The new COVID-19 relief package recognizes the importance of optometry’s full inclusion in all federal health legislation and ODs’ role as physicians in the nation’s COVID-19 mobilization efforts. There are tax breaks and credits available for employers who keep staff on or provide paid leave during the crisis.
The year of the eye exam obviously started off much differently than anyone anticipated. As you have now no doubt heard, the U.S. Senate has overwhelmingly passed its third and most recent stimulus bill (with the House imminently set to vote), which will provide significant relief to ODs, their practices, and their patients during this turbulent time.
A special thanks to the American Optometric Association (AOA), without whose involvement this bill and the others before it would be significantly less beneficial for optometry!
Here is what the first three phases of the COVID-19 relief package mean for ODs.
Phase three (the Coronavirus Aid, Relief, and Economic Security Act or “CARES Act”)
This 880-page piece of legislation was the third COVID-19 relief package and was passed by the Senate. As of publication time, it awaits passage in the House and signature by President Donald Trump. Provided there are no amendments in the House, it injects nearly $2 trillion into the economy by providing assistance for ODs, their practices, and their employees in several ways, including:
• Temporarily suspending the Medicare sequester from May 1, 2020, until Dec. 31, 2020, resulting in a two percent increase in Medicare reimbursements to ODs and other Medicare providers during this period.
• Requiring the federal government to defer federal student loan payments (principal and interest) for six months without penalty through September 30, 2020, for optometry students and others, for all federally owned student loans.
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• Creating new 7(a) Small Business Administration (SBA) loans as part of the “Paycheck Protection Program.” Optometry practices, including sole-proprietorships, independent contractors, and other eligible self-employed individuals, may apply for loans through December 31, 2020, of up to $10 million. Many private lending institutions will participate in this program, and the federal government will guarantee the loans at 100 percent so eligibility to re-pay is not a consideration because the loans will be forgiven if the funds are used for legitimate business expenses (e.g., payroll expenses, paid sick or medical leave, insurance premiums, rent, interest on mortgages, utilities, and other debt obligations). However, the amount of loan forgiveness may be reduced by the number of employees no longer retained and/or by a significant reduction in employee salaries, so be careful. Additionally, any funds not used for legitimate business expenses must be repaid within 10 years.
• Adding an incentive to hire back employees who were laid off after February 15, 2020. Employers will not be penalized for having reduced their workforce for purposes of loan forgiveness, provided those workers are re-hired, and the cancelled debt with this loan forgiveness program will not be treated as taxable income. Further, it allows borrowers who received an Economic Injury Disaster Loan (EIDL) between February 15, 2020, and March 31, 2020, to receive assistance under this program, but after March 31, 2020, limits a borrower from receiving Paycheck Protection Program assistance as well as an EIDL for the same purpose.
• Offering $10K in emergency grants (essentially an advance on the EIDL loan) for eligible businesses suffering economic harm due to COVID-19 who apply for an EIDL that was created in the Phase Two COVID-19 Relief Package. Funds will be available within three days of loan application and must be used for legitimate business expenses (e.g. payroll, rent, mortgage payments, paid sick leave). These advance payments will not be required to be repaid, even if the EIDL is ultimately denied; however, the advance payments will be considered when determining loan forgiveness if the applicant transfers into the aforementioned SBA 7(a) Paycheck Protection Program.
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• Providing a one-time, up to $1,200 check to individual taxpayers (or up to $2,400 for married filers), that phases out beginning at $75K in adjusted gross income for single filers and at $150K for married filers, based on the taxpayer’s 2018 filed tax return; check amounts increase an extra $500 for every child. This will directly benefit most employees at optometry clinics, as well as ODs who personally qualify.
• Broadening telehealth regulations for Medicare beneficiaries to include new patients during the COVID-19 crisis.
• Authorizing the U.S. Treasury to provide small businesses with an advance tax credit during the crisis instead of waiting to be reimbursed quarterly for fulfilling the new paid sick and family medical leave requirements that were part of the Families First Coronavirus Act (i.e., Phase Two). Further, employer liability is limited to $5,110 in aggregate for sick leave, $2,000 in aggregate to care for a quarantined individual or child due to COVID-19 for each employee, and $10,000 aggregate for each employee under all leave. Re-hired employees who were laid off after March 1, 2020, are also provided paid sick and family leave.
1. Congress.gov. S.3548 - CARES Act. Available at: https://www.congress.gov/bill/116th-congress/senate-bill/3548. Accessed 3/27/20.
2. American Optometric Association. AOA Mobilizes for Doctors in National Response to Pandemic. Available at: https://www.aoa.org/news/advocacy/aoa-mobilizes-for-doctors-in-national-.... Accessed 3/26/20.
3. Kaiser Health News. Senate Overwhelmingly Passes House’s Coronavirus Bill, Immediately Switches Attention to ‘Phase 3’ Stimulus Package. Available at: https://khn.org/morning-breakout/senate-overwhelmingly-passes-houses-cor.... Accessed 3/26/20.
4. American Optometric Association. Congress’ COVID-19 Relief Package Recognizes Optometry’s Physician Role. Available at: https://www.aoa.org/news/advocacy/aoa-secures-legislative-win-provides-d.... Accessed 3/26/20.