Congress’ COVID-19 relief package: HHS funds, ERC extension and more
Congress’ $1.9 trillion COVID-19 relief package replenishes funds available to struggling optometry practices, as well as extends federal tax provisions that benefit doctors and students still coping with an ongoing public health emergency.
On the eve of the one-year mark for U.S. pandemic lockdowns and restrictions, Congress’ latest rescue and aid legislation, coined the “American Rescue Act,” now goes before President Joe Biden’s desk for approval. The massive legislation allots billions of dollars to relief funding initiatives that helped support many doctors of optometry, including Health and Human Services (HHS) Provider Relief Funds and Small Business Administration (SBA) Economic Injury Disaster Loans (EIDL), and finalizes tax changes to ensure practices and students are not unnecessarily burdened as the nation rebounds amid declining COVID-19 case counts.
“Once again, Congress replenished and reworked the kinds of assistance available to doctors of optometry, staff and students not only to ensure a continuity of patient care in our communities but also to ensure we’re moving forward as we anticipate brighter days ahead,” says William T. Reynolds, O.D., AOA president. “While there is still work to be done, the AOA and our volunteers continue to demonstrate an exceptional level of commitment and steady focus on supporting our profession throughout this crisis.”
The 628-page bill, passed along party lines, comes less than three months after Congress’ $2 trillion-plus aid and government funding package and nearly a year after the landmark, Coronavirus Aid, Relief and Economic Security (CARES) Act. As in previous legislation in which the AOA helped optometry secure access to over $1.69 billion in federal aid, this latest bill contains several AOA-backed provisions that will immediately benefit optometry practices, doctors and students, including:
- $7.25 billion set aside for the Paycheck Protection Program (PPP).
The new relief package provides an additional $7.25 billion in funds for the PPP; however, it does not extend the current PPP application period deadline that ends on March 31, 2021. The Biden administration recently directed the SBA to prioritize PPP applications from businesses with fewer than 20 employees during a two-week window, from February 24 to March 9. The December 2020 bill authorized “second draw” PPP loans, and the deadline for both first and second-draw PPP loans remains March 31, 2021.
For more information about second draw PPP loans, including eligibility requirements or the application process, access the #AskAOA PPP Funding Opportunities, First and Second Draw PPP Options webinar.
- $8.5 billion set aside for new HHS Provider Relief Funds.
The new relief package approved $8.5 billion in additional funding for doctors of optometry and other health care providers in rural areas, those participating in the Medicaid program or a state Children’s Health Insurance Program. In the December 2020 relief bill, Congress approved $3 billion for an additional round of relief funding available to doctors participating in Medicare and Medicaid. Currently, the AOA is working to ensure past and future HHS Provider Relief Funds are not treated as taxable income, and potential legislation to address this matter is forthcoming.
- $10 billion set aside for additional EIDL, tax changes.
The new relief package provides an additional $10 billion for EIDL and the application deadline has been extended until Dec. 31, 2021. These loans allow businesses that have experienced losses greater than 50% to apply for an additional $5,000 provided businesses have not received the full $10,000 EIDL advance. Additionally, the bill removes EIDL from gross income and would allow for the full deductibility of expenses paid for with EIDL. The December 2020 bill provided an additional $20 billion for EIDL grants and Congress rescinded the requirement that PPP borrowers deduct the amount of EIDL advance from PPP forgiveness.
- Extension of the Employee Retention Credit (ERC).
The new relief package extends the ERC through July 1, 2022. The ERC is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees, now until July 1, 2021. The Senate version of the bill expanded the ERC to allow the hardest hit businesses to count all wages paid as qualifying wages, not just those wages paid to employees who are not providing services. The December 2020 bill modified the ERC to allow businesses that drew PPP loans to qualify, while also expanding (50% to 70%) and originally extending the ERC through June 2021.
For additional information on the ERC, access the recent #AskAOA webinar.
- Student loan relief tax exclusion.
The new relief package makes all COVID-19 student loan relief tax-free. Eligible loans include all federal student loans and federal parent loans, including direct loans, Federal Family Education Loan program loans (regardless of whether held by the U.S. Department of Education or commercial lenders), Federal Perkins Loans and federal consolidation loans, all state education loan programs, institutional loans made by a college or university, and private student loans and private parent loans.
Notably, Congress’ new relief package did not deliver on a pair of priorities that the AOA has championed in recent weeks—an extension of the Medicare sequester moratorium and making past and future HHS Provider Relief Funds not treated as taxable income. Undeterred, the AOA continues advocating toward both measures with meaningful progress.
As part of the December 2020 bill, Congress delayed the 2% Medicare sequester through April 1, 2021; however, this most recent legislation did not include another extension. Therefore, the AOA is supporting a concurrent legislative effort, H.R. 315, to delay the Medicare sequester through the duration of the public health emergency.
Significantly, the same day that President Biden signed the new relief bill into law, the HHS issued an amendment under the Public Readiness and Emergency Preparedness (PREP) Act that authorized eligible doctors of optometry to administer COVID-19 vaccinations as part of the nation’s public health response to the pandemic. This federal recognition comes after months of AOA advocacy to secure optometry’s vaccinator status, given the profession’s widespread accessibility, and while Congress approved an additional $14 billion to support enhanced vaccine distribution.
This amendment allows doctors of optometry to be authorized to provide COVID-19 vaccinations when certain requirements are met. The PREP Act preempts some state laws; however, there are provisions within the amendment that defer to individual states, if the state would like to impose additional training requirements. Soon, the HHS will create a website to allow doctors to sign up to administer the vaccine. The AOA will share additional information when available.
Currently, eight states now grant doctors of optometry the authority to administer COVID-19 vaccines, and affiliates nationwide continue their work to underscore optometry’s availability as vaccinators during the public health emergency.
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