Resources

Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

Paycheck Protection - Designed to Offer Small Business Owners Relief Over the Next Few Weeks

Client Alert
March 30, 2020

The CARES Act is a massive piece of legislation. The emergency loan or Paycheck Protection provisions are one component designed to assist small businesses and keep them afloat during the current crisis. The emergency loans will be made under the United States Small Business Administration (SBA) and are simply an expansion of its already existing 7(a) loan program. The loan process will be administered by the SBA through its local lending partners or approved SBA lenders. Over the next several days it is expected that the actual loan process will be further detailed by the SBA so that loans can be quickly processed.

The Paycheck Protection Provisions within the CARES Act are designed to get cash into the hands of business owners to help them survive the next several weeks. It is the intent of the legislation that the cash be used retain employees. A business receiving the funds that follows the rules laid out in the legislation can have the entire loan forgiven. 

Here are some of the basic components of the Paycheck Protection program:

  • Eligibility
    • Available for any business with 500 employees or less (includes certain nonprofit organizations, sole proprietorships, self-employed individuals or independent contractors)
    • The business must have been in operation on March 1, 2020
    • Had employees for whom the business paid salaries and payroll taxes
  • Amount of loan
    • Maximum loan amount available is the lesser of:
      • $10,000,000, or
      • 2 ½ times the average total monthly payments by the applicant for payroll, mortgage payments, rent payments, and payments on any other debt obligations incurred during the 1-year period before the date on which the loan is made. In the case of an applicant that is seasonal employer, the average total monthly payments for payroll shall be for the period beginning March 1, 2019 and ending June 30, 2019.
    • Permitted uses of loan funds
      • Payroll support, including paid sick, medical, or family leave, and costs related to the continuation of group health care benefits during those periods of leave
      • Employee salaries
      • Mortgage payments or rental payments
      • Utility payments
      • Other debt obligations incurred before March 1, 2020.
    • Payments deferred
      • Deferment of repayment of the loan for up to a year for loans made through June 30, 2020.
    • Loan forgiveness
      • An eligible recipient may have its loan forgiven up to an amount equal to:
        • The total payroll costs incurred from March 1, 2020 through June 30, 2020, and
        • The amount of payments made from March 1, 2020 through June 30, 2020 on debt obligations (mortgage, rent, utilities, etc.) that were incurred prior to March 1, 2020.
      • However, amount forgiven will be reduced:
        • If there was any reduction of the average number of current full-time workers over the period from February 15, 2019 through June 30, 2019.
        • If there was a reduction in excess of 25% of salary and wages in the most recent full quarter versus the prior year’s same period.
      • These reductions in the amount of the loan forgiven can be eliminated if the business rehires employees. Similarly, there will be no reduction if the business makes up any decrease in wages to employees in excess of the 25% threshold before June 30, 2020. These provisions are all designed to encourage businesses to retain employees, pay them the equivalent of their prior salary, and not penalize employers for reducing payroll prior to the CARES Act.
      • To fully take advantage of the loan forgiveness proper documentation will be critical concerning payroll expense, mortgage, rent, utility, and other eligible debt payments made.
      • To the extent any of the loan amount is not forgiven, any remaining balance will have a maximum maturity of 10 years and a maximum interest rate of 4%.

For more information or questions, please contact BMD Business & Corporate Law Member Blake Gerney at brgerney@bmdllc.com or 330.436.8905.

CARES Actpaycheck protectionsmall businesseconomic reliefAttorney Blake R. Gerney
Client Alert

The Future of the Families First Coronavirus Response Act

February 3, 2021Over the last year we all have had to adjust to the new normal ushered in by the coronavirus pandemic. Schools and daycares closed, businesses transitioned from in-office work to work from home, bars and restaurants have closed their doors...all to slow the spread and try to prevent this pandemic from spiraling out of control. The start of the pandemic was utter pandemonium. Working parents trying to balance both caring for their now at-home children and their livelihood. Businesses trying to decide how to implement leave policies with limited information. Employees determining if they could financially afford to take time off. We were all flying by the seat of our pants trying to adjust to our new normal.Client Alert

Ohio Supreme Court Clarifies Medical Statute of Limitations

February 1, 2021The Ohio Supreme Court issued a decision in late December that clarifies and finalizes the Ohio law regarding the period of time in which patients can assert claims for medical malpractice. The Court was examining the interplay between three different statutes being the statute of limitations, the statute of repose, and the savings statute.Client Alert

Ohio Hospitals and Healthcare Clinics: It’s Time to Revisit Your Billing and Collection Practices

February 1, 2021According to a recent Cuyahoga County case, certain healthcare entities may not be protected from liability when engaging in unfair or deceptive billing acts. This decision is consistent with the growing trend across the country to encourage price transparency and eliminate unfair surprise billing practices by health care organizations. Now is the time for hospitals and other health care organizations to revisit their billing and collection policies and procedures to confirm that they are legally defensible and consistent with best practices.Client Alert

HIPAA Business Associate Agreements: Why These Contracts Matter

January 27, 2021No one loves drafting, reading or negotiating HIPAA Business Associate Agreements (BAAs). Yet many of us need to do so, and some of us do so daily. They are often boring, dense and technical, but BAAs are important from both a legal and a business perspective, and they deserve our attention. Failure to enter a BAA when one is required can constitute a HIPAA violation that results in substantial liability, as demonstrated by certain recent Department of Health & Human Services (HHS) settlements.1 A business associate who makes a disclosure that is not authorized by the applicable BAA or required by law can be subject to civil and, in some cases, criminal penalties. Further, parties are often presented with BAAs that contain onerous one-sided indemnification and other provisions that can be devasting to an organization in the event of a HIPAA breach. The significance of a BAA is often not fully understood by the parties until something goes wrong (e.g., a HIPAA security incident or breach, an Office of Civil Rights (OCR) audit or a fracture in the relationship between the parties) and, at that point, there is limited opportunity to mitigate legal and business risk. Ideally, attention should be given at the commencement of the business associate relationship, when the parties are able, to thoughtfully addressing regulatory requirements, planning and preparing for potential adverse events and appropriately allocating risk among the parties. As with most healthcare regulatory compliance initiatives, a proactive approach with respect to BAAs is preferable. This article provides a broad overview of certain BAA requirements and some practical negotiating tips for the parties involved.Client Alert

“I’m Out Of Here!” Now What?

January 27, 2021We all know that the healthcare industry is experiencing a wave of integration. This trend has been evident for many years. Fewer physicians are willing to assume the legal, financial and other business risks associated with owning their own practices. More and more physicians, including anesthesiologists, are becoming employed by large physician groups, health systems and national providers. This shift necessarily involves not only entry into new employment arrangements but also the termination of existing relationships. And those terminations are often governed by written employment agreements, state and federal healthcare laws and employer benefit plans and other policies and procedures. Before pursuing their next opportunity, physicians should pause for a moment and first attend to the arrangement that they are leaving. Departing physicians need to understand their legal rights and obligations when leaving their current employment relationships in order to avoid unintended consequences and detrimental missteps along the way. Here are a few words of practical advice for physicians contemplating an exit from their current employment arrangements.
Older posts
Newer posts