What happens when small employer Paycheck Protection Program (PPP) money runs out?

On March 25, 2020, the Senate voted unanimously, 96-0, in favor of the Coronavirus Aid, Relief, and Economic Security (CARES) Act which offered numerous programs designed to assist small business and employees during the downturn in the economy due to the pandemic.  In an effort to stabilize employment, the Paycheck Protection Program, or PPP was created to assist employers with meeting payroll and retaining employees.  These “loans,” which could be forgiven if the funds are properly used, where distributed in an amount equal to 2.5 times an employer’s monthly payroll.  To date, approximately 4.1 million PPP loans were approved and have helped employers retain their staff.

Goldman Sachs, a prominent investment banking organization funded a survey¹ in July, 2020 of 1511 small businesses regarding the PPP loan program and how they are faring during the COVID-19 outbreak.  The survey results showed:

1. 84% of respondents said they would exhaust their PPP funding by the end of August;
2. Only 16 percent said they would be able to continue paying workers beyond that point; and
3. Only 37% percent of small-business owners said they would be able to survive another wave of government imposed business closures.

If these results provide foresight into the economy’s future, we could see numerous layoffs/closures of small businesses beginning September 2020.  This is an intimidating forecast for small employers but how are terminated employee’s going to weather the storm?  There are unemployment funds to assist with the daily expenses but what about the loss of an employer-sponsored health insurance plan in the event the employee or family member becomes ill?

In an effort to assist employees losing coverage, the State of Arizona passed legislation in 2018 requiring employers with under 20 employees to offer the continuation of group medical insurance (commonly known as “Arizona miniCOBRA”) for up to 18 months at the group rate (plus a 5% administration fee).  For older employees comparing the costs and benefits of medical plans through healthcare.gov and miniCOBRA, many find it is better to remain on the group plan.

Unknown to most small Arizona employers that offer a group plan, Arizona miniCOBRA mandates they send a notice detailing an employee’s continuation coverage rights upon termination or reduced work hours.  If the former employee elects to continue coverage, the employer is required to administer their insurance as well as monitoring numerous events causing an increase to the number of months under the group plan.  Currently, there is no government fine for noncompliance but the penalties arise when the employer is sued by a former employee for noncompliance with Senate Bill 1217.  For further information on the law, employer requirements and assistance, visit www.azminicobra.com/law.html.

Contributed by:  Scott Beaver, COBRA Solutions – A leader in continuation coverage administration.

Michelle Cornelius, Director of Memory Care Programs, was given the honor of presenting at the national Home Care Association of America Conference in D.C. on Sunday, September 23, 2018. In addition to sharing Cypress’ success with their dementia program, Cornelius also educated attendees on why it’s so important and how to start one for their own agency.  Home Health Care News approached Cornelius and Bob Roth, Managing Partner, following the presentation to get more information.

Read the article published in Home Health Care News Here!

It’s not uncommon to be covered by two dental benefits plans, which means that you have “dual coverage.” If this applies to you or your family members, take a moment to learn how dual coverage works with these four key points.₈

Understand your coordination of benefits (COB).
Your COB is the way your two plans work together when you have dual coverage. The plan that pays first is called the “primary plan,” while the one that pays second is called the “secondary plan.” When your dental office sends a bill, they will address it to the primary plan provider. After the primary plan provider has paid, the remainder of the bill will be sent to your secondary
plan provider. In some cases, the secondary plan may cover the rest of the bill.

Figure out which plan pays first.
For kids, the primary plan provider can be determined in a couple of ways:

• If you’re currently married and your kids have dual coverage, their primary plan will be based on your and your spouse’s birthdays. The parent whose birthday comes first in the year (regardless of birth year) will have the primary plan. For example, if your birthday is June 15th and your spouse’s birthday is December 1st, yours would be the primary plan.
• When parents are divorced, a child’s primary plan typically comes from the parent with the largest portion of custody. It’s best to check with your benefits provider because this may vary depending on your situation.

Don’t expect double coverage.
Dual coverage means your two benefits providers share costs in a pre-determined way – not that you receive double benefits. For example, both plans may cover two cleanings a year, but having dual coverage doesn’t mean that you’re now covered for four.

Know if your plan has a non-duplication of benefits clause.
Some plans have a rule that prevents secondary plan coverage when the primary plan already paid as much or more than the secondary plan would have covered if it had been the primary plan. Check your plan information to see if your secondary plan has this rule before using your benefits.

With some quick research, you can handle dual coverage with ease and know what to expect after you visit the dentist.

Interested in learning more about ASBA's exclusive dental and vision plans for members? Contact Ashley Vizzerra for a quote today!

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SOURCES

8http://grinmag.com/documents/winter-2016.pdf