Tag: COVID-19

Economic Relief for Businesses Impacted by Coronavirus (COVID-19)

In response to the Coronavirus (COVID-19) outbreak, the federal government and many states have developed paths towards economic relief for small businesses. Below is a summary of such programs at the federal level and in New York, Connecticut, and New Jersey.

I. Federal – U.S. Small Business Administration (the “SBA”)

In response to the Coronavirus (COVID-19) outbreak, the SBA has made Economic Injury Disaster Loans (“EID Loans”) available for qualifying businesses that have suffered economic injury as a result of the epidemic.  Below is a summary of the SBA’s eligibility requirements, application procedures, and general loan terms for the EID Loans.

SBA EID Loan Eligibility

In order to be eligible for an EID Loan a business must first be located in a geographic area that is a declared disaster area recognized by the SBA.  Recognized Declared Disaster Areas are listed on the SBA’s website. As of March 17, 2020, the following areas are approved for disaster loan assistance due to the Coronavirus (COVID-19): California, Connecticut, Idaho,  Maine, Massachusetts, New Hampshire, New York, Oregon, Rhode Island, and Washington. The entire State of Connecticut was declared a federal state of disaster due to the Coronavirus outbreak effective as of January 31, 2020. Many other states are currently in the process of submitting requests to the SBA for an economic injury disaster declaration as a result of the virus and should be eligible for EID loans in the coming days and weeks.

The SBA further requires that a business qualify as a small business to be eligible for an EID Loan. The definition of a “small business” varies by industry but generally is based on the number of employees a business has or the amount of revenue a business generates annually. The SBA has an interactive website to help companies determine whether or not they qualify as a “small business” under the SBA’s regulations. Generally, a full-service restaurant qualifies as a “small business” so long as it has less than $8,000,000 in annual revenue. Private and nonprofit organizations may also qualify for EID Loans.

Finally, a business must demonstrate that it has suffered “substantial economic injury” as a direct result of the disaster, in this case the Coronavirus outbreak, in order to qualify for an EID Loan. For the SBA’s purposes a “substantial economic injury” generally means a decrease in income from operations or working capital with the result that the business is unable to meet its obligations and pay ordinary and necessary operating expenses in the normal course of business.

Ultimately, an applicant’s eligibility for an EID Loan will be determined by the SBA based on the applicant’s type of business, available financial resources, and its demonstration of substantial economic injury.

EID Loan Application Process

An EID Loan, and all other SBA disaster assistance loans, can be applied for by an (1) online application or (2) by a paper form, using SBA Form 5. The SBA has suggested that online applications will be processed more quickly than applications submitted on a physical form.

In addition to the EID Loan application form, an applicant must submit the following documentation to the SBA –

  1. Tax Information Authorization (IRS Form 4506T), completed and signed by each principal owning 20% or more of applicant business, general partner, general manager or owner who has 50% ownership interest in affiliate business. (Affiliates include, but are not limited to business parents, subsidiaries, and/or other businesses with common ownership or management with applicant business.)
  2. Complete copies, including all schedules, of the most recent Federal income tax returns for the applicant business; if unavailable a written explanation must be submitted in lieu
  3. Personal Financial Statement (SBA Form 413) completed, signed, and dated by the applicant and each principal, general partner or managing member.
  4. Schedule of Liabilities listing all fixed debts (SBA Form 2202)

Following the submission of a complete loan application, the SBA will conduct a credit check of the applicant and verify the business’ financial information. The SBA may request additional financial information including tax returns for principals, general partners and managing members of the business, as well as a current profit-and-loss statements, and balance sheets for the business. The SBA’s stated goal is to review an application and decide on a business’ eligibility for the EID loan program within 2-3 weeks. Given the anticipated high volume of applications to this program as a result of the Coronavirus, it is likely that the application and review process will take longer. Once an application is fully accepted and approved, the applicant will need to sign the applicable EID Loan documents and return them to the SBA. The applicant can expect to receive a disbursement of the EID Loan funds within one week from the SBA’s receipt of the fully executed loan documents.

The EID loan amount awarded by the SBA will be based off an applicant’s actual economic injury and the business’ financial needs, as determined by the SBA. The SBA will factor in the availability of other potential sources of financial contribution and business interruption insurance when determining an EID loan amount to be awarded to a small business.

EID Loan Use and General Terms

The funds from an EID loan may be used by the small business to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The terms of an EID Loan shall be determined by the SBA on a case-by-case basis, based upon each applicant’s needs and ability to repay. Generally, the maximum amount of an EID loan for the Coronavirus disaster is $2 million with an interest rate of 3.75% for small businesses or 2.75% for non-profits. The maximum repayment term of an EID loan is 30 years. There are no pre-payment penalties imposed by the SBA on an EID loan.

Alternatives to EID Loans

Small businesses that do not qualify for EID loans or have alternative needs may still be eligible for financial assistance from one of the SBA’s alternative loan programs.

The SBA has an 7(a) Loan Guarantee Program involves loans for small businesses in an amount up to $5,000,000 made by private lenders that are guaranteed by the SBA (“SBA 7(a) Loan”). An SBA 7(a) Loan is made directly by a private lender, who also handles the application and loan process, but is subject to the SBA’s terms and guidelines. To encourage private lenders to make these loans, the SBA guarantees a certain percentage of the SBA 7(a) Loan amount.  Small businesses looking for an acceptable lender for a SBA 7(a) Loan can use the SBA’s lender matching tool or contact their local SBA office for recommendations. The local Connecticut SBA office can be reached at 860-240-4700. The general timeline for the approval of an SBA 7(a) Loan application is 5 to 10 business days.

In order for a business to qualify for a SBA 7(a) Loan, it must qualify as a “small business” under the SBA’s regulations, operate for profit, be engaged in, or propose to do business in, the U.S., have reasonable owner equity and resources to invest in business, and be for a sound business purposes. The acceptable use of the 7(a) Loan funds is generally less restrictive than that of the EID loans and permissible uses include use for working capital, expansion or renovations, new construction, the purchase of land or buildings, the purchase of equipment or fixtures, lease-hold improvements, the refinancing of existing debt for compelling reasons,  seasonal line of credit, inventory, or starting a business. The proceeds from an SBA 7(a) Loan may not be used for the reimbursement of an owner for previous personal investments toward the business, the repayment of any delinquent withholding taxes, or anything not deemed a “sound business purpose” as determined by the SBA. Interest rates for SBA 7(a) Loans are determined by the private lender and generally based off the prime rate or LIBOR rate at the time of the loan but are subject to interest rate caps set by the SBA.

For businesses that need loan funds in a shorter period of time, the SBA offers a SBAExpress loan program which provides term loans and line of credits in amounts up to $350,000. The approval process for an SBAExpress loan is generally completed within 36 hours of receipt of an application.  A SBAExpress loan must also be obtained through a private lender and may be used for the same general purposes as an SBA 7(a) Loan.

II. New Federal Legislation

Emergency Family and Medical Leave Expansion Act and Emergency Paid Sick Leave Act

On March 18, the United States Senate approved a relief package to provide sick leave, unemployment benefits, free coronavirus testing, and food and medical aid to people impacted by the pandemic. The legislation was passed by the House on March 14, and was signed by President Trump on the evening of March 18. The legislation contains provisions that require immediate review and action for employers with fewer than 500 employees.

Both the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act will take effect 15 days after enactment, i.e. April 2, 2020. These provisions expire on December 31, 2020.

Covered employers (i.e., private employers with fewer than 500 employees) will be provided payroll tax credits to cover the wages and health care contributions paid to employees under the sick leave and family medical leave programs, up to the specified caps.

III. New York

New York State is currently assessing options to mitigate hardships to NYS businesses. As of March 19, 2020, the following orders and programs have been established in New York State in response to the COVID-19 outbreak:

Work From Home

On March 18, Governor Cuomo announced he will issue an executive order directing non-essential businesses to implement work-from-home policies effective Friday, March 20, to help reduce density as a social responsibility to protect their workforce. He also announced that businesses that rely on in-office personnel must decrease their in-office workforce by 50%. Exceptions will be made for essential service industries, including shipping, warehousing, grocery and food production, pharmacies, healthcare providers, utilities, media, banks and related financial institutions and other businesses that are essential to the supply chain.

Paid Sick Leave

On March 18, Governor Cuomo signed legislation to provide the following:

  • Employers with 10 or fewer employees and a net income less than $1 million will provide job protection for the duration of the quarantine order and guarantee their workers access to Paid Family Leave and disability benefits (short-term disability) for the period of quarantine including wage replacement for their salaries up to $150,000.
  • Employers with 11-99 employees and employers with 10 or fewer employees and a net income greater than $1 million will provide at least 5 days of paid sick leave, job protection for the duration of the quarantine order, and guarantee their workers access to Paid Family Leave and disability benefits (short-term disability) for the period of quarantine including wage replacement for their salaries up to $150,000.
  • Employers with 100 or more employees, as well as all public employers (regardless of number of employees), will provide at least 14 days of paid sick leave and guarantee job protection for the duration of the quarantine order.

Shared Work Program

The New York State Department of Labor (NYSDOL) Shared Work Program allows businesses to manage business cycles and seasonal adjustments while retaining trained staff and avoiding layoffs. Employees can receive partial Unemployment Insurance benefits while working reduced hours. Full-time, part-time and seasonal employees are eligible.

IV. Connecticut

Connecticut has provided a number of resources, in addition to the SBA, for Connecticut businesses including the following:

DECD’s COVID-19 Business Emergency Response Unit

The Connecticut Department of Economic and Community Development has created a COVID-19 Business Emergency Response Unit dedicated to assisting businesses navigate resources and develop new resources. A dedicated phone line is has been set up at 860-500-2333 to provide assistance to Connecticut’s small businesses for this purpose.

Unemployment Assistance

Workers directly impacted by the coronavirus pandemic no longer must be actively searching for work to qualify for unemployment assistance. And employers who are furloughing workers can use the Department of Labor’s shared work program, which allows businesses to reduce working hours and have those wages supplemented with unemployment insurance. Further information can be found here.

Tax Filing Extensions

The Department of Revenue Services has extended deadlines for filing and payments associated with certain state business tax returns. Effective immediately, the filing deadlines for certain annual tax returns due on or after March 15, 2020, and before June 1, 2020, are extended by at least 30 days. In addition, the payments associated with these returns are also extended to the corresponding due date in June.

The impacted returns and the associated filing dates and payment deadlines are set forth below:

  • 2019 Form CT-1065/CT-1120 SI Connecticut Pass-Though Entity Tax Return: Filing date extended to April 15, 2020; payment deadline extended to June 15, 2020
  • 2019 Form CT-990T Connecticut Unrelated Business Income Tax Return: Filing date extended to June 15, 2020; payment deadline extended to June 15, 2020
  • 2019 Form CT-1120 and CT-1120CU Connecticut Corporation Business Return: Filing date extended to June 15, 2020; payment deadline extended to June 15, 2020

Business Interruption Insurance

A business interruption insurance policy should list or describe the types of events it covers. Events that are not described in the policy are typically not covered. It is important to review the policy exclusions, coverage limits, and applicable deductibles with your agent, broker or insurer. The Connecticut Insurance Department has an FAQ that provides more information.

V. New Jersey

New Jersey has not yet released any official assistance programs for businesses impacted by COVID-19. Several State agencies are currently engaging with local business leaders, local financial institutions, and business advocacy groups to better understand what supports would be most impactful to ensure business and employment continuity. While businesses await direction, the New Jersey Economic Development Authority (NJEDA) has a portfolio of loan, financing, and technical assistance programs available to support small and medium-sized businesses.

© 1998-2020 Wiggin and Dana LLP

NJDOBI Mandates Insurance Carriers to Reimburse Providers for Telemedicine and Telehealth Encounters During State of Emergency and Public Health Emergency

NJDOBI issued Bulletin 20-07 to mandate insurance carriers to reimburse providers for telemedicine and telehealth encounters.  This applies to: (1) all health insurance companies; all HMOs; all health service corporations and any other entity issuing health benefits plans in New Jersey.

The mandate requires the insurance carriers to do the following:

  1. Review their telemedicine and telehealth networks for adequacy and grant any requested in-plan exception for individuals to access out of health telehealth providers if network providers are unavailable.
  2. Encourage their network providers to utilize telemedicine or telehealth services wherever possible and clinically appropriate in order to minimize exposure of provider staff and other patients to those who may have the COVID-19 virus
  3. Update their policies to include reimbursement for telehealth services that are provided by a provider in any manner that is practicable, including, if appropriate, and clinically appropriate, by telephone.   The Bulletin suggests that this be done on the carrier’s website.  This would include instruction on the use of telephone-only communications to establish a physician-patient relationship and the expanded use of telehealth for the diagnosis, treatment, ordering of tests, and prescribing for all conditions. Carriers are required to update telehealth policies to include telephone only services within the definition of telehealth.
  4. Reimburse providers that deliver covered services to members via telemedicine or telehealth. Carriers may establish requirements for such telemedicine and/or telehealth services, and guidance issued by the Department, including documentation and recordkeeping, but such requirements may not be more restrictive than those for in-person services. Carriers are not permitted to impose any specific requirements on the technologies used to deliver telemedicine and/or telehealth services (including any limitations on audio-only or live video technologies) during the state of emergency and public health emergency declared pursuant to EO 103.
  5. Ensure that the rates of payment to in-network providers for services delivered via telemedicine or telehealth are not lower than the rates of payment established by the carrier for services delivered via traditional (i.e., in-person) methods, and carriers must notify providers of any instructions that are necessary to facilitate billing for such telehealth services.
  6. May not impose any restriction on the reimbursement for telehealth or telemedicine that requires that the provider who is delivering the services be licensed in a particular state, so long as the provider is in compliance with P.L. 2020, c.3 and c.4 and this guidance.
  7. May not impose prior authorization requirements on medically-necessary treatment that is delivered via telemedicine or telehealth.

See the entire text of Bulletin 20-07.

© 2020 Giordano, Halleran & Ciesla, P.C. All Rights Reserved

TTB and FDA Relax Restrictions on the Production of Hand Sanitizers by Alcohol Manufacturers

With the increasing pace of the spread of the Coronavirus (COVID-19) and the related emergent need to increase the available supply for hand sanitizer products across the United States, the Alcohol and Tobacco Tax and Trade Bureau (TTB), followed by the Federal Drug Administration (FDA), have relaxed requirements for certain alcohol producers to produce these products without first amending their existing permits or obtaining prior formula approval.

On March 18, 2020, TTB came forward advising industry members that it has found it necessary and desirable to waive provisions of the internal revenue law to provide certain exemptions and authorizations for distilled spirits permittees to produce ethanol-based hand sanitizers to address the demand for such products during this time of national emergency. More specifically, TTB’s guidance provides:

  1. The exemptions are in effect through June 30, 2020.

  2. Alcohol fuel plants (AFPs) and beverage distilled spirits plants (DSPs) are exempted from the need to obtain additional permits or bonds to manufacture hand sanitizer or to supply ethanol to other TTB-authorized permit holders.

  3. All TTB-permitted DSPs are authorized to manufacture hand sanitizer without prior formula approval if the formula is consistent with the World Health Organization (WHO) guidance.

  4. Industrial alcohol user permittees may also use denatured ethanol to manufacture hand sanitizer consistent with the WHO guidance, and these permit holders are further exempted from the need to request approval to increase the quantities of ethanol they may procure.

  5. Hand sanitizers made with denatured alcohol are not subject to federal excise tax, but federal excise taxes will apply to hand sanitizer made with undenatured alcohol.

On March 20, 2020, the FDA—which also has jurisdiction over the production of hand sanitizing products—issued revised guidance that specifies that the FDA does not intend to take action against firms that prepare alcohol-based hand sanitizers for consumer use and for use as healthcare personnel hand rubs for the duration of the public health emergency declared by the Secretary of Health and Human Services on January 31, 2020. More importantly, to be compliant with FDA’s guidance, the alcohol at issued must be denatured (not undenatured) and the packaging must be consistent with FDA’s Labeling for Ethyl Alcohol Formulation Consumer Use found at Appendix A to the guidance.

Finally, for those alcohol manufacturers (or others) that are not currently licensed DSPs or related permit holders, TTB is also expediting its processing and approval of these applications (in some instances within days) to allow for greater production and access to these vital products in our time of national need.

© 2020 McDermott Will & Emery

Three Real Estate Contract Questions to Consider Now

Whether you hold an interest in an industrial, commercial, retail, residential asset class; whether you are an owner, buyer, seller, landlord and/or tenant, lender or borrower, property manager, or homeowner; and whether your real estate is business or personal, there is a need to address COVID-19’s immediate impact on real estate agreements.

Generally, real estate agreements reflect the business climate and risk assessments at the time the contracts were made. In negotiating, executing, and performing their contracts, parties relied on their relationships with the parties on the other side of the transaction. However, when an unforeseeable or disruptive event occurs, parties must look back at their agreements and reassess their standing, rights, remedies, recourse, and relationships.

Now is the time to check on provisions of your real estate contracts. Below are three common questions you may be asking:

1. Which provisions of a real estate purchase and sale contract, lease, or loan document might offer protections or provide guidance at this time?

The following is a sample list of applicable contract provisions:

  • Force Majeure/Acts of God – Force majeure and other provisions in real estate documents that address the parties’ rights and obligations if events occur beyond their control. Some may cover national emergencies and governmental orders.

  • Defaults – Define which actions or inactions will result in a default under the relevant document and whether the defaulting party has any right to notice and an opportunity to cure.

  • Taking – What happens when all or some material right to utilize your real estate asset has been taken away or restricted in a way that diminishes the property value or prevents you from utilizing it for your intended purposes.

  • Access – Property owners will often have certain rights to enter and inspect leased premises and may have the right to restrict access. Purchasers and sellers of a property may have ongoing rights or obligations to allow access to properties to complete due diligence. These provisions may or may not address how circumstances may change in exigent circumstances.

  • Covenant of Quiet Enjoyment – The covenant of quiet enjoyment provides tenants with the assurance they will be able to peaceably use and enjoy their leased premises. These provisions may or may not specifically address a situation where a landlord voluntarily or involuntarily restricts access to the property.

  • Maintenance – Leases allocate maintenance and repair obligations, including but not limited to cleaning. Purchase and sale contracts may contain obligations of various parties on how the owner or operator must maintain the property through closing. These provisions may or may not address who pays or the additional costs of implementation of precautionary measures.

  • Payment Obligations – Payment and closing obligations are often excluded from a force majeure clause with specific clauses that provide that time is of the essence or require payment, despite any other provision that would excuse it.

  • Notice and Cure Periods – Leases, purchase contracts, and loan documents are often very specific about the required protocols for tendering notices, which then trigger specific cure periods. Failure to give or receive proper notice might impact deadlines for cure or performance and termination rights. Cure periods may be extended as a result of the inability to perform or governmental mandates.

  • Environmental – Environmental clauses in contracts may provide additional options.

  • Remedies – Real estate agreements often provide stringent remedies for nonperformance and default. Available remedies should be analyzed in the context of the overall climate in the courts and marketplace. Different parties may be able to avail themselves of certain defenses. Essential businesses may be entitled to certain protections at law and equity. Remedy rights may be expanded or contracted temporarily by governmental entities at the municipal, state, and federal level.

  • Duty to Notify – Parties may have an express or implied duty to notify other occupants of employees, agents, and/or visitors who have been diagnosed or are experiencing symptoms of the virus and were present at the property.

  • Performance, Contingency, and Delivery Periods – Contracts related to real estate may have performance, contingency, or delivery periods. Those dates (often expressed as a number of “days” or “business days”) should be carefully reviewed to determine whether voluntary or mandatory building closures affect the number of “days” or “business days” allowed for performance. Governmental mandates might offer tolling or temporary waivers of obligations.

  • Operating Covenants – Sellers of businesses and real estate or tenants may have obligations to keep operations going or risk default. Check contracts for provisions which require “continuous operation.” Parties may or may not have the right to close buildings, cease services, or implement security or screening measures. Some contracts may require notices of material change to representations and warranties, valuations or business operations.

  • Abatement/Self Help – Agreements may provide abatement rights or self-help rights for missed delivery dates or failed obligations on the part of the other party. It is possible that governmental actions, force majeure, and common law doctrines might already or soon will provide protections or require reasonable extensions.

  • General Deadlines for Performance and Termination/Extension Rights – Carefully watch dates and deadlines in contracts. Extension and termination rights are often narrowly construed, especially where there is a “time of the essence clause.” Some deadlines may allow for tolling in the event of a force majeure, but others may not.

2. What else should purchase and sale, lease, or loan parties consider as we all move forward from this point?

The following are some additional considerations:

  • Reliance on Third Party Providers – Not all third party providers whose services are necessary to perform obligations under a transaction will be classified as essential workers. Governmental orders may prohibit or allow such parties to provide services or restrict the providers to provide services remotely. Check the applicable and evolving ordinances and contact the providers directly to determine if services are available remotely. Assess how deadlines (including, but not limited to, filing deadlines, IRS Section 1031 deadlines, due diligence deadlines for inspections, title, and survey) may be impacted.

  • Electronic Signatures and Notarization – Some states have adopted legislation related to electronic signing and notarization procedures. Not all jurisdictions and providers have equivalent technology available at this time.

  • Recording Office Delays – Buyers, sellers, lenders, and borrowers are reminded that there will likely be delays in conducting recordings. Local recording offices may not be open for business or may experience a backlog. Electronic recording is available in some, but not all, jurisdictions.

  • Closings – Check with the title company on whether electronic signatures, electronic notarization, insurance over the gap period between closing, and electronic recordings are available during periods where there might be restrictions on face-to-face closings. There are fluid situations where maintaining a physical office may not be permitted. For example, the governors of California, Pennsylvania, New York, and Illinois have issued “stay at home” orders for residents in those states and restrictions on businesses. Discuss contingency plans if title companies and lenders are not able to fund on time. Essential service providers will be stressed, and electronic transfers of funds can be delayed.

  • Insurance Coverages – Do the parties have coverages for economic losses, including business interruption/business income and loss of rents? Are there any issues that are covered by commercial general liability insurance? Most standard form insurance policies will not provide business interruption/business income insurance coverage for forced/voluntary shuts down caused by pandemics, but the parties should carefully review all of their insurance policies with their risk management teams to see whether the relevant policies are non-standard forms that do include such coverage.

  • Evolving Federal, State, Municipal laws, Ordinances, and Doctrines – New laws and ordinances will result from the most immediate public needs and will continue to evolve as contract provisions are interpreted differently by different parties whose interests differ. Our Coronavirus Task Force has analyzed several legislative updates including this one on the Families First Coronavirus Response Act.

3. From a practical perspective, where should I start?

Discuss your specific situation with your attorney. Apply good business judgment. Everyone is suffering through this together. It is important to understand the applicable contract documents and assess your relationship with your transaction parties. Courts and Congress may end up taking unusual positions and taking protective steps in the coming months to avoid recession, flatten the curve, and share the loss in ways that today’s contracts might not have contemplated.

© 2020 Schiff Hardin LLP

What Employers Need to Know About HIPAA

As the COVID-19 pandemic continues to affect everyday business operations across the country, employers are confronting a variety of issues on how to handle these disruptions. The intent of this Legal Update is to educate employers about under what circumstances they are permitted to disclose information related to an employee’s or patient’s positive test for COVID-19 under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the Americans with Disabilities Act (“ADA”).

It may be difficult in some circumstances to discern whether health information was received by an employer through its ordinary status as an employer or through its status as a self-insured health plan. Employers should take care in making this determination based on the facts and circumstances of each situation and seek legal counsel as needed.

Covered Entities under HIPAA

  • HIPAA defines “Covered Entities” to generally include health care providers, health plans, and health care clearinghouses.

  • Covered Entities may not disclose protected health information (“PHI”) unless permitted by HIPAA. An individual’s health status related to testing positive for COVID-19 is considered PHI.

  • One permitted disclosure under HIPAA is that Covered Entities may disclose PHI to public health authorities to the extent relevant to the authority and purview of public health authorities. This includes disclosing positive test results for COVID-19 to state and local health departments, HHS, or the CDC as appropriate.

  • Covered Entities may not disclose PHI to the media.

  • Unless an employer is otherwise a Covered Entity as described above, it is not subject to HIPAA’s restrictions on disclosures of PHI.

Confidentiality under the ADA

  • The ADA requires employers that obtain medical information through inquiry or examination to maintain it in a confidential medical file and keep it separate from the employee’s personnel file.

  • Employers have been encouraged by the CDC and EEOC to question their employees regarding travel, exposure, or symptoms related to COVID-19. Any medical information disclosed as part of this dialogue should be treated as confidential.

  • If a positive case is identified in the workplace, the employer is encouraged to investigate the exposure of others in the workplace without disclosing the name of the individual or any personally identifiable information about the person.

  • The confidentiality requirements under the ADA do not prohibit disclosure to state, local, or federal health departments.

Employers with a Self-Insured Health Plan

  • Notwithstanding the discussion above regarding employers, a self-insured employee health plan maintained by an employer is a Covered Entity under HIPAA (i.e. the plan itself, not the employer, although we acknowledge this distinction is difficult to make for most employers). As a result:

    • If the employer obtained the information through its status as a plan (i.e., as the payer for the employee’s health care services), then such information is PHI and subject to HIPAA (see first bullet above for Covered Entities).

    • If the employer receives the information in the ordinary course (e.g. voluntary disclosure by the affected employee), then the second bullet above regarding employer permitted disclosures is applicable.

©2020 von Briesen & Roper, s.c

CMS/HHS Issues FAQs on Essential Health Benefits and COVID-19

As the President issues a state of emergency in response to the Coronavirus (COVID-19) outbreak, the Centers for Medicare & Medicaid Services, U.S. Department of Health and Human Services, issued frequently asked questions (FAQs) on COVID – 19 and essential health benefits (EHB) coverage through the individual and small group insurance markets.

These FAQs state first that EHB generally include coverage for the diagnosis and treatment of COVID-19. However, the exact coverage details and cost-sharing will depend upon the individual’s plan, and some plans may require preauthorization before these services are covered. Under current regulations, each state and the District of Columbia generally determines the EHB that plans in their locality must cover. Moreover, many states are encouraging, and some are requiring, insurance carriers to cover a variety of COVID-19 services, including testing and treatment, without cost-sharing or preauthorization.

The FAQs went on to say that medically necessary isolation and quarantine required by and under the supervision of a medical provider during hospital admission is generally covered as EHB. However, quarantine outside of a hospital setting, such as a home, is not a medical benefit, nor is it required as EHB.

Finally, the FAQs addressed the possibility of a future COVID-19 vaccine. Although not yet available, all vaccines are analyzed by the Advisory Committee on Immunization Practice of the Centers for Disease Control and Prevention, who will recommend whether the vaccine should be included as EHB without cost sharing and before any applicable deductible. Current guidance indicates that the process of evaluation and final implementation as an EHB can take over a year, but plans may voluntarily choose to cover a vaccine before that time. The FAQs also note that participants may use the plan’s drug exemptions process to request the vaccine be covered.

© 2007-2020 Hill Ward Henderson, All Rights Reserved

Can the Government Really Shut Down My Business and Make Me Stay Home? Questions Answered Relating to Declarations of Emergency Due to Coronavirus

As companies face shutdowns and citizens are encouraged to stay home due to the coronavirus (COVID-19), businesses and people may be asking questions, such as can the government really do that? Those who followed China’s response to the outbreak—which involved using martial law to keep millions of citizens in their home—would have seen references in those stories western democracies being unable to use such extreme measures. Yet, it may now seem to some that our own democratic leaders are doing just that (and should be). Can they?

The short answer is yes, they can.

But fear not, because you are not likely to see tanks rolling down the streets enforcing martial law. There remain strong protections for citizens, even in times like these, preventing arbitrary government action. Unlike the famous Dunder Mifflin manager Michael Scott “declaring” bankruptcy in a building parking lot, when Governor Murphy declared a state of emergency in New Jersey he did not simply open the window of his office, shout “this is an emergency!” and then start issuing a list of edicts. His authority, and that of any executive, is restricted by the laws authorizing such a declaration.

A brief review from civics class:

To prevent abuse, the power to make laws, enforce laws, and interpret laws are separated into three branches, i.e., the legislative, executive, and judicial branches. That means the governor cannot simply do what he wants (like a king or dictator), even if he feels those actions are best for the people. He must do only those things which comply with the laws enacted by the legislature (as interpreted by judges). So upon declaring a state of emergency, Governor Murphy—and any other executive declaring an emergency—issued a series of executive orders invoking specific New Jersey legislative enactments. Those statutes pre-authorized the executive branch (which the Governor heads) to take certain, specific actions when the state is facing an emergency.

Most declarations of emergency in recent memory pertain to snowstorms or hurricanes. In those instances, the State invoked more familiar provisions of the statutes governing declarations of emergency, including freeing up money earmarked for emergency use; calling on the national guard to help with the effects of the storm; and allowing the police to redirect traffic. But the Governor’s statutory powers during an emergency are broad, flexible, and include the ability to “make such orders. . . as may be necessary adequately to meet the various problems presented by any emergency,” including “[t]he designation of vehicles and persons permitted to move during. . . emergency,” “[t]he conduct of the civilian population during the threat of and imminence of danger or any emergency,” and “[o]n any matter that may be necessary to protect the health, safety and welfare of the people. . . .”  N.J. S.A. App. A:9-45.  Violations of these orders are considered a disorderly person offense and may be punished by up to 6 months imprisonment, a $1,000 fine, or both.

In response to coronavirus questions:

Governor Murphy also invoked a provision of New Jersey law not implicated by other types of natural disaster called the “Emergency Health Powers Act,” which provided additional authorization for control over medical facilities, the distributions of medical resources, and authority to “identify areas that are or may be dangerous to the public health” and cause “movement of persons within that area to be restricted, if such action is reasonable and necessary to respond to the public health emergency.” N.J.S.A. § 26:13-9. The same law allows the State to “[r]equire the vaccination of persons as protection against infectious disease;” and although the vaccine cannot be “administered without obtaining the informed consent of the person to be vaccinated,” the state may require quarantine for “persons who are unable or unwilling to undergo vaccination. . . .” N.J.S.A. § 26:13-14. And the same law states that no public entity or its agents are “liable for an injury caused by any act or omission in connection with a public health emergency, or preparatory activities. . . .” N.J.S.A. § 26:13-19

So, can the government shut down your business and make you stay home?

Yes. And they can vaccinate you, quarantine you, and are immune from suit for doing any of those things.

There are, however, other avenues and considerations of which businesses and employees should be aware during these times. Many contracts contain force majeure clauses, which businesses should analyze to determine if they apply to coronavirus-related shutdowns, especially those mandated by the Governor’s recent executive order. Others may consider whether they have insurance coverage for a business interruption caused by the government-mandated shutdown. Employees and employers alike should keep abreast of the changing legal landscape surrounding paid sick leave.

©2020 Norris McLaughlin P.A., All Rights Reserved

The Coronavirus: Best Practices to Mitigate Risks in the Workplace

As impact of the Coronavirus Disease 2019 (COVID-19) continues to develop, employers and employees are increasingly concerned about the risk of contamination. Employers should consider practical steps to protect their employees, address employee concerns and maintain productivity during potential business disruptions that may result from the spread of this virus.

  • Education and communication are critical:  Employers should circulate the most recent Center for Disease Control and Prevention (“CDC”) guidance for employers, as well as state and local guidance, such as those provided by New Jersey and New York City. Review for updates from federal, state and local levels as there will be daily developments and updates. Provide significant updates to employees on a regular basis.   We recommend providing these materials via several methods, such as email, postings in breakrooms, on the company intranet, and hard copies inserted with weekly payroll. Ongoing regular communication with employees will create confidence that the business is taking their continued health seriously and help to avoid panic.

  • Encourage sick employees to stay home: When an employee calls in sick, particularly where the symptoms are associated with COVID-19, employers should err on the side of caution and encourage those employees to stay home. New York City and New Jersey both require employers to provide paid sick leave, which includes time off for employees to care for themselves, care for family members, for time off related to school closures and the like, which eligible employees may need to utilize. Employers should consult leave laws and policies that apply to the company. Moreover, employers should not require a healthcare provider’s note for employees who are sick with respiratory illnesses to validate their illness or to return to work. Relaxing such requirements is important given concerns about containing further spread of the virus and the potential inundation of healthcare providers who may have increasing limited resources.

  • Allow for telecommuting/teleconferencing: Employers should not place emphasis on in-person attendance, and should evaluate telecommuting options. This may require employers to temporarily relax current telecommuting policies, or to take steps to set up a method for telecommuting.

  • Review polices regarding travel and off-site events: Employers should review travel and off-site meeting needs and consider making in-person attendance voluntary.  If an employee voluntarily decides to attend off-site events, we recommend that employers require the employee to sign a short assumption of risk and waiver of liability.  If an employee declines to attend given concerns of the virus, employers should not treat such conduct as insubordination and should consider work around arrangements.  Teleconferencing may provide another means for employees to attend off-site functions.  The CDC guidance recommends travelers stay home for 14 days from the time the person leaves an area with widespread, ongoing community spread.  We recommend employers adopt similar policies as applied to employees returning from business or personal travel.

  • Encourage healthy practices:  Encourage employees to engage in healthy practices, such as regularly washing and/or disinfecting their hands. To the extent an employer is able to secure these items, they should  make disinfectants and hand sanitizers available to employees, especially upon entry to the work place.  Employers also should arrange for periodic industrial cleaning and notify employees of those efforts.

  • Identify areas of risk: Identify health risks specific to each work site, and a plan to address concerns.  Review CDC and the Occupational Safety and Health Administration’s guidance providing safety tips and highlighting potential areas of risk.

  • Avoid stereotyping: Employers should not make determinations of risk or treat employees differently based on race or country of origin.

  • Maintain confidentiality: If/when an employee is suspected or has been confirmed to have contracted the virus, employers should act to maintain confidentiality around the employee’s diagnosis. In addition, employers should refrain from asking employees questions about their symptoms and medical conditions or suspected conditions.

  • Train managers: Train managers on how to handle concerns and preventative steps that the company is taking to manage the potential spread of the virus.  Remind them of current policies and any changes that the business has decided to make to accommodate employees and business needs during this time. Encourage managers to promptly address all leave requests and meet with team members regarding concerns to engage in a dialogue to move forward in a way that benefits both the employee and the company. It may be prudent to appoint a single department or point of contact for COVID-19 questions or concerns that managers need to further discuss.

  • Consider other long term considerations such as:
    –  Consider creating a plan that involves how to prepare for a pandemic, including how to deal with office closures to avoid business disruption.  The CDC encourages employers to plan for a possible coronavirus outbreak and advises employers to ensure that their plan is flexible and well communicated to employees.  A formal plan may help the employer to focus on necessary steps to prepare and ensure a single message regarding preparedness is communicated to employees.

    –  Recognize that there may be legal rights associated with an employee who has the virus or who is perceived to have the virus under federal, state and local disability and leave laws.

    –  If employees are represented by a union, consider whether there are any issues that need to be addressed with the employees’ bargaining representative and whether there are any provisions in the company’s collective bargaining agreements that may be affected.

Importantly, employers should keep in mind that the U.S. is early in the process of understanding and combating COVID-19. The situation is rapidly evolving and employers will need to pay close attention to daily developments.  When in doubt, reliance on the guidance provided by health experts, government agencies, and counsel will best insulate employers from exposure to liability for discrimination, privacy or other legal claims from employees.

© Copyright 2020 Sills Cummis & Gross P.C.

For more on the COVID-19 pandemic, please see the National Law Review Coronavirus News page.

National Law Review: Coronavirus Update

The National Law Review continues normal operations
as we are a virtual company.

If you have any questions or need assistance, please contact us at Info@NatLawReview.com or at 708-357-3317 M-F 7-7 and midday weekends and holidays.
Due to the virus and surrounding legal issues our traffic has soared to over 200,000 visitors and over 250,000 page views yesterday alone. We’re on track to have 1,500,000+ visitors in March.
We sincerely hope for your family and co-workers to remain safe – if you’d like resources about how businesses and individuals are navigating the pandemic, we have a dedicated page with over 200 articles written by the nation’s top law firms on the topic.  Groups including SHRM have directly linked to this resource page.
If your company or professional association needs a consolidated, reliable resource that is updated hourly, we encourage linking to our Coronavirus Resource hub.

Copyright ©2020 National Law Forum, LLC

Options for Employers When Employees Cannot Work From Home

Despite many politicians and employers discussing the option for employees to work at home, there are millions of employees who simply cannot do that. Bartenders, restaurant servers, cashiers, and many others have no one to serve and nothing to ring up when they work at home.

Employers of such employees accordingly have a difficult decision to make when business is at an all-time low or they have been shut down. Most cannot afford to pay employees during this time period and hope employees will qualify for unemployment benefits. The question for these employers thus becomes–to fire, or not to fire.

This is where a work furlough comes into play. A work furlough is essentially a temporary layoff that qualifies for unemployment benefits.

Furloughs rose in popularity some years ago when businesses had to cut costs. Most employers knew employees who worked from paycheck to paycheck would suffer a financial hardship if the employees lost their jobs. Employers did not want to terminate employment. These employers wanted to minimize the negative impact, psychologically and monetarily, a termination brings, and the hard feelings an employee may carry following termination. Employers wanted employees who were already-trained to return to work at the end of a furlough, rather than having to start the hiring process from scratch.

Work furloughs generally have a set beginning and end date, similar to the 15-day shut-down ordered in many cities. The employer does not pay the employee during the furlough. Employees, however, generally qualify for unemployment compensation benefits.

Employers who want to maintain better relations should tell their employees to apply for unemployment benefits on the first day of the furlough. This ensures the employees will receive the maximum compensation possible. Even an employee who uses vacation time or personal time may qualify for unemployment benefits.

Usually there is a one week waiting period before an employee is eligible to receive any unemployment benefits. Many states have benevolently waived this one week waiting period for job losses suffered due to the pandemic. In these states, employees will receive benefits beginning “day 1.” The employee will receive compensation during the second week and any later weeks during which the employee is not working.

Any employee who files after the first week of the furlough must use the second furlough week as the waiting period. The employee, therefore, loses a week of unemployment compensation.

Even if the furlough period is only one week in length, employees should file for benefits. This helps the employee if the employer is forced to extend a furlough or put employees on furlough again later that same year. The one-week waiting period only applies to the first week when the employee did not work during the first furlough. The employee does not have to wait yet another week to receive benefits (compensation) during any furloughs that take place within 12 months of the first furlough.

While furloughs are an excellent option for employers to consider, any employer considering termination or a furlough must carefully consider all state and local laws; the state emergency declarations and laws issued, given the pandemic; and federal law, including any relief package or whether the number of employees furloughed triggers obligations under WARN.

© Polsinelli PC, Polsinelli LLP in California

For more on the COVID-19 outbreak, see the National Law Review dedicated Coronavirus News section.