How the CARES Act is Helping Businesses and HAP Members

The Coronavirus Aid, Relief and Economic Security (CARES) Act was recently signed into law by President Trump. The $2.2 trillion package was expeditiously drafted, amended and approved by Congress in response to the COVID-19 pandemic that has significantly disrupted the U.S. economy and health care systems.

The stimulus package is aimed at helping individuals and families, employers, health care providers and state and local governments during these difficult times. To read the full text of the CARES Act, click here.

Below are some provisions of the CARES Act that aim to support individuals, families and small businesses, as well as some health insurance coverage-related provisions.

Resources for Small Businesses:

The CARES Act appropriates $349 billion for small business loans. The Paycheck Protection Program incentivizes small business employers to retain employees and certain other expenses during the COVID19 pandemic.

Small businesses and eligible nonprofit organizations, veterans’ organizations, and tribal businesses described in the Small Business Act, as well as individuals who are self-employed or independent contractors with less than 500 employees may be eligible.

The U.S. Small Business Administration (SBA) will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll (including benefits), rent, mortgage interest or utilities. The program is available through June 30, 2020. To learn more about the Paycheck Protection Program, click here.

Also, in response to the COVID-19 pandemic, small business owners are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000.

The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. Funds will be made available within three days of a successful application, and the loan advance will not have to be repaid.

To apply for a COVID-19 Economic Injury Disaster Loan through the SBA, click here.

Resources for Individuals and Families:

The CARES Act also provides direct payments to eligible individuals and families. The Economic Impact Payments could be up to $1,200 per individual and $2,400 for joint filers, plus $500 for each eligible child. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the thresholds.

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an Economic Impact Payment. For more information on Economic Impact Payments, click here.

The CARES Act also expands unemployment benefits. Under the Act, unemployment benefits are expanded to include self-employed, 1099-independent contractors, and low-wage workers. Weekly unemployment pay has also been boosted under the CARES Act.

Michigan’s Unemployment Insurance Agency will release updated guidance regarding eligibility and the application process in the coming days. To apply for unemployment, click here.

Insurance-related Provisions:

The CARES Act also makes certain changes to health insurance coverage, including:

  • Clarification that health plans must cover and waive cost-sharing and prior authorization for COVID-19 testing and test-related items and services provided during provider visits, urgent care visits, and emergency room visits that result in an order of a COVID-19 test.
  • HSA-qualified health plans can now cover telehealth and other remote care service expenses below the HDHP statutory deductible limit, or at no or low-cost sharing, without affecting an account holder’s ability to continue contributing to their HSA. This provision will last until December 31, 2021.
  • Over-the-counter drugs and medicines can be paid for or reimbursed through an FSA, HRA or HSA without a doctor’s prescription.
  • Menstrual care products are now considered a qualified medical expense and are eligible for payment or reimbursement through an FSA, HRA or HSA. All expenses incurred after December 31, 2019 qualify, and the provision has no expiration date.
  • Increases Medicare telehealth flexibilities during the COVID-19 emergency period by removing a requirement that a beneficiary have a prior relationship with a provider during the previous three years.
  • Enhances Medicare telehealth services by paying for telehealth services furnished by Federally Qualified Health Centers or Rural Health Clinics during the emergency period.
  • Requires that Medicare prescription drug plans or Medicare Advantage Prescription Drug plans provide up to a 90-day supply of a prescription medication if requested by a beneficiary during the COVID-19 emergency period.

The information contained in this summary is based on our current understanding of various legislative and regulatory issues and is subject to change based upon additional interpretation, regulatory guidance and/or changes to the law. This summary is intended for general information purposes only and is not intended to provide legal and/or financial planning advice on any specific facts and circumstances.

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