As part of an ongoing effort by the IRS to provide employers and employees with flexibility during the COVID-19 pandemic, the IRS recently issued notices 2020-29 and 2020-33, providing relief with respect to “cafeteria plans,” health flexible spending accounts (Health FSAs), dependent care assistance programs (DCAPs), and high deductible health plans (HDHPs). The relief applies to all employees who are eligible to participate in such plans, regardless of whether they are actually affected by COVID-19. Below is a summary of key aspects of the guidance and practical issues to consider.
As the COVID-19 pandemic continues to affect the worldwide economy, reports out of the United Kingdom highlight a significant increase in cybersecurity attacks on maritime industry stakeholders since February 2020. According to The Maritime Executive article “Report: Maritime Cyberattacks Have Quadrupled Since February,” The British Ports Association and a UK-based risk management firm issued a new study addressing the recent uptick in cyber-security attacks and noted that this rise in attacks could be attributable to “new remote-work alternatives” that are being implemented in response to “Stay Home” orders. The article and whitepaper emphasize the importance of maintaining good “cyber hygiene” and recognizing that the ongoing COVID-19 pandemic presents an opportunity for cyber-criminals to exploit vulnerabilities in industry stakeholders’ processes and systems.
In April, President Donald Trump imposed a 60-day ban on permanent resident cards issued abroad. The ban was supposed to expire on June 22. On that day, he signed an executive order that (1) extended this ban through the end of 2020 and (2) now restricts foreign nationals from outside the United States from using certain temporary employment-based visas through the end of the year. This order took effect June 24 and could have a significant impact on your business operations.
The ongoing coronavirus pandemic has pushed telehealth and mHealth to center stage as healthcare providers of all sizes look to provide care on virtual platforms. But the emergency – and the legislative and policy measures enacted to deal with it – won’t last forever. Nadia de la Houssaye contributed to a mHeathIntelligence roundup of experts discussing “Post-COVID-19 Telehealth Rules and Policies.” Click here to read more.
Recent congressional action has included significant additional funding for healthcare providers. The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), the massive stimulus legislation passed on March 27, appropriated $100 billion to the Department of Health & Human Services (HHS) for the Public Health and Social Services Emergency Fund (the Relief Fund) to be distributed to hospitals and healthcare providers on the front lines of the COVID-19 response. This was followed on April 24 by an additional $75 billion appropriated for healthcare providers under the Paycheck Protection Program and the Health Care Enhancement Act. In addition, the CARES Act expanded the existing Medicare accelerated and advance payment programs (AAP Programs) to allow qualified hospitals and other providers to obtain, as a lump sum or in periodic payments, up to six months of advance Medicare payments (based on prior-period experience) as a loan to stabilize cash flow.
So, what has actually happened with this new funding in the ensuing weeks? The following sections summarize what we know so far.
On June 15, 2020, the Federal Reserve Bank of Boston (FRBB) announced that the Main Street Lending Program (MSLP) is now open for lender registration and encouraged eligible lenders to start making MSLP loans “immediately.” The MSLP is not yet fully operational, as the Federal Reserve’s special purpose vehicle (Main Street SPV) is not ready to purchase participations from lenders under the program; however, it is anticipated that the FRBB will open its loan intake portal in the coming days.
Accordingly, eligible lenders that propose to make loans under one or more of the MSLP facilities (the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF)) should now register for the MSLP in order to avoid delay in their participation in loans to the Main Street SPV once the loan intake portal opens. A link to the FRBB’s lender registration page is here.
As businesses attempt to navigate the post-COVID-19 landscape, one issue of concern is the possibility of claims for alleged COVID-19 exposure being brought by both customers and employees. These concerns have been complicated by the often conflicting guidance or requirements being placed on businesses from local, state, and federal governments or agencies. While there is ongoing discussion at the federal level of legislation to provide some liability protections for businesses in certain circumstances, several states are stepping into the void and enacting legislation of their own. Louisiana has now followed Oklahoma, North Carolina, and several other states in enacting legislation that grants liability protections for businesses from these type of claims.
On June 5, President Trump signed the Paycheck Protection Program Flexibility Act of 2020 (the Flexibility Act). The act revised, in certain important respects, elements of the Paycheck Protection Program (PPP) that had appeared in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as supplemented by a series of interim final rules and FAQs published by the Small Business Administration (SBA). Below is a summary of the changes.
On June 8, 2020, the Federal Reserve Board (Federal Reserve or FRB) announced a number of changes to the terms and conditions for three Main Street Lending Program (MSLP) facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF). The Federal Reserve anticipates lender registration to be open in the coming days.
In response to feedback received from industry groups and others, the Federal Reserve made the following changes to the MSLP, which will make the program available to more small and medium-sized businesses:
- Reducing the minimum loan size for the MSNLF and MSPLF from $500,000 to $250,000
- Increasing the maximum loan size for all facilities
- Increasing the term of each loan option from four to five years
- Deferring the initial principal payments for two years, rather than one
- Reducing the lenders’ risk retention in the MSPLF from 15% to 5%; as a result, the MSLP special purpose vehicle will purchase a 95% participation in qualifying loans under all three facilities
On May 27, 2020, the Federal Reserve Bank of Boston (FRBB) released the legal forms and agreements for eligible borrowers and eligible lenders to participate in the Main Street Lending Program (MSLP). The FRBB also published updated Frequently Asked Questions (FAQs), which include numerous new questions and answers regarding eligibility, loan terms and conditions, borrower certifications and covenants, regulatory requirements and reporting, and other issues.
On April 30, 2020, the Federal Reserve Board (Federal Reserve) had issued the terms and conditions for three MSLP facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF). Copies of all documents can be found on the FRBB’s Main Street Lending Program Forms and Agreements webpage.
In the May 27 release, the term sheets for the three MSLP facilities were not amended from the forms released on April 30, and the definitions of “Eligible Borrower” and “Eligible Lender” remain unchanged. An overview and summary of the previously issued term sheets, including eligible borrower and eligible lender requirements, can be found here. A list of covenants and commitments required to be made by eligible borrowers and lenders — including compliance with the CARES Act’s compensation, stock repurchase, and capital distribution restrictions — is also detailed.
Although the MSLP has not yet been launched, the documents, checklists, and revised guidance issued on May 27 appear to be final, subject to future Federal Reserve interpretation and refinement. Accordingly, eligible borrowers and eligible lenders should review the available guidance and documentation, and address potential issues surrounding the facilities’ terms and conditions with their counsel now. We expect that the Federal Reserve and FRBB will announce the program start date in the coming days.