Act does not prioritize the different categories of eligible healthcare providers with respect to this portion of the funding. Consistent with the CARES Act, the Act specifies that healthcare providers may (but are not required to) use the funds for expenses related to building or construction of temporary structures, leasing of properties, purchasing medical supplies and equipment (including personal protective equipment (PPE) and testing supplies), increased workforce utilization and training, establishing emergency operation centers, retrofitting facilities and managing the surge in capacity, among other activities. The Act further requires HHS to submit to Congress a strategic testing plan to assist the states. This plan would address how HHS will increase domestic testing capacity and federal resources to greater expand overall capacity. HHS would update this plan every 90 days until all testing funds under the Act are spent.
Funding for COVID-19 Testing. The Act also provides $25 billion to support efforts to expand capacity for COVID-19 tests. It provides $11 billion for states, localities, territories and tribes for COVID-19 tests, increasing laboratory capacity, implementing trace contacts monitoring and supporting employer testing. The bill allocates additional funding to governmental agencies (including the Centers for Disease Control and Prevention, the National Institutes of Health, and the Food and Drug Administration) and tribal health organizations to support activities necessary to accelerate COVID-19 testing. The Act also requires HHS to issue a report, within 180 days of the Act’s enactment, on the number of positive COVID-19 cases, including hospitalizations and deaths, categorized by race, ethnicity, sex, geographic region and other relevant factors.
Strategic Planning to Assist in Testing. The Act requires states to form a strategy for increasing COVID-19 testing capacity. Within 30 days of the Act’s enactment, states, localities, territories and tribes receiving funds from the Act will need to submit their plans and specific goals for COVID-19 testing, including but not limited to: (i) the number of tests (e.g., diagnostic, serological, etc.) needed on a monthly basis; (ii) month-by-month estimates of laboratory and testing capacity, which includes capacities related to workforce, equipment and supplies, and overall availability; and (iii) a description of how the state will use its resources for testing and mitigation policies related to the pandemic.
How Does the Act Change the Paycheck Protection Program?
The Act provides $310 billion to replenish the Paycheck Protection Program (PPP), which is the new initiative that provides forgivable loans to small businesses devastated by the pandemic. Congress had allotted an initial $349 billion for the PPP in the CARES Act, which was enacted on March 27, only to see those funds depleted shortly afterward.
What Should Employers Do Next?
While many of these provisions are relevant only to states and healthcare providers, employers and plan sponsors should continue to monitor information and claims expense relevant to the cost of dealing with COVID-19 to ensure that they are seeking the appropriate level of relief funding from the government, and should keep written records of all relief money received under this Act, the CARES Act, and prior pandemic relief packages.