COVID-19 Update: Interplay of Various Programs Under the CARES Act


COVID-19 has affected businesses across many sectors, including healthcare. This alert focuses on the impact of utilizing various relief programs available and the interplay of such utilization with eligibility for other programs.

Loan Options:

Several loan options are available to small to mid-size businesses. The Small Business Administration’s (“SBA”) Paycheck Protection Program (the “PPP”) provides forgivable loans of up to $10 million to small businesses. The SBA’s Economic Injury Disaster Loan Assistance program (“EIDL”) provides non-forgivable loans of up to $2 million to small businesses with potential advance of up to $10,000 that do not have to be repaid. The Federal Reserve’s Main Street Lending Program (“Main Street”) is available to small and mid-sized businesses and provides non-forgivable loans ranging from $1 million to $25 million. The Federal Reserve is also required to implement, but has yet to provide any guidance on, a Midsize Business Loan Program (“Midsize”) for midsize businesses that is similar to but separate from Main Street.

A business may apply for both a PPP loan and a loan under EIDL, but the proceeds from the loans cannot be used for the same purposes. A loan granted under EIDL is also eligible to be refinanced into a business’s PPP loan, and therefore may be eligible for forgiveness. In addition, businesses that receive PPP and EIDL loans are still eligible to apply for Main Street loans. Guidance is pending regarding the terms of Midsize loans and whether a business may receive funds under Midsize in addition to other programs.

Federal Tax Relief:

Employers may defer the deposit and payment of the employer’s share of Social Security taxes, with partial payment due in December 2021 and full payment due in December 2022. Receipt of a PPP loan does not impact the deferral; however, once the lender issues a decision to forgive the PPP loan, the employer is no longer eligible for additional deferrals. The amounts already deferred would remain payable on the dates listed above.

Employers may also qualify for Employee Retention Credits equal to 50 percent of qualifying wages up to $10,000 per employee if certain criteria are met. An employer that receives a PPP loan is not eligible for Employee Retention Credits and must repay any credits received before the PPP loan was granted.

Based on current guidance, no restrictions apply to an employer’s ability to take advantage of Social Security tax deferrals or Employee Retention Credits based on receipt of a Main Street or Midsize loan.

Additional Relief Available for Healthcare Providers:

The Centers for Medicare & Medicaid Services (“CMS”) has expanded its Accelerated and Advanced Payment Program that allows certain providers to receive advanced payments equal to three to six months’ worth of Medicare reimbursement. The expanded program acts as a short-term, interest free loan that works independently from other relief options.

$30 billion out of $100 billion in Provider Relief Funds has automatically been distributed to providers based on their share of total 2019 Medicare Fee-for-Service reimbursements. Receipt of other forms of relief does not prohibit the provider from keeping the Provider Relief Funds, but the recipient must certify that it will not use the funds to reimburse expenses or losses that have been reimbursed from other sources, such as PPP loans. No guidance has been issued to date regarding the remaining $70 billion in Provider Relief Funds to be released.

Additional Information:

The availability of relief and guidance on related programs is quickly evolving and is subject to change. Underwood Law Firm is monitoring this developing topic. If you have questions related to the relief options or any other health care matters, please contact Gavin Gadberry ( or Traci Phipps (

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