By Tim Fitzgerald on Apr 17, 2020 2:00:00 PM
On March 27, 2020, the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. Creating a $2.2 trillion dollar lifeline for American businesses, the CARES Act will help a lot of businesses to stay on their feet during COVID-19, but, what does this mean for you and your business as a health insurance broker? Whether you own your own business, are part of a small brokerage, or you work for a national brokerage, you’re going to feel the effects of this pandemic. Here are three ways the CARES Act could affect your business.
The Paycheck Protection Program (PPP)
The CARES Act appropriates $349 billion for Small Business Administration (SBA) Section 7(a) loans. Businesses are generally eligible to receive Paycheck Protection Program (PPP) loans if they don’t employ more than 500 employees (or the maximum number of employees established by the SBA for specific industries). CARES Act loans provide more relaxed requirements for potential borrowers than traditional SBA loans. Brokerages who operate as a sole proprietorship, individual contractors, and certain self-employed individuals are also eligible for PPP loans. Loan amounts can be up to 250 percent of the business’ monthly payroll cost for the year leading up to the loan. These costs include things like salary, commission, healthcare benefits and premiums, local and state taxes, etc.
PPP Loans will be available until June 30, 2020. Check SBA.gov for more information on the eligibility of your business.
Individual Stimulus Payments
The CARES act will also be issuing individual stimulus payments to American taxpayers. The individual rebates account for approximately $290 billion of the CARES Act and will be issued to roughly 125 million taxpayers. These one-time payments are based on 2019 and 2018 tax returns. If you have not yet filed your 2019 tax return, payments are based on your 2018 adjusted gross income. To learn more about the payments and eligibility requirements, check here.
Expansion of Telehealth Services:
Another point of the CARES Act is to increase the availability of telehealth and other remote care. Telehealth services are expanding in Medicare and that includes services that are unrelated to COVID-19 treatments. The CARES Act is allocating $200 million to the Federal Communication commission to support expanding telehealth services. It is also bringing flexibility in the Medicare space for qualified providers to provide telehealth service to Medicare patients. Additionally, the CARES act is taking steps to enhance payment for telehealth services during the emergency period. With this increased emphasis on telehealth, keep in mind that it is a benefit that is going to become more important for your clients. Make sure you bring plan options to the table that offer telemedicine and teledentistry! To learn more about the telehealth portion of the CARES act, click here.
The CARES Act is a big deal for you and your business as an insurance broker. Not only is it is bringing big short-term financial change and opportunities during the COVID-19 pandemic, but it will also likely change things long-term with a new emphasis on telehealth services that will continue to increase in demand. So, make sure you understand the CARES Act, what it can do for your business and your clients, and how it’s going to affect the landscape of health insurance moving forward. If you want to learn more about the CARES Act in more detail, check out our infographic covering the 10 most important points below!