The Law of Tax-Exempt Healthcare Organizations. Bruce R. Hopkins

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Название The Law of Tax-Exempt Healthcare Organizations
Автор произведения Bruce R. Hopkins
Жанр Экономика
Серия
Издательство Экономика
Год выпуска 0
isbn 9781119763338



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Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress with bipartisan support and signed into law on March 27, 2020.57 The $2.2 trillion relief package was designed to provide emergency assistance and healthcare response for individuals, families, and businesses affected by the 2020 coronavirus pandemic. The CARES Act is the largest economic stimulus package in U.S. history.

      The CARES Act authorized emergency loans to distressed businesses, provided funding for forgivable bridge loans under a Paycheck Protection Program, provided stimulus funding in the form of $1,200 Economic Impact Payments (as direct payments or tax credits) to individuals, with additional $500 payments per qualifying child, and established special rules for certain tax‐favored withdrawals from retirement plans. The Act also delayed due dates for employer payroll taxes and estimated tax payments for corporations, and revised other provisions of the Internal Revenue Code including those related to losses, charitable deductions, and business interest.

      Regarding health care, the CARES Act provided funding for the prevention, diagnosis, and treatment of COVID‐19; limited liability for certain volunteer healthcare professionals; prioritized the review of certain drugs by the Food and Drug Administration; permitted the emergency use of certain diagnostic tests not previously approved by the FDA; increased health‐insurance coverage for diagnostic testing and required coverage for certain preventive services and vaccines; and addressed other critical healthcare needs in responding to the pandemic including through the medical supply chain, the national stockpile of healthcare equipment and supplies, the healthcare workforce, telehealth services, and Medicare and Medicaid.

      Economic Recovery Loans

      Among the most noteworthy features of the CARES Act was the establishment of a series of economic recovery loans. The Small Business Administration (SBA) received funding and authority through the Act to modify existing loan programs and to establish new loan programs to assist small businesses that were adversely impacted by the COVID‐19 pandemic. This included the provision of up to $500 billion for a Main Street Lending Program to provide financial assistance to eligible businesses, states, and municipalities. The Act also expanded the Economic Injury Disaster Loan (EIDL) program, administered by the SBA, which enables low‐interest loans that are available to most nonprofit, tax‐exempt organizations. Under the program, an unsecured EIDL loan can be obtained for up to $25,000, while a secured EIDL loan may be obtained for up to $2 million.

      However, the loan program that received the most public attention was a $350 billion small business loan program administered by the SBA intended to enable employers to keep their workforce employed during the COVID‐19 crisis during the early days of the pandemic (from February 15 through August 8, 2020). Under a new Paycheck Protection Program (PPP), the CARES Act temporarily permitted the SBA to guarantee 100 percent of certain loans. The loans were low interest at a 1 percent fixed rate annually, repayable over a two‐year period. The PPP also provides for forgiveness of up to the full principal amount of qualifying loans. In May 2020, Congress provided an additional $320 billion in funding for PPP loans.

      Under the PPP, businesses with no more than 500 employees were eligible to receive loans of up to $10 million. Similar small business loans were available from the SBA prior to the CARES Act, but nonprofit organizations were not eligible for them. The loan amounts are fully forgivable provided that the loan proceeds are used to cover payroll costs, mortgage interest, rent, and utility costs over an eight‐week period after the loan is made and employee and compensation levels are maintained.

      In most cases, hospitals are among the largest employers in their communities and would not be eligible for such loans. However, smaller rural hospitals (particularly critical access hospitals), as well as development foundations that support them, and healthcare associations commonly have fewer than 500 employees and many took advantage of this opportunity.