Updated March 27, 2020

President Trump on Friday, March 27, signed into law the third legislative relief package developed by lawmakers to respond to the economic crisis created by the novel coronavirus pandemic. The Coronavirus Aid, Relief and Economic Security Act (HR 748), also known as the CARES Act, is a nearly $2 trillion “wartime” stimulus intended to protect employers, workers and businesses. For an overview of the CARES Act, watch the ADA webinar What’s in the CARES Act and How It Can Immediately Impact My Dental Practice.

American Dental Association on-demand webinar

CDA is extremely pleased that the Phase 3 legislation appears to give dentists more of the kind of support they need to maintain their practices and protect themselves and their employees. The country is facing an unprecedented health and economic emergency due to COVID-19. Short-term relief is just one priority; the other is ensuring that dental offices will be able to get up and running to treat patients and address delayed dental needs once the shelter-in-place restrictions are lifted and dentists can begin treating patients safely. 

The CARES Act is a step in the right direction to help mitigate the unprecedented and devastating economic damages created by this crisis, but CDA does not expect this to be a panacea or even the final relief effort as the impact of this shutdown may be felt for many months.

CDA is reviewing the act to understand the details of the package and the opportunities it presents for dentists. Implementation will not be immediate and additional regulations and guidance from a number of federal agencies will be needed to clarify what the various provisions mean for dentists.

We will continue communicating to members on how they can take advantage of the opportunities the measure presents as information becomes available, including through the CDA COVID-19 Webinar Series. The series is meant to help guide dentists through the most pressing COVID-19 issues. In addition, we will develop resource guides in the coming days and weeks about the implementation of the legislation, how you can best utilize programs created by the CARES Act, and regulatory measures as they are developed.

Below are some top line highlights from ADA that we believe will be the most useful to dentists, dental students and dental team members in the CARES Act:

• Several Small Business Administration loans are available to dentist owners. One loan in particular is the Economic Injury Disaster Loan, which establishes an emergency grant to allow a dental practice that applies for an EIDL loan to receive an advance on that loan of no more than $10,000, which the SBA must distribute within three days. The money may be used to pay for employee sick leave (COVID-19 related), mortgage or rent and other overhead expenses. The grants would be awarded on a first-come, first-served basis until the $10 billion fund is exhausted, and applicants would not have to repay the $10,000 grant even if they are denied the loan. Visit the SBA site and learn more about the EIDL loan and other SBA loans. Likely due to enormous demand, the SBA site is working sporadically. 
• Employers may be eligible for a portion of their federal small-business loans to be forgiven (tax-free) for amounts spent for certain payroll, sick leave, family leave and other overhead expenses between Feb. 15 and June 6, 2020, as well as certain other debt obligations incurred prior to Feb. 15, 2020.
• The SBA will pay the principal, interest and any associated fees that are currently owed on certain SBA loans for a six-month period starting on the next payment due date. Loans that are already on deferment would include an additional six months of payment by the SBA beginning with the next payment.
• The CARES Act allows for a withdrawal of money from retirement funds (i.e., 401(k), etc.) of up to $100,000 in 2020 without paying a penalty if the dentist, their spouse or dependents are diagnosed with COVID-19 or experience adverse financial consequences as a result of being quarantined, furloughed, laid off or having work hours reduced due to the coronavirus pandemic.
• Federal student loan borrowers would not be required to make a payment through Sept. 30, 2020. During this time, no interest would accumulate on those federal loans (payment suspension applies only to loans held by the Department of Education, not private loans). Regardless, loan borrowers should call their lender to verify eligibility.
• For dentist employees who receive assistance from their employers in paying off student loans, those dentist employees will not have to pay income tax on any payment assistance, up to $5,250, that they receive between enactment of this law and Jan. 1, 2021.
• Employers and self-employed individuals can defer payment of the employer share of the Social Security tax until Dec. 31, 2020. The deferred amounts would be paid over the following two years, with half of the amount required to be paid by Dec. 31, 2021 and the other half by Dec. 31, 2022.
• The act provides for a one-time federal income tax rebate for eligible dentists and their employees in 2020. The rebate amount would be $1,200 for individual tax filers and $2,400 for those filing a joint return. The amount of the rebate will be reduced for single filers making more than $75,000 and joint filers earning in excess of $150,000. In addition, a rebate of $500 is available for each child.
• Emergency unemployment compensation benefits are dramatically increased – by as much as $600 a week – should dental office employees be laid off. This is a supplement for state-funded unemployment insurance, with the federal enhancement being funded for four months.
• An appropriation was made for $1.6 billion for the Strategic National Stockpile to purchase pharmaceuticals, personal protective equipment and other medical supplies, which would be distributed to state and local health agencies in areas with shortages.

In addition to the relief measures in the CARES Act, the Families First Coronavirus Response Act, HR 6201, was signed into law March 18 by the president. It provides that beginning April 1, employers with fewer than 500 employees, must provide additional protected leave to eligible employees, in certain defined situations and with some exemptions. The new requirement, which amends the Family and Medical Leave Act, will expire Dec. 31. The new leave is provided to employees at no cost to the employer, and the cost can be recovered 100% from the federal government. However, several questions remain unanswered. HR 6201 includes an exemption for “employers of health care providers” and small businesses with less than 50 employees that demonstrate that providing the leave would affect the viability of the business.

The law provides that that U.S. Secretary of Labor issue regulations further clarifying these exemptions. At this time, clear regulations have not been issued that define “health care provider” and how small businesses can meet the undue hardship standard identified in the law. CDA anticipates that further clarification from the Department of Labor will be issued in advance of the April 1 effective date. It is important to note that during the first 30 days, the DOL has already issued guidance that the focus will be on assisting employers with seeking to comply with the law and that there will be limited enforcement of the law.

Be sure to check cda.org/covid19 for the latest information on CDA's response to the COVID-19 pandemic and follow us on social media to share these messages with your colleagues.