The top five takeaways from the Coronavirus Aid Relief and Economic Security Act (CARES Act), explained by James Venable Esq., SPHR and Sue Woods, Esq.
Sue: Welcome to our weekly podcast. I’m your host today, Sue Woods, senior compliance counsel at ReedGroup, a Guardian company. And joining me today is James Venable, the vice president of compliance and employment law for ReedGroup.
Our weekly podcast will bring you the latest developments related to COVID-19. This week we’ll share the top five takeaways from the Coronavirus Aid Relief and Economic Security Act, also known as the CARES Act, which was signed into law on March 27 of this year. The CARES Act is a very important bill. And I know our listeners will have a lot of questions about it, James.
You know, at over $2 trillion in cost, the CARES Act is the largest economic relief bill in US history. And it was created to provide financial relief for both individuals and companies who are impacted by the COVID-19 outbreak. James, what are the most important things about the CARES Act that we need to know?
James: Thanks, Sue. One, as you said, it’s $2 trillion. There’s a lot of money there. And so it’s been divvied up to kind of respond to different things to continue to keep the economy going.
And so the first thing that it’s really looking to do– and I think one of the most important things– is to care for individuals and families. So you want to know that as all US residents with an income of up to $75,000 will be eligible to receive a direct payment of $1,200. Joint tax filers with a combined income of $150,000 will be eligible for a payment of $2,400. Families with children will get an additional $500 payment per child. And so it does provide some financial support for families and individuals in need during this crisis.
Sue: Yeah, that’s great. I think a lot of people are really looking for some individual help during these tough times. And I think the first wave of those individual checks are starting to go out or have already gone out.
So hopefully, that’s going to help a lot of people who are affected by the COVID-19 pandemic. What about people though who’ve actually lost their jobs? Is there any additional coverage for them in this bill?
James: Absolutely, Sue. I think that’s the second most important feature of the CARES Act. Obviously, there’s going to be prolonged unemployment as a result of the shutdowns. Even as companies start to reopen, there’s no guarantee that they’re going to bring people– everyone back. And so there’s probably going to be a slow rollout of people returning to work.
So there is going to be some prolonged unemployment and also for those who are in that independent contractor. So it extends unemployment insurance coverage. It also covers furloughed employees, gig workers, and freelancers. Everyone will be eligible for an additional $600 per week for four months in addition to what their state program offers.
These benefits will be extended through December 31. Also, a quick note for everyone who didn’t get their taxes in before the usual April 15 deadline, the tax filing deadline for individuals has been extended to July 15, 2020 to file your 2019 tax returns. So if you weren’t one of these folks that rushed out and did your taxes or by the deadline April 15 deadline, you’ve got some time now to July 15 to get that done.
Sue: That’s really good news, James. So many people have been so preoccupied with the COVID-19 pandemic that it’s very possible that tax filings are some of the last things on people’s minds. So the extended deadline is certainly going to be welcome for folks as well as is the additional $600 in weekly unemployment benefits. I’m sure that’ll be very welcome as well. In addition to offering this help to individual people in the US, does the CARES Act also offer any sort of support for small businesses?
James: Absolutely. As everyone knows, small businesses provide the majority of jobs for people. So the third most important part of the CARES Act is relief for small business. And it provides $350 billion out of that $2 trillion budget. It’s been allotted to help small businesses stay open and prevent layoffs.
Businesses with 500 or fewer employees can receive eight weeks of cash flow assistance if they keep their employees on the payroll. Any portion of that loan used to cover payroll or other businesses expenses would be forgiven. Another thing that’s going that’s going to be helpful for small businesses besides the cash flow assistance, small businesses would also be eligible for emergency grants of up to $10,000 to cover immediate operating costs. So that’s going to help a lot of businesses who are having gaps right now in their cash flow.
The CARES Act also provides debt relief to small businesses who already have existing SBA loans. So if you’ve taken out a small business loan and because of what’s going on right now you’re not able to keep up your payments, the act is going to cover all loan payments for six months. And this relief will be available to small businesses that take out loans within six months of the president’s signing of the bill.
Sue: That’s really great, James. I’m sure these small businesses are really going to appreciate some of this relief. And I know from news reports, a lot of businesses have already applied for these loans.
So I think that’s going to be a really huge impact to our economy as a whole as well as individual small businesses who get approved for those loans. Hopefully more will continue to be available. And on the flip side from the small businesses, we wonder our large companies offered any sort of support or any sort of relief under the CARES Act?
James: Yes. Absolutely. I think one of the misconceptions that people have is that, well, these large companies can weather the storm, and they can get through this without being open and operating. However, that’s absolutely not true. We’re reading in the press every day that even some of the most large– the largest companies in this country are starting to have challenges with staying viable and staying open. So the CARES Act provides $500 billion to assist large corporations.
However, unlike some small businesses, large corporations will be required to repay those loans back to the government. There’s also going to be additional oversight by the government on how the company spend those funds. So big corporations won’t be able to take those funds and spend it on whatever they want to. There’s going to be some government oversight to ensure that those funds are properly allotted to maintain the business, take care of employees, and things of that nature, and not go into any other discretionary funds that the company might want to use that money for.
Sue: James, it’s so good to know that businesses of all sizes will have the opportunity to get some relief under the CARES Act. Are there any other provisions of the act that you think we need to know about that are going to help our economy and individuals in the country?
James: Yeah, absolutely, Sue. That’s the fifth thing that I wanted to share about the CARES Act. As you know, there’s been a real, not outcry, but a request for additional funding for the health care community, for hospitals and facilities. So the act provides $100 billion in additional financial support for hospitals and health care facilities responding to the coronavirus.
It also provides aid to local community health centers. It also provides aid for new drug development. That’s a biggest issue. You’ve got a lot of entities now rushing to try to come up with a vaccine, because as you– as everyone’s probably read, there’s a view that there may be a second outbreak in the fall this year. So people really are interested in providing resources to these research facilities to see if they can come up with a vaccine.
There’s also funding that will cover diagnostics. That’s also been an issue where there’s not enough testing available for people who either have the virus or people who want to see if they’ve– if they’ve if they’re carrying an antibody that suggests they had the virus, but they recovered from it. They’ll be funding. The funding will also cover treatments and vaccines and also veterans’ health care.
There’s also going to be funding for telehealth programs, as we discussed earlier. Doctors are not going to be available right away to see people. So they’re proposing allowing this funding to allow people to see their doctors via the internet or by webinar. That’s going to be very helpful for people to get in to see their doc. Even if they can’t see their doctor physically, they’ll be able to have these telehealth programs to assist them in getting some consultation from their doctors.
It’s also going to boost the supply of medical supplies, like mask and ventilators, which everyone knows is a hard thing to find. If you have to try to go out and find a mask and ventilator right now, it would be a very difficult thing for you to get your hands on. So this funding is hopefully hoping to increase the supply of those types of tools that people need to protect themselves from the virus. So bottom line is the overall purpose of this bill is really to keep business open keep businesses open, and keep the economy stabilized, and to provide support to hospitals and health care facilities that are fighting the virus on the ground and in the big cities where we’re seeing large numbers of cases.
It’s also to stabilize and minimize the loss of additional jobs. As you know, millions of Americans have been put out of work. And this is to help those Americans who have already been impacted.
Sue: Thank you so much, James. That was really interesting and important information for everyone to know. For those of you tuning in, we certainly thank you for joining us today. We hope you’ll find this information useful and that you’ll join us for our next podcast.
ReedGroup, a wholly owned subsidiary of The Guardian Life Insurance Company of America®. GUARDIAN ® is a registered trademark of The Guardian Life Insurance Company of America ®; ©Copyright 2020 The Guardian Life Insurance Company of America 2020-100054 (4/21)
Information provided on this podcast is intended for general educational use. It is not intended to provide legal advice. ReedGroup does not provide legal services. Consult an attorney for legal advice on this or any other topic.