Overview of Paycheck Protection Program and Health Care Enhancement Act (COVID 3.5)
Congress passed, and President Trump signed into law, House Resolution 266, providing $484 billion in additional funding to certain programs under the CARES Act, including funding for small business disaster loans and grants, the Paycheck Protection Program, hospitals and health care providers, and expanded testing.
Business Support:
Disaster Loans Program: Appropriates an additional $50 billion for the broad Disaster Loans Program.
Emergency Economic Injury Disaster Loan (EIDL) and Grant:Increases the authorization for EIDLs by $10 billion to cover businesses, cooperatives, employee stock ownership plans, and tribal businesses with 500 or fewer employees, as well as sole proprietors and independent contractors. Agricultural businesses with less than 500 employees are eligible for EIDL loans and grants.
Paycheck Protection Program (PPP): Appropriates an additional $321 billion in funding for the PPP, which offers low-interest loans guaranteed by the Small Business Administration (SBA). Loans can be forgiven for borrowers that pay eligible payroll expenses or rehire workers over eight weeks. $60 billion must be for smaller depository institutions, credit unions, and community financial institutions to help make funds available to un-banked and under-banked participants. The previous enacted program requirements and conditions of the program remain the same. Note: the program initially went live on April 3 and funding was exhausted within two weeks.
Healthcare Support:
Hospital and Provider Grants: Provides an additional $75 billion to reimburse healthcare providers for expenses and lost revenue due to coronavirus.
Expanded Testing: Provides $25 billion to develop, purchase, administer, process, and analyze tests for COVID-19. Specifically,funding could be used for manufacturing and distributing tests, procuring supplies such as personal protective equipment needed to administer tests, developing rapid point-of-care tests, and conducting surveillance and contact tracing. As much as $1 billion of the testing funds could be used to cover tests for the uninsured.
In addition, $11 billion to states and localities to develop, purchase, and administer tests and conduct testing-related activities such as contact tracing. This includes at least $4.25 billion allocated to states, localities, and territories based on their relative number of Covid-19 cases and at least $2 billion allocated to states, localities, and territories based on a formula that applied to the Public Health Emergency Preparedness cooperative agreement in fiscal 2019.