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COVID-19 Update for Businesses: Benefits + Properly Documenting Your PPP Loan

PPP Loan Amid COVID-19

May 22, 2020

IRS Allows Mid-Year Insurance Changes

The IRS recently released new guidance allowing certain mid-year election change events for group health plans, health flexible spending accounts and dependent care assistance programs for the calendar year 2020.

An employer may choose to allow employees to make one or more of the following mid-year election changes:

  1. Make a new election for employer-sponsored health coverage on a prospective basis if the employee initially declined coverage
  2. Make changes to employer-sponsored health coverage (for example, a change from individual to family coverage, or change from one type of plan to another)
  3. Revoke employer-sponsored health coverage on a prospective basis, if the employee attests in writing he/she has comprehensive coverage or will immediately enroll in other comprehensive coverage
  4. Revoke an election, make a new election or decrease or increase an existing election regarding a health flexible spending account or a dependent care assistance program on a prospective basis

These changes are not required; employers can determine if these options are advantageous to their employees and the business. Due to the complexities of this decision, companies are encouraged to consult counsel for assistance in determining whether and which changes to allow or to make a plan amendment.

FSA and Health Insurance Mid-Year Changes Allowed | Thursday, May 14

Layoffs, Furloughs + Unemployment

Almost 15% of America’s workforce has applied for unemployment benefits, which means they have likely been laid off or furloughed due to COVID-19. Whether temporary or permanent, employers have several benefit considerations.

Benefits During a Furlough/Layoff

HR Quick Take: Reduced Hours and Unemployment Compensation

PPP Loans: Demonstrating You Meet the SBA Requirements

The CARES Act (S.3548) created the Paycheck Protection Program (PPP), authorizing some businesses to apply for loans, some of which were eligible for forgiveness through the Small Business Administration.

One loan requirement was that the borrower makes a good faith certification that the uncertainty of the current economic conditions made the loan request necessary to support ongoing operations.

Businesses also needed to acknowledge the funds would be used to retain workers, maintain payroll or make mortgage, lease and utility payments. If a company received a loan larger than $2 million, the SBA will utilize its review authority to ensure compliance.

Employers need to document their loan rationale sooner rather than later in case of review.

PPP Money: Demonstrating You Meet the SBA Requirements | Thursday, May 14

Can I Keep PPP Money? Should? The SBA Clarifies | Wednesday, May 13

Returning to Work During a Pandemic

Governor Reynolds continues to relax restrictions on business operations in Iowa and that means many employers with teleworking employees or laid off/furloughed employees are looking at a return to the workplace.

Great news for business, however, there are numerous considerations for employers as they ask employees to come back:

  • Ensuring on-site safety
  • What to do if employees are concerned or anxious
  • Avoiding claims of discrimination as you recall employees
  • Required testing/vaccination, among others
  • Updating or creating new policies

The Return to Work Package offers over a dozen sample policies and forms for employers to customize and includes a 30-minute consultation with an employment attorney who can walk you through how your business may consider safely returning to the workplace.

Other Coronavirus/COVID-19 Legal Resources

Davis Brown regularly updates the COVID-19 legal resources page providing interpretations of guidance from administrative bodies and new laws. If you have a question about how your business can adapt, please contact your legal counsel.

You can count on The Partnership to continue to share accurate and fact-based updates as well. See more on COVID-19 here.

Find these tips useful? Find more business tools and information by visiting the Business Resources page.

Davis Brown Law Firm blogs, legal updates, and other content are for educational and informational purposes only. This is not legal advice and it does not create an attorney/client relationship between Davis Brown and readers. Each circumstance is different; readers should consult an attorney to understand how this content relates to their personal situation. You should not use Davis Brown blogs or content as a substitute for legal advice from a licensed attorney in your state. Reproduction of Davis Brown content without written consent is prohibited.