COVID-19 Federal Government Updates

LGN FEDERAL CORONAVIRUS UPDATE 3/26

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Late Wednesday night, the Senate passed a $2 trillion dollar coronavirus relief package titled the CARES Act. The bill provides additional funds to America’s health systems, a number of financial tools to private businesses, as well as direct financial assistance to most Americans. The House is expected to approve the bill tomorrow (March 27).

Below, find a summary of the two major portions of the bill: Division A, which largely deals with the health care system and economic stabilization efforts; and Division B, which provides $340 billion in emergency appropriations to government agencies.

DIVISION A

SMALL BUSINESS PROVISIONS

Increases the government guarantee of loans made for the Payment Protection Program to 100 percent through December 31, 2020.

Specifies allowable uses of the loan include payroll support, such as employee salaries, paid sick or medical leave, insurance premiums, and mortgage, rent, and utility payments.

Authorizes Small Business Administration to provide additional financial awards to resource partners (Small Business Development Centers and Women’s Business Centers) to provide counseling, training, and education on SBA resources and business resiliency to small business owners affected by COVID-19.

This section appropriates funds for the following uses:
• $349 billion for loan guarantees
• $675 million for Small Business Administration salaries and expenses
• $25 million for the Office of Inspector General
• $240 million for small business development centers and women’s business centers for technical assistance for businesses
• $25 million for resource partner associations to provide online information and training
• $10 million for minority business centers for technical assistance
• $10 billion for emergency EIDL grants
• $17 billion for loan subsidies
• $25 million for Department of Treasury salaries and expenses
• $100 billion for secondary market guarantee sales.

ASSISTANCE TO AMERICAN FAMILIES

Creates a temporary Pandemic Unemployment Assistance program through December 31, 2020 to provide payment to those not traditionally eligible for unemployment benefits (self-employed, independent contractors, those with limited work history, and others) who are unable to work as a direct result of the coronavirus public health emergency.

Provides an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months.

All U.S. residents with adjusted gross income up to $75,000 ($150,000 for married couples) are eligible for the full $1,200 ($2,400 if married) rebate. In addition, they are eligible for an additional $500 per child. This will be done using 2019 tax returns if already filed; otherwise, 2018 tax returns will be used.

Provides a refundable Employee Retention payroll tax credit for 50 percent of wages paid by employers to employees during the COVID-19 crisis.

ADDRESSING MEDICAL SUPPLY SHORTAGES

Clarifies that the Strategic National Stockpile can stockpile medical supplies, such as the swabs necessary for diagnostic testing for COVID-19.

Requires the Food and Drug Administration (FDA) to prioritize and expedite the review of drug applications and inspections to prevent or mitigate a drug shortage.

Clarifies that all testing for COVID-19 is to be covered by private insurance plans without cost sharing, including those tests without an EUA by the FDA. For COVID-19 testing covered with no cost to patients, requires an insurer to pay either the rate specified in a contract between the provider and the insurer, or, if there is no contract, a cash price posted by the provider.

Allows the Biomedical Advanced Research and Development Authority (BARDA) to more easily partner with private sector on research and development, which includes helping to scale up manufacturing as appropriate, by removing the cap on other transaction authority (OTA) during a public health emergency.

EDUCATION

Waives the institutional matching requirement for campus-based aid programs. Allows institutions to transfer unused work-study funds to be used for supplemental grants.

Allows institutions to issue work-study payments to students who are unable to work due to work-place closures as a lump sum or in payments similar to paychecks.

Exclusion from Federal Pell Grant Duration Limit for students who dropped out of school as a result of COVID -19.

Requires the Secretary to defer student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans.

Provides local workforce boards with additional flexibility to use funds received under the Workforce Innovation and Opportunity Act for administrative costs, including for online resources.

LABOR

Provides that applications for unemployment compensation and assistance with the application process, to the extent practicable, be accessible in two ways: in person, by phone, or online.

Allows an employee who was laid off by an employer March 1, 2020, or later to have access to paid family and medical leave in certain instances if they are rehired by the employer.

Amends Section 518 of ERISA to provide the Department of Labor the ability to postpone certain ERISA filing deadlines for a period of up to one year in the case of a public health emergency.

Provides single employer pension plan companies with more time to meet their funding obligations by delaying the due date for any contribution otherwise due during 2020 until January 1, 2021.

MEDICARE, MEDICAID, AND PUBLIC HEALTH

Extends the Medicaid Money Follows the Person demonstration that helps patients transition from the nursing home to the home setting through November 30, 2020.

Delays scheduled reductions in Medicaid disproportionate share hospital payments through November 30, 2020.

Extends the Medicaid Community Mental Health Services demonstration that provides coordinated care to patients with mental health and substance use disorders, through November 30, 2020.

Extends mandatory funding for community health centers, the National Health Service Corps, and the Teaching Health Center Graduate Medical Education Program at current levels through November 30, 2020.

Extends mandatory funding for the Special Diabetes Program for Type I Diabetes and the Special Diabetes Program for Indians at current levels through November 30, 2020.

Provides $1.32 billion in supplemental funding to community health centers on the front lines of testing and treating patients for COVID-19.

ECONOMIC STABILIZATION

Provides $500 billion to Treasury’s Exchange Stabilization Fund to provide loans, loan guarantees, and other investments, distributed as follows:

• $25 billion for passenger air carriers
• $4 billion for cargo air carriers
• $17 billion for businesses important to maintaining national security
• $454 billion for loans, loan guarantees, and investments in support of the Federal Reserve’s lending facilities to eligible businesses, states, and municipalities

Waives for a two-year period the requirement for a separate act of Congress to authorize certain projects exceeding $50 million and the requirement that any amounts unused in the Defense Production Act Fund at the end of the fiscal year that exceed $750 million be swept and returned to the Treasury’s General Fund.

Prohibits foreclosures on all federally-backed mortgage loans for a 60-day period beginning on March 18, 2020. Provides up to 180 days of forbearance for borrowers of a federally-backed mortgage loan who have experienced a financial hardship related to the COVID-19 emergency.

For 120 days beginning on the date of enactment, landlords are prohibited from initiating legal action to evict the tenant related to such nonpayment of rent where the landlord’s mortgage on that property is federally assisted.

CORONAVIRUS RELIEF FUND

Provides $150 billion to States, Territories, and Tribal governments to use for expenditures incurred due to the public health emergency with respect to COVID-19 in the face of revenue declines, allocated by population proportions, with a minimum of $1.25 billion for states with relatively small populations.

Within a state, only “units of local governments” with populations that exceed 500,000 are eligible to receive direct funding from the federal government as a portion of the state’s allocation.

DIVISION B – EMERGENCY APPROPRIATIONS

AGRICULTURE

Provides $9.5 billion in emergency COVID-19 response funding to support agricultural producers impacted by COVID-19, including producers of specialty crops, producers that supply local food systems, and livestock producers.

Provides $8.8 billion for Child Nutrition Programs and $15.5 billion for SNAP to cover new waiver authorities and anticipated increases in participation as a result of coronavirus.

Provides $450 million in additional funding for the Emergency Food Assistance Program for commodities and distribution of emergency food assistance through community partners, including food banks.

HOMELAND SECURITY

$178 million for necessary personal protection equipment for Department personnel including gloves, garments, goggles, hand sanitizer, respirators, and surgical masks for six months.

$100 million for increased cleaning and sanitization at TSA operations at airports and other facilities, overtime and travel costs required to maintain operations while infected employees are quarantined, and additional explosive detection materials that must be disposed of after a single use to prevent the spread of coronavirus.

$45.4 billion to FEMA, including $45 billion to continue FEMA’s entire suite of response and recovery activities and reimbursements provided to states and localities nationwide by the Disaster Relief Fund for emergency and major disaster declarations, as well as funding for FEMA facilities and information technology required to support FEMA’s lead role in coordinating federal response activities.

The bill also includes $400 million for FEMA grants that can be disbursed in a timely manner for firefighters, emergency managers, and providers of emergency food and shelter.

PUBLIC HEALTH AND SOCIAL SERVICES EMERGENCY FUND

Reimbursement to Hospitals & Healthcare Providers: $100 billion to ensure healthcare providers continue to receive the support they need for COVID-19 related expenses and lost revenue.

Strategic National Stockpile: $16 billion to procure personal protective equipment, ventilators, and other medical supplies for federal and state response efforts.

Vaccine, Therapeutics, Diagnostics, and other Medical or Preparedness Needs: $11 billion, including at least $3.5 billion to advance construction, manufacturing, and purchase of vaccines and therapeutic delivery to the American people.

Hospital Preparedness: Not less than $250 million to improve the capacity of healthcare facilities to respond to medical events.

Health Resources and Services Administration: $275 million to expand services and capacity for rural hospitals, telehealth, poison control centers, and the Ryan White HIV/AIDS program. Language is also included to allow Community Health Centers to use FY2020 funding to maintain or increase staffing and capacity to address the coronavirus.

CENTERS FOR DISEASE CONTROL AND PREVENTION

State and Local Preparedness Grants: $1.5 billion in designated funding for state and local preparedness and response activities.

Global Health Security: $500 million to continue CDC’s global health efforts that are critical to the health and security of the United States.

Public Health Data Surveillance and Infrastructure Modernization: $500 million to invest in better COVID19 tools and build state and local public health data infrastructure.

Infectious Disease Fund: $300 million to give HHS flexibility to respond to pandemic threats.

OTHER HEALTH AND HUMAN SERVICES AGENCIES

$945.5 million for the National Institutes of Health for vaccine, therapeutic, and diagnostic research to increase our understanding of COVID-19, including underlying risks to cardiovascular and pulmonary conditions.

$425 million for the Substance Abuse and Mental Health Services Administration to address mental health and substance use disorders as a result of the coronavirus pandemic, including $250 million for Community Behavioral Health Clinics, $50 million for suicide prevention, and $100 million for SAMHSA Emergency Response Grants.

$200 million for the Centers for Medicare and Medicaid Services, including $100 million to support additional infection control surveys for facilities with populations vulnerable to severe illness from coronavirus.

EDUCATION

Elementary and Secondary Education: $13.5 billion in formula funding directly to states, to help schools respond to coronavirus and related school closures, meet the immediate needs of students and teachers, improve the use of education technology, support distance education, and make up for lost learning time.

Higher Education: $14.25 billion in funding to institutions of higher education to directly support students facing urgent needs related to coronavirus, and to support institutions as they cope with the immediate effects of coronavirus and school closures. This provides targeted formula funding to institutions of higher education, as well as funding for minority serving institutions and HBCUs.

State Flexibility Funding: $3 billion in flexible formula funding to be allocated by states based on the needs of their elementary and secondary schools and their institutions of higher education.

TRANSPORTATION

Federal Aviation Administration, Airport Improvement Program (AIP) – $10 billion to maintain operations at our nation’s airports that are facing a record drop in passengers. AIP funds will be distributed by formula.

Essential Air Service (EAS) – $56 million provided to maintain existing air service to rural communities. This funding is necessary to offset the reduction in overflight fees that help pay for the EAS program.

Federal Highway Administration – Language to clarify that states can issue special permits for overweight vehicles and loads to allow for the free flow of critical relief supplies during the current coronavirus epidemic for the duration of the fiscal year.

Federal Transit Administration (FTA), Transit Infrastructure Grants – $25 billion for transit providers, including states and local governments across the country, for operating and capital expenses. Funding will be distributed using existing FTA formulas.

HOUSING AND URBAN DEVELOPMENT

Community Development Block Grant (CDBG) – $5 billion. CDBG is a flexible program that provides communities and states with funding to provide a wide range of resources to address COVID-19, such as services for senior citizens, the homeless, and public health services. Funding will be distributed using formula.

Homeless Assistance Grants – $4 billion. These funds will enable state and local governments to address coronavirus among the homeless population. These grants, in combination with additional waiver authority, will provide effective, targeted assistance to contain the spread of coronavirus among homeless individuals. These grants will also provide state and local governments with homelessness prevention funding for individuals and families who would otherwise become homeless due to coronavirus.

Tenant-Based Rental Assistance – $1.25 billion. These funds will preserve Section 8 voucher rental assistance for seniors, the disabled, and low-income working families, who will experience loss of income from the coronavirus.

Public Housing Operating Fund – $685 million. These funds will provide Public Housing Agencies with additional operating assistance to make up for reduced tenant rent payments, as well as to help contain the spread of coronavirus in public housing properties.

Section 202 Housing for the Elderly – $50 million. These funds will maintain housing stability and services for low-income seniors. Seniors are particularly at risk from the coronavirus.

Section 811 Housing for Persons with Disabilities – $15 million. This additional funding will make up for reduced tenant payments as a result of coronavirus.

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COVID-19 Federal Government Updates

LGN FEDERAL CORONAVIRUS UPDATE

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Senate Looks to Approve Coronavirus Bill This Week
The Senate this week will consider an economic relief plan, backed by President Trump, to deal with the spreading coronavirus. The House-passed package includes free testing for everyone who needs it, and two weeks of paid sick leave to allow people with the virus to stay home from work and avoid infecting co-workers. It also includes enhanced jobless benefits, increased food aid for children, senior citizens and food banks, and higher funding for Medicaid benefits. Speaker Nancy Pelosi said that while the Senate works on the House bill, her chamber’s leaders will begin working on an additional emergency response measure.

Senate Majority Leader Mitch McConnell said in a statement shortly after Saturday’s House vote that the Senate “will need to carefully review” the House measure. “I believe the vast majority of senators in both parties will agree we should act swiftly to secure relief for American workers, families, and small businesses,” he said. Leader McConnell said in a statement Sunday night that more work would likely be needed, and that he has talked to Senate committee heads about next steps. The Senate Health, Education, Labor, and Pensions Committee will hold a second hearing tomorrow on the U.S. response to the outbreak. The exact timing of a Senate vote this week is still uncertain.

A Closer Look: Families First Coronavirus Response Act
On Saturday, March 14, the House passed a sweeping bill aimed at addressing the Coronavirus outbreak. The Families First Coronavirus Response Act was passed on a vote of 363-40 and would provide $8.3 billion for relief efforts. All members of Minnesota’s congressional delegation voted in favor of the bill, with the exception of Congressman Tom Emmer (R-MN-06) who cited the “abrupt and haphazard” actions of the House in a press release explaining his vote. A number of highlights from the bill can be found below:

  • More than $3 billion for research and development of vaccines, therapeutics, and diagnostics.
  • Nearly $1 billion for procurement of pharmaceuticals and medical supplies, to support healthcare preparedness and Community Health Centers, and to improve medical surge capacity.
  • An estimated $7 billion in low-interest loans to affected small businesses, to help cushion the economic blow of the public health emergency.
  • $300 million so the government can purchase vaccines at a fair and reasonable price.
  • The measure would appropriate $250 million for Health and Human Services Department programs that aid elderly Americans.
  • States would be eligible for a 6.2 percentage point increase in their federal medical assistance percentages.
  • Insurers would be required to cover coronavirus tests and related services, such as provider visits for testing, without cost-sharing or prior authorization requirements.
    > The cost-sharing prohibition would also apply to Medicaid, Medicare, TRICARE, veterans’ health programs, the Indian Health Service, and coverage provided to federal civilian employees.
  • Supplemental funds for federal nutrition assistance programs:
    > $500 million in emergency funding for the WIC program.
    > $400 million for the Commodity Assistance Program for the emergency food assistance program, $100 million of which could be used for costs related to the distribution of goods.
  • The measure would waive federal work requirements for SNAP eligibility.
    > States that make their own emergency or disaster declarations related to COVID-19 could request emergency allotments of food aid to support increased participation in SNAP and address temporary food needs.
  • The agreement would create an emergency paid leave program to directly respond to the coronavirus.
    > Private sector employers with fewer than 500 workers and government entities would have to provide as many as 12 weeks of job-protected leave.
    > Full-time employees would receive 80 hours of sick leave under the new emergency leave program and part-time workers would be granted time off that’s equivalent to their scheduled or normal work hours in a two-week period.
    > Small businesses with fewer than 50 employees would be exempt through authorized Labor Department regulations.
  • The measure would provide payroll tax credits to employers to cover wages paid to employees while they are taking time off under the bill’s sick leave and family leave programs.
  • The measure would provide as much as $1 billion for emergency transfers to states in fiscal 2020 to process and pay unemployment benefits.

Local Government Impacts
• The bill would ensure that state and local governments are reimbursed for costs incurred while assisting the federal response.

  • It would also include a requirement to reimburse $136 million to important health accounts, including mental health services, substance abuse treatment and prevention, and heating and cooling assistance for low-income families.
  • $25 million cooperative agreement to the states and local jurisdictions who have borne the largest burden of response and preparedness activities to date.
  • $10 million cooperative agreement to state and local jurisdictions to begin implementation of coronavirus surveillance across the U.S., building on existing influenza activities and other surveillance systems.
  • For more information on local government provisions of the bill, see theNational League of Cities Response Resourcespage.

White House Aide Warns Spike in Virus Cases Coming
Expanding testing for the coronavirus in the U.S. will result in a “spike in the curve” over the next week as more cases are uncovered, a top White House aide said. “For those of you who watched China, and China reporting, remember when they changed their definition and all of a sudden there was a blip in their curve? We are going to see that,” Dr. Deborah Birx, virus response coordinator, said at a weekend briefing by the White House coronavirus task force.

At least ten states now have the availability of drive-by testing for the coronavirus as tests ramp up nationwide after a slow start, said Vice President Mike Pence. It is important, as testing capacity increases, that the people “most in need” have priority access, the Vice President said. That would include first responders and health care workers. He also urged people who are symptom-free to not seek testing.

Fed Slashes Rates as U.S. Economy Braces for Virus
The Federal Reserve swept into action on Sunday in an effort to save the U.S. economy from the fallout of the coronavirus, slashing its benchmark interest rate by a full percentage point to near zero and promising to boost its bond holdings by at least $700 billion. Underlining the sense of urgency amid mounting recession fears, Fed Chairman Jerome Powell told a press briefing by telephone that the virus’s disruption to lives and businesses meant second quarter growth would probably be weak and it was hard to know how long the pain would last.

The Fed pulled out some of the biggest weapons in its arsenal. Its key rate is now zero to 0.25%, matching the record low level it hit during the 2008 financial crisis and where it was held until December 2015. The central bank also announced several other actions, including letting banks borrow from the discount window for as long as 90 days and reducing reserve requirement ratios to zero percent. In addition, it united with five other central banks to ensure dollars are available around the world via swap lines. Chairman Powell said that he did not think negative rates, which have been used in Europe and Japan, would be appropriate policy in the U.S.

IRS Expected to Delay Tax-Filing Deadline
The IRS and Treasury Department have not yet updated tax professionals and taxpayers about a possible change to the annual income tax filing deadline of April 15. The IRS is widely expected to announce an extended date for the deadline on Monday, March 16.

CDC Urges Scrapping Mass Gatherings For Eight Weeks
In the most extreme effort yet to slow the march of coronavirus in the U.S., the Centers for Disease Control and Prevention recommended that events of 50 people or more not be held for about two months. For the next eight weeks, organizers should cancel or postpone in-person events of that size throughout the U.S., the agency said on its website Sunday. When feasible, organizers could modify events to be virtual. “This recommendation is made in an attempt to reduce introduction of the virus into new communities and to slow the spread of infection in communities already affected by the virus,” the CDC said.

The advisory doesn’t apply to the day-to-day operation of organizations such as schools, institutes of higher learning, or businesses — although many of those entities have taken steps of their own. Instead, events such as conferences, festivals, parades, concerts, sporting events, weddings, and other types of assemblies should be avoided, the CDC said. U.S. authorities are focusing on “flattening the curve” of the COVID-19 virus’s spread to prevent hospitals and other health care facilities from becoming overwhelmed.

Minnesota Delegation Members to Host Monday Evening Coronavirus Briefing Calls
Senator Tina Smith (D-MN) and Congressman Dean Phillips (D-MN-03) will host an open-to-the-public briefing call on COVID-19 at 6:00 PM CST on Monday, March 16. Details on the call, including the dial-in number and a link to submit questions, can be found here. In addition to Senator Smith and Congressman Phillips, the call will feature Rob Thomas, Medical Director for the Emergency Physicians Professional Association; Penny Wheeler, CEO of the Allina Health System; and Kelly Searle, an Epidemiologist at the University of Minnesota.

Additionally, Congresswoman Angie Craig (D-MN-02) will be hosting an education-focused briefing call tonight at 7:00 PM CST. Congresswoman Craig will be joined by local education and public health officials. Call-in information and a link for question submissions can be found here.