SACRAMENTO, Calif. (AP) — The California Senate on Thursday rejected a bill aimed at making it easier for health care employees to have hospitals pay their medical bills related to COVID-19 and other diseases that may have been contracted on the job — a move business groups said would have cost them too much money.
Companies pay their workers’ medical bills if they get sick or injured while on the job. In some cases, workers must prove their injury or illness is work-related to get the benefits. Last year, the California Legislature passed a law that assumed COVID-19 was work-related, shifting the burden to employers to prove it wasn’t.
That law is scheduled to expire in 2023. A bill by Sen. Dave Cortese, a Democrat from San Jose, would have made it permanent. It would have also added other presumptions to the workers’ compensation law for hospital workers, including cancer under some circumstances, post traumatic stress disorder, certain respiratory diseases and muscle or ligament injuries.
The bill had to pass the Senate by Friday to have a chance at becoming law this year. But it fell short on Thursday before the Senate adjourned for the week. Lawmakers are not meeting Friday.
Cortese on Thursday agreed to change the bill to remove respiratory illnesses such as asthma and chronic obstructive pulmonary disease (COPD). But it wasn’t enough to get the bill passed.
Cortese said his goal was to give hospital workers, of whom he says 90% are women, the same protections as other medical professions, including emergency medical technicians.
“It really comes down to equal work, equal compensation,” he said.
Business groups, led by the California Chamber of Commerce, opposed the bill, labeling it a “job killer.”
“Such a drastic shift in the law will create an astronomical financial burden on healthcare employers and the system, creating an appreciable pact on the cost of healthcare at a time when we are trying to make healthcare more affordable,” Ashley Hoffman, policy advocate for the California Chamber of Commerce, wrote in a letter to lawmakers that was signed by 35 other groups.
The bill is part of a broader discussion in California about which coronavirus modifications should continue. Gov. Gavin Newsom said he will lift most of the state’s coronavirus rules on June 15.
The state Senate passed a bill earlier this week that would let restaurants continue to serve alcohol outside. The state Assembly passed a bill that would require local governments to keep letting people comment during their meetings by telephone or the internet. Both bills still must pass the other legislative chamber and be signed by the governor before becoming law.
Written by Adam Beam, Associated Press (June 3, 2021)
Moody’s opinion echos that of NCCI regarding the impact of COVID on the Workers’ Compensation system. More rate decreases to come???
Neither COVID-19 nor legislation enacted because of it has seriously harmed the creditworthiness of the property and casualty insurance sector, according to a report released by Moody’s Investors Service on Friday.
Businesses have filed about 1,700 business-interruption claims because of COVID-19 shutdowns, but those cases are largely being decided in favor of insurers, Moody’s said.
“US property policies typically require direct physical loss or damage to the property for business interruption losses to be compensated,” Moody’s said. “Moreover, most policies specifically exclude coverage for losses caused by a virus or communicable disease.”
But the battle for coverage, of course, is far from over. Only 20% of the cases filed have been resolved so far.
“A handful of courts have recently ruled in favor of insured parties despite standard policy wordings,” the report says. “Additionally, court decisions are subject to appeal, a process that could take years to resolve.”
Moody’s says it believes that ultimately, policy provisions will limit insurers’ business-interruption losses is the United States.
“Nevertheless, we expect the ongoing litigation will lead to inconsistent outcomes, appeals to higher courts, elevated legal costs, and some uncertainty on this matter for the next couple of years,” the report says.
For workers’ compensation, which makes up 14% of commercial line P&C premiums, the coronavirus pandemic has had only a “moderate” impact on claim costs, the report says. Moody’s echoed a report by the National Council on Compensation Insurance released earlier this month that said total COVID-19 workers’ comp losses amounted to $260 million in the US.
“The severity of these claims was generally low with 95% of the claims less than $10,000,” Moody’s said. “With more states enacting presumption laws in 2021, insurers will see additional claims but we expect them to be moderate.”
While the passage of presumption laws led to more claims for work comp, state lawmakers also enacted laws that limit exposure for commercial liability. Moody’s said the coronavirus liability protection for businesses that was adopted by most states is a “credit positive” for insurers.
The report says eventually, government might step in to create a public-private risk sharing agreement to cover business interruptions caused by future pandemics. Moody’s said bills were introduced in a number of states last year that would have required insurers to pay COVID-19 business-interruption claims, but none passed.
“With an eye toward future pandemics, some insurers and US legislators are considering public-private risk sharing arrangements to compensate small and large businesses for business interruption caused by pandemics,” the report says. “Common elements of these proposals are that P&C insurers would administer the coverage and assume a limited portion of the risk, while the US government would assume the bulk of the risk.”
Content taken from Andrew G. Simpson’s May 2021 article in the Insurance Journal and is a reformatted post
While a typical business interruption can often be a confusing insurance situation, the picture gets even muddier when it involves cyber coverage.
According to Chris Mortifoglio, who is a Certified Public Accountant and a Certified Fraud Examiner (CFE), understanding the “nuances and differences” of a cyber insurance business interruption exposure or claim compared to a traditional one is more important now than ever.
“I will tell you that in my experience business interruption is often the most misunderstood part of property coverage. Part of that has to do with the fact that it can be very subjective. If you have 10 accounts looking at the same set of financial data, you’ll oftentimes receive 10 different calculations or estimates of what a business interruption loss might be,” said Mortifoglio, who has been dealing with business interruption exposure assessments and claims for more than a decade as the director of forensic accounting at Procor Solutions and Consulting in New York.
A cyber business interruption risk can be difficult to estimate and manage. To further the understanding of cyber BI, Mortifoglio identified five areas where cyber BI differs from traditional BI: period of measurement; period of restoration; personnel involved; geographic constraints, and reputational risk.
1. PERIOD OF MEASUREMENT
The differences between traditional and cyber business interruption begin with the period of measurement or evaluation of lost business income, a period that typically runs shorter for cyber. The timing of a cyber incident can have a major effect on the amount of a potential loss. “Traditionally, when you have a property loss, you’re usually valuing the disruption for a period of weeks or months or years as it takes time to physically repair the property damage that was occurring,” he said. In a cyber incident, the loss may last for just a few hours or a few days. This much shorter time period requires detailed or as Mortifoglio refers to it “granular” on the impact and the disruption on a company. “This means that in order to properly evaluate cyber business interruption, you need much more granular levels of data, maybe even hourly revenue data, or certainly daily sales data, as opposed to a traditional business structure loss where, in some cases, monthly profit and loss statements are enough to evaluate the impacts of the loss,” he said. The granular data is particularly important, for example, when the business operates 24 hours a day, 7 days a week making online sales. “There may be much more greater impacts, and there may be more of a need to really drill down into the disruptions that happen at different times of the day. What happened at midnight versus what happened at 8:00 am?” he explained. When comparing traditional versus cyber BI coverage, the waiting periods following an event before coverage begins are usually different as well. The waiting period for a cyber policy is often denoted in hours, whereas a traditional policy is typically for at least a few days, although it may be written as 48 hours or 72 hours, as opposed to perhaps a 12 hour waiting period for a cyber business interruption loss.
2. PERIOD OF RESTORATION
Another difference is the period of restoration. Defining the period of restoration is very important because that drives the ultimate value of a cyber business interruption loss. The period of restoration is defined as starting on the date of loss, which is the date of physical damage, and ending on the date “when the repairs should have been completed if the insured had utilized due diligence and dispatch.” That period of time is the period of time that an insurance policy will provide coverage for any loss of business income. But determining when this period starts or ends is not always easy. “When it comes to property losses, there’s usually a very clearly defined start to that business interruption period, known as the date of loss. We can define very easily what that period of indemnity is and what a potential extended period of indemnity is because it all depends on the physical damage,” he said. If a fire, earthquake or hurricane impacts an organization, it’s not hard to define when that physical damage occurred. That is the starting point for the period of restoration. However, when it comes to cyber, “there is much less certainty, not only to when a cyber event has started, but also when a cyber event ended” including when the system was repaired and there no longer is a breach. These dates are critical to figuring out the period of time that’s going to be evaluated for a cyber business interruption loss. Mortifoglio recited some questions that come up when evaluating cyber business interruption: “When did the loss start? How do we know that it started at this point in time? Was there a full disruption for an organization or just partial. For example, was it a specific system that was impacted, an email system or an accounting system that went down? And then when did this loss end?”
3. PERSONNEL INVOLVED
So in addition to requiring more and different types of data, and presenting complexities around the period of restoration, cyber business interruption also typically calls for more personnel to become involved from an organization. Mortifoglio cited a need for personnel from the risk manager and legal counsel to financial, technology and operations officers as well as others to contribute to the assessment. First and foremost is the risk manager, the “quarterback of the insurance recovery process” who is helping to manage the actual claims process once something happens, not to mention being the purchaser of the insurance on the front end. After a loss has happened, somebody from the accounting or finance department — perhaps the CFO or the controller—should be called upon to provide the financial data required to quantify any business interruption loss. In addition, it’s important to have someone from operations to assure that the full impacts of the loss are being documented and also connected to the actual financial calculation. And there’s more. “You now have to bring in more folks from your organization to help really provide the picture in the story of what happened and help to properly and accurately quantify cyber business interruption,” Mortifoglio added. This means calling in folks from the IT team to help to identify the status of the cyber incident and define the period of indemnity and the period of restoration. “That’s going to help narrow down the exact period of time that we need to evaluate from a financial perspective to quantify the loss,” he said. Also, the chief systems or technology officer may be needed to oversee data privacy and records issues that may come up in a cyber incident. The legal department may also deal with privacy issues, general legal ramifications and coverage issues, as well as interface with outside counsel brought in to help deal with a cyber breach. “The addition to these extra personnel can add to the complexity of the process,” the Procor executive said.
4. GEOGRAPHIC CONSTRAINTS
Whereas a traditional business interruption claim may be geographically constrained, the same is not always true for cyber exposure. In a traditional scenario, the property damage is contained to either a single location or region that has been hit by a widespread catastrophe. “Think of a hurricane that hit the state of Florida, and if you’re an organization that has multiple locations there, you may have multiple instances of damage. You may have multiple locations that are being impacted,” he noted. When it comes to a cyber loss, these geographic constraints do not exist and an entire organization could be impacted around the globe at the same time. “If you are an organization with a global presence and you have systems that are connecting all of your physical locations around the globe, then a cyber incident may impact you around the globe without any sort of restraints as far as geographic regions. With traditional business interruption, organizations can mitigate their risk by spreading out their operations geographically to avoid a catastrophe, really hampering the entire organization. When it comes to a cyber loss, those types of geographic constraints no longer apply,” he said. For risk mitigation purposes, Mortifoglio stressed the importance of understanding that if a global organization is running systems used by the entire workforce, all operations around the globe can be impacted immediately. “It can make it more complex because you can’t just look at a single isolated location. You have to look at the interconnectivity of your systems to see if something were to happen to them, what would the operational impacts be on your organization? And that’s what’s going to help you evaluate the potential cyber business interruption,” he said. In short, there are no geographic constraints with cyber business interruption and therefore it is harder to mitigate.
5. REPUTATIONAL RISK
Finally, cyber BI carries with it a reputational risk that traditional property business interruption does not. When there is a traditional BI loss such as a fire at a factory, customers and the general public usually do not to have any sort of reaction. Most of the time, the general public is not even aware of the fire and here is no effect on the company’s reputation. However, if a company is hacked and customer records are stolen, Mortifoglio said this can result in a “breach of trust in the public’s eye” and the reputation of an organization can be significantly harmed, often resulting in extended financial losses. In the case of a data breach, even though the system has been repaired and the breach fixed quickly, customers may be hesitant to return to do business with the organization “until they have absolute confidence that it won’t happen again. It’s hard to determine how long that might go on.” However, the forensic specialist noted, cyber business interruption policies are building in coverage to help recover any losses tied to the transitional risks, in a way that is similar to the extended period of indemnity coverage in traditional property policies. “The thought is that once a cyber incident is repaired and a breach is fixed, there may be lingering impacts due to some reputational risk” and there should be coverage there to help capture those losses, Mortifoglio said.
“The notion of implied meaning is the root of misunderstanding.”
— Eric Parslow
PEO Compass brings insight to your PEO related business through real-time reporting, application of innovative technologies, and expert opinions on the industry’s most turbulent topics. Learn about the latest trends in healthcare, risk management, workers’ compensation, and many other topics that affect the PEO community. To register and start receiving breaking industry news, legislative updates, small business, risk management, safety, property casualty, and all things relevant to the industry of professional employment organizations (PEO) click on the link below to register for free.
The Centers for Disease Control and Prevention (CDC) has released new guidance for people who have been fully vaccinated for COVID-19. This long-awaited guidance loosens the CDC’s recommendations for fully vaccinated individuals, allowing them to stop wearing a mask in most settings. In addition, the agency says that those who are fully vaccinated can safely resume activities they had participated in pre-pandemic.
CDC Guidance for Fully Vaccinated People
According to the agency, people are considered fully vaccinated two weeks after their second dose in a two-dose vaccine series, like the Pfizer or Moderna vaccines. They are also considered fully vaccinated two weeks after a single-dose vaccine, like the Johnson & Johnson vaccine.
The most notable update from the CDC’s new recommendations is that those who are fully vaccinated can resume indoor and outdoor activities without wearing masks or physically distancing, except where required by federal, state, local, tribal or territorial laws, rules and regulations, including local business and workplace guidance. In addition, this new CDC guidance says fully vaccinated people can:
Resume domestic travel and refrain from testing before or after travel, or self-quarantine after travel
Refrain from testing before leaving the United States for international travel (unless required by the destination) and refrain from self-quarantine after arriving back in the United States
Refrain from testing following a known exposure, if asymptomatic, with some exceptions for specific settings
Refrain from quarantine following a known exposure if asymptomatic
Refrain from routine screening testing if feasible
For now, the CDC recommends that fully vaccinated people continue to get tested if they are experiencing COVID-19 symptoms.
CDC Guidance for Unvaccinated People
According to the CDC, unvaccinated people should continue to take preventive steps, such as wearing a mask and practicing social distancing. However, according to the agency, it’s safe for those unvaccinated people to walk, run or bike outdoors with members of their household without wearing a mask. In addition, the agency says it is safe to take off the mask when attending a small, outdoor gathering with fully vaccinated family and friends.
Next Steps
As the CDC learns more, it will continue to update its recommendations for vaccinated and unvaccinated people. To learn more, the agency offers resources for choosing safer activities for both fully vaccinated and unvaccinated people.
Libertate will continue to keep you updated on changes to the rules and regulations surrounding Covid-19.
NAPEO‘s President, Mr. Pat Cleary has exciting news about future in-person meetings and events!
The following post was from an eMail to the members from NAPEO’s President, Mr.Pat Cleary regarding the status of upcoming events and the status on in-person attendance.
Ten months ago to the day, I sent an email stating that due to COVID-19 and the associated risks that the committee voted against having the annual SAGE event and conference. It was a heartbreaking email to write, in that the conference was a speck of hope for us all, something out in the far distance that we all looked forward to, when this damned thing would be over. But it was not to be. I attached the email here because re-reading it today, it’s a bit of a time capsule, and reminds us of a low point that we experienced – and survived – together.
So today I’m writing with some very good news: I just this hour signed our contract with the JW Marriott San Antonio Hill Country to hold our conference there – in person – on September 27 – 29 this year. Just about every conversation I have had with any NAPEO member over the past few months has included a discussion of when we would be able to meet again in person. We are all suffering Zoom fatigue, that’s for sure. Looking at the email below, I said, “We want to gather with our members, and as soon as it’s safe to do so, we will.” Every organization has its own level of risk tolerance. Our litmus throughout has been the health and safety of our members and of our team here at NAPEO. Comforted and fortified by the upward trend in vaccinations and downward trend in cases – and the slow easing of restrictions – we will hold our first in-person meeting, our CFO Seminar, at the end of June (location TBD) and hold our Georgia Leadership Council Forum in-person on June 28. And the conference in September.
I’ve said so many times that the arc of meetings during COVID was like this: Plan the meeting, book the hotel, promote the meeting, watch the registrations climb, meeting draws near, registrations begin to cancel, then the meeting cancels. We did that dance too many times in 2020. For our November Board of Directors meeting, we asked our 24 Board members if they wanted to meet virtually or in person. Twenty two said they wanted to meet in person, so we planned the meeting. The week before, in the face of too many cancellations, we moved the meeting to virtual. It was a discouraging, defeating, and tiresome cycle.
So if the cancellation of the 2020 in-person conference was a sign of despair, let this now be a sign of hope, of light, and of hopefully reaching the end of this pernicious thing that has dogged us for so long. As I said in the email below, “The sun will shine again.” And indeed it will – in San Antonio, in September.
I want to thank all of you who have stood by us, who have gamely pivoted with us to the virtual world. It wasn’t a world we wanted, but it was the world we were handed. I want to especially thank our associate members. The face to face meeting is their lifeblood, an option they didn’t have for the past year. They, too, stood with us, and we are grateful. And finally, I want to thank my team here at NAPEO. I use the royal “we” all the time, but the truth is they are the ones who are doing the innovating, the pivoting, the work.
As I always say, this thing isn’t completely over yet, but we appear to be moving in the right direction. I look forward to seeing – and celebrating with – you all in San Antonio.
All the best,
Pat Cleary President & CEO NAPEO 707 N. St. Asaph St. Alexandria, Va. 22314 703-739-8163
The American Rescue Plan Act put in place the Restaurant Revitalization Fund (RRF) to help restaurants and other eligible businesses with funding. The Small Business Administration (SBA) application portal opens today, Friday, April 30, 2021 at 9 am. Applications will be available on Monday, May 3, 2021 at noon.
If you have been in business from January 2020 through March 2021, start pulling the information together now so you can apply when the portal application opens. Below, we have pulled some of the important items to know from SBA.gov .
Who is Eligible
Eligible entities who have experienced pandemic-related revenue loss include:
Restaurants
Food stands, food trucks, food carts
Caterers
Bars, saloons, lounges, taverns
Snack and nonalcoholic beverage bars
Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
Even those that were just starting out in Q1 of 2020, and unable to prove loss of gross receipts, are still eligible for assistance. This is great, as mostly everything offered previously has been weighted on the previous revenues and incurred loss. Instead of prior year proof of receipts, they will take into account the business plan/model for the newly opened business in 2020.
How to Apply
Check out the RRF page, here, on the SBA website for application process. You have 2 options, you can apply through your SBA-recognized Point of Sale system or through the online application portal. Use this link to access the sample application, SBA Form 3172, and prepare what will be needed to apply. You can also access this RRF guide to help you through the process.
Additional Documentation Needed to Apply
Additional documentation required:
Verification for Tax Information: IRS Form 4506-T, completed and signed by Applicant. Completion of this form digitally on the SBA platform will satisfy this requirement.
Gross Receipts Documentation: Any of the following documents demonstrating gross receipts and, if applicable, eligible expenses
Business tax returns (IRS Form 1120 or IRS 1120-S)
IRS Forms 1040 Schedule C; IRS Forms 1040 Schedule F
For a partnership: partnership’s IRS Form 1065 (including K-1s)
Bank statements
Externally or internally prepared financial statements such as Income Statements or Profit and Loss Statements
Point of sale report(s), including IRS Form 1099-K
For applicants that are a brewpub, tasting room, taproom, brewery, winery, distillery, or bakery:
Documents evidencing that onsite sales to the public comprise at least 33.00% of gross receipts for 2019, which may include Tax and Trade Bureau (TTB) Forms 5130.9 or TTB. For businesses who opened in 2020, the Applicant’s original business model should have contemplated at least 33.00% of gross receipts in onsite sales to the public.
For applicants that are an inn:
Documents evidencing that onsite sales of food and beverage to the public comprise at least 33.00% of gross receipts for 2019.
Other Important Items to Highlight
For businesses who opened in 2020, the Applicant’s original business model should have contemplated at least 33.00% of gross receipts in onsite sales to the public.
The PPP loan dollars that you previously applied for and received will be deducted from the gross receipts calculation. So as long as your 2019 gross receipts exceed what you received in gross receipts for 2020 and the funds received under the PPP loan in 2020 you will be able to apply for relief through this fund.
EIDL loan amounts received are not included in this application calculation consideration.
Allowable Use of the Funds
Business payroll costs (including sick leave)
Payments on any business mortgage obligation
Business rent payments (note: this does not include prepayment of rent)
Business debt service (both principal and interest; note: this does not include any prepayment of principal or interest)
Business utility payments
Business maintenance expenses
Construction of outdoor seating
Business supplies (including protective equipment and cleaning materials)
Business food and beverage expenses (including raw materials)
Expecting the Unexpected for Your Small Business. Common insurance types for small businesses.
For better or worse is generally a term related to marriage vows, but in business its just as important! Luckily for business owners there are ways to mitigate the risks associated with the “worse.” Pie Insurance recently released an article covering the types of common insurance for small businesses as well as some not so common options like a business owner’s policy (BOP); I thought it was worth sharing.
A Business Owner’s policy can include professional liability insurance (errors and omissions insurance), a commercial umbrella policy, employment practices liability insurance, directors and offices liability insurance and terrorism insurance. You can check out the full article here. The key to insurance is never needing it, but having it in place when you do. It can make the difference in saving your company when the unexpected happens. Contact us at Libertate Insurance, we can help.
1st Qtr 2021 Small Business Data
NAPEO issued small business snapshot data on Q1 of 2021. Check out the full review here.
High points from the data include:
Percentage change of Daily Small Business Revenue from January 2020 to January 2021 showing 50% decrease in revenues at April 1, 2020 with slowing increase about 31% overall increase at January 1, 2021. Small businesses are slowly pulling back.
Job losses in the United States are reported at 9.6 million; with the expected hardest hit industry of Leisure and Hospitality accounting for nearly 40% of all loss reported.
On a state by state analysis the numbers are showing more increase than decrease with the average unemployment rate reporting at 5.6% at the close of February 2021. (US Bureau of Labor Statistics). Overall jobless rates are down in 23 states as of March and higher in only 4.
US Small Business Administration (SBA) Updates
If your business previously received the Economic Injury Disaster Loan (EIDL) Advance from the SBA for less than $10,000, the SBA is allowing applicants to re-apply to receive the full amount of the advance up to $10,000.
If your business was also a recipient of the EIDL these loans were previously limited to six months of economic injury up to a maximum of $150,000; the SBA has announced a change that will allow loan limits up to 24 months of economic injury with a maximum loan amount of $500,000. Be advised and proceed with caution, as the SBA takes security interest in the business assets for loan amounts over $25,000.
The SBA is also sending out emails to the EIDL loan recipients extending the first payment due on the EIDL loans to 2022 for loans issued in 2020. The first payment due date is extended 24 months from the date on the note. They have indicated that 2021 loans will have initial payments due 18 months from the note date. Interest continues to accrue during the deferment period.
Follow these instructions if you wish to request a loan increase:
Use subject line “EIDL Increase Request for [insert your 10-digit application number]”
Be sure to include in the body of your email identifying information for your current loan including application number, loan number, business name, business address, business owner name(s), and phone number.
Important: Do not include any financial documents or tax records with your initial request. You will receive a follow up email notification if we need additional documents.
You can check out all of the updates for offerings available from the SBA here.
History of Workers’ Compensation
AND last but not least, for those insurance nerds, another very interesting release from Pie Insurance is a history of workers’ compensation insurance. Covering where the laws stand today, where it started and how it has changed the benefits to workers in the United States. Interesting and educational read, check it out here.
Be sure to check out our continual updates here, on PEO Compass, regarding Florida’s House Bill 1305 and its impact on workers’ compensation and the PEO industry.
The House of Representatives has passed its version of the proposed stimulus bill, which includes extended unemployment benefits, direct checks to individuals and more. The bill is now with the Senate, where some provisions will likely change. Democrats hope to pass the $1.9 trillion relief package by mid-March, before existing COVID-19 relief measures, such as enhanced unemployment insurance, expire.
The bill could pass a Senate vote in the coming weeks, but it may face significant challenges amid a 50-50 party split.
It’s important for employers to have an idea of what to expect. To that end, this article outlines the most relevant aspects currently known about the bill—these components are likely to change as Congress hashes out its details.
Small Business Assistance
The proposed bill intends to invest billions toward small business assistance, and even provides heavily impacted businesses with fewer than 10 employees priority with some of the funds. Here is the current funding breakdown:
New grant program for bars and restaurants, specifically: $25 billion
Eligible businesses could receive up to $10 million, using the money for payroll, rent, utilities and other expenses.
Paycheck Protection Program: $7.25 billion
Stimulus checks
Just like the two other COVID-19 stimulus packages passed during the pandemic, this version will also feature direct payments to Americans. This time around, eligible recipients can expect $1,400 per person ($2,800 for couples), including adult dependents—a family of four could get up to $5,600.
However, payment parameters are stricter this time around than with previous stimulus checks. The full check amount will go to individuals earning under $75,000 (or $150,000 for couples), with payments cut off entirely for individuals earning over $100,000 (or $200,000 for couples). Anyone with income between those figures will receive a reduced check.
Unemployment Aid
The proposed bill seeks to extend two previously established pandemic unemployment assistance efforts: the Pandemic Unemployment Assistance Program and the Pandemic Emergency Unemployment Compensation program. The financial assistance from these programs is currently set to expire in mid-March, pressuring legislators to act quickly.
The bill also seeks to enhance unemployment assistance payments from the current $300 per week to $400 per week. Unemployed gig workers, freelancers, contractors and others who previously qualified for aid will continue to be eligible under these programs.
Under the proposed bill, these programs and their financial aid would be extended throughAug. 29.
Housing Assistance
This proposed stimulus plan intends to set aside billions in financial aid to homeowners and renters. Here is the current funding breakdown:
Aid for back rent, rental assistance and utility payments: $19.1 billion
Aid for mortgages, utilities and property taxes: $10 billion
Aid to states and localities to help individuals at risk of becoming homeless: $5 billion
Paid Sick Leave
Previous stimulus packages guaranteed workers two weeks’ pay if they couldn’t work due to COVID-19-related reasons. The current proposal does not extend these benefits. However, employers that choose to continue offering this paid sick and family leave through Oct. 1 may receive a tax credit.
Minimum Wage
The proposed bill would gradually increase the federal minimum wage to $15 per hour by 2025. It would also mandate that tipped employees, youth workers and workers with disabilities all receive the full federal minimum wage. This change would affect the wages of 27 million Americans. However, this particular proposal is hotly contested, and there has been speculation that it may need to be scrapped in order to secure the requisite number of votes to pass.
Update: Due to congressional rules, this provision will almost certainly not appear in the final bill after going to the Senate.
Aid to Schools and Child Care
A significant portion of the stimulus bill involves aid to states, including schools and child care facilities. Here is the current funding proposal:
Aid for getting K-12 schools ready for in-person learning: $130 billion
Money could be used for purchasing protective equipment, improving ventilation systems and preventing teacher layoffs. However, 20% of the money schools receive must be used to address pandemic learning loss—for example, extending learning time into the summer.
Aid for colleges: $40 billion
Institutions would be required to spend at least 50% of their allocated funds on emergency financial aid grants to students.
Child care provider assistance: $39 billion
Funds may be used for payroll, rent, protective equipment and other expenses.
Tax Credits
The stimulus bill aims to provide child tax credits to more low-income families. The bill proposes $3,000 for parents of children under the age of 18—$3,600 for parents of children under the age of 6. This credit would also become fully refundable.
The bill also seeks to expand the earned income tax credit for individuals without children. The maximum credit would be nearly tripled under the stimulus proposal, and eligibility would be expanded—the childless tax credit eligibility age would be reduced to 19 years of age, down from 25.
Aid to states, local governments, tribes and territories
The proposed bill would provide billions in financial assistance to states, local governments, tribes and territories. It’s currently unclear whether there are specific usage requirements tied to this assistance, or whether funds may be used however the entities deem fit. Here is the current funding breakdown:
Aid to state and local governments: $325.5 billion
Aid to tribes and territories: $24.5 billion
Summary
Again, these proposed figures are subject to change as Congress continues its debate over specific policy aspects. Some aid amounts are wildly above what some legislators deemed appropriate, signaling a contentious battle ahead.
Thank you for being part of our PEO Compass information outlet. Contact us at Libertate Insurance for your PEO and Workers’ Compensation needs.
